Why strong direct repair programs are key to managing today’s auto claims

Auto repairs aren’t just becoming more expensive – they’re taking longer, too. 

According to Bloomberg, there were an estimated 100,000 open auto repair positions in 2024, with nearly 46% of shop owners saying the current technician shortage has impacted operations. As a result, customers are seeing longer repair times and higher service rates for their vehicles. And with recent tariffs disrupting the supply chain, auto repair costs are only expected to keep rising. 

Auto claim challenges for businesses and insurers

These pressures are creating major challenges for everyone managing auto claims, from insurers handling personal lines to businesses with fleets or self-insured programs. With unpredictable lead times and price volatility, they’re facing longer auto claim life cycles, higher repair and indemnity costs, and more difficulty when scheduling and coordinating repairs.

In a time when every delay and dollar counts, having access to a strong direct repair program (DRP) can provide the control, efficiency and consistency needed to manage auto claims effectively.

How direct repair programs work

A DRP is a formal partnership between an auto repair shop and a business or insurer. When a vehicle is damaged, the business or insurer will recommend a shop within its DRP network to handle the repairs. Each shop in the network is carefully vetted and required to meet specific standards around pricing, technician training, repair methods, part usage and more. 

Benefits of direct repair programs

In today’s strained auto repair environment, a strong DRP brings significant value and stability to businesses, insurers and repair shops alike. Key benefits include:

• Controlled costs: With tariffs driving up material and labor costs, auto repair expenses are becoming harder to manage. DRPs give businesses and insurers greater control over pricing by allowing them to negotiate lower fixed rates with shops in their network. This means more predictable repair costs for businesses and reduced indemnity spend for insurers.

• Faster repair times: The ongoing shortage of repair technicians is creating longer wait times and service delays. With DRPs, businesses and insurers have access to a wide network of repair shops that prioritize their program’s referrals, helping them reduce auto claim life cycles, minimize rental costs and get vehicles back on the road faster. 

• High-quality work: Maintaining consistent, high-quality work on damaged vehicles has become challenging as more skilled repair technicians age out of the workforce. DRPs ensure repairs are only completed by technicians who meet their strict training and service standards. This helps businesses and insurers avoid costly rework and disputes down the line. 

• Healthier repair shops: As tariffs impact the cost of living, some vehicle owners may choose to delay services, meaning fewer customers for auto repair shops. However, when part of a DRP, it’s easier for these shops to maintain a steady stream of business due to consistent program referrals. 

How Sedgwick can help

As auto repairs grow more unpredictable, businesses and insurers must find ways to repair smarter, not harder. Now more than ever, having a partner with a strong DRP is key to managing rising costs, reducing auto claim life cycles and getting vehicles back on the road safely.

At Sedgwick, we have the largest DRP in the U.S. with over 2,800 multi-, regional- and single-shop operators, and we’ve recently expanded our network with more trusted partners. Now more than ever, our clients rely on our DRP to help them get quality auto repairs done efficiently and at the right cost. 

By leveraging contracted labor rates across our network, we ensure cost-effective repairs, delivering an average savings of $323 per estimate. And with our quality control team thoroughly reviewing every DRP assignment, clients rest easy knowing estimates are always 100% accurate and aligned with industry standards. 

From scheduling services to ensuring proper auto repairs, we can handle it all – saving time, controlling costs and reducing the administrative burden for our clients. To learn more about our direct repair program, click here.