Each year, approximately 6% of drivers submit claims for comprehensive and collision damage to their vehicles, causing U.S. insurers to incur tens of billions of dollars in automobile physical damage losses. A large portion of these incurred losses is paid to automobile collision repair facilities, often referred to as body shops.

To mitigate the costs of vehicle repair, insurers have created direct repair programs (DRP). While DRPs have existed since the 1970s, the most significant growth came in the 1980s and 1990s. Recent surveys estimate 44% to 50% of body shops participate in a DRP. Among the shops that participate, nearly 57% of sales are referred by insurance companies. In a DRP, carriers identify and contract with body shops that are able to perform high-quality repair work. In exchange for referrals from the insurer, the body shop agrees to warrant repairs and provide consistently measurable standards of service and quality for each repair.

There are several ways DRPs improve consumers' claim experiences and increase the efficiency of handling insurance claims. Repair facilities are screened by insurers before they are included in DRP programs. The insurer may require that the shop meet standards related to equipment, training, service and pricing. Therefore, DRP shops are likely to provide higher quality repairs and better service than a randomly chosen shop. Moreover, when using a DRP-approved repair facility, consumers are likely to receive faster repairs because time spent with claims adjusters and obtaining multiple estimates has been eliminated from the repair process.