Do insurer direct repair programs transfer when a body shop is sold?

For many body shops, insurer referrals are a large source of work. That makes the question of whether those programs continue after a sale one of the first a careful buyer asks. The honest answer is that each program sets its own terms, so no one can say in general. What you can do is ask early and get the answers in writing.

What the programs tend to depend on

Programs and certifications usually look at the shop itself: its trained people, its equipment, its facility and its record on quality. A change of owner can prompt a fresh review. If the certified technicians leave, or the equipment changes, a shop may lose its standing even where the program allowed the sale. Read each agreement for what it says about a change of ownership.

What a seller should ask each insurer

Before you list, contact each insurer and manufacturer program you work with. Ask what notice they need, whether the buyer must apply, what the review involves and how long it takes. Ask whether the status continues during that review. Get the answers in writing, and tell the buyer’s representative early, so a program does not become a surprise in the middle of a deal.

How a buyer tests the referral share

As a buyer, ask for the work split by source for several periods, and how much came through each program. Ask which programs the shop is in, which it has left and why. If one source supplies most of the work, consider talking to that insurer, with the seller’s consent, and ask your lawyer how to reflect the answer in the agreement.

The related guides below cover selling and buying a body shop in more detail.