Breaking Free from the DRP Stockholm Syndrome

by Matthew Ciaschini, AASP/MA President

Ever catch yourself defending an insurance company that’s paying you peanuts? It’s almost like a weird case of Stockholm syndrome!

You know, that condition where hostages grow fond of their captors. In our case, some auto body shops have grown bizarrely attached to the very insurers who hold their profits hostage. Funny, I guess, but also a little scary, right?

Loving the Ones Who Hurt Us (Just a Little Too Much)

Let’s set the scene: A big insurer waves a program contract at a shop. “Join our network, we’ll send you work,” they promise. The shop eagerly signs on. Fast forward a year, and the shop is working twice as hard for half the pay but still saying, “Thank you sir, may I have another?” Snark aside, it’s a classic case of our industry’s own Stockholm syndrome. Shops start feeling grateful to the insurer?!? The insurer, the very entity that keeps labor rates artificially low and dictates how repairs should be done. They defend the insurer’s bad habits: “Well, at least we’re getting volume,” or “It could be worse; they did send us all these total losses we have to fix, otherwise we lose money letting them sit here for nothing…” Talk about bonding with your captor!

For anyone unfamiliar, Stockholm syndrome is a psychological phenomenon where captives develop positive feelings toward their captors. In other words, hostages start sympathizing with (or even loving) the people tying them up. Sound uncomfortably familiar when you think of certain insurer program relationships? Shops on some insurance programs act like they’re stuck in a hostage situation, but instead of plotting an escape, they’re hanging up the captor’s picture in the break room – or better yet, on the wall outside their shop – while singing their praises.

Insurance Program Deals: The Gilded Cage

Programs can feel like a cushy arrangement at first. You get a steady flow of referrals; the parking lot stays full. It’s like a gilded cage of repair: comfortable but still a cage. Insurers use that comfort to control the rules. They set the “prevailing” labor rate (which hasn’t prevailed anywhere except in their own surveys). Here in Massachusetts, many shops have been stuck at around $45 per hour labor rate with no meaningful raise in 35 years. Meanwhile, everything else (cost of living, tools, tech training, even the price of eggs for your breakfast sandwich) has shot up. The result? An industry with the lowest labor rate in the nation, and it shows. Massachusetts lost over 100 body shops between 2018 and 2020, casualties of this unsustainable model, and the trend continues. 

Yet, some program shops will say, “It’s fine, we’ve adjusted. We make it work.” That’s the Stockholm talking. They’ve been in the program so long, they rationalize the abuse: slashed rates, dictates on repair methods, delays in approvals. They might even snap at anyone who criticizes the insurer, just like a hostage yelling at the SWAT team trying to help. It would be funny if it weren’t so tragic for our profession’s well-being.

When Insurers Play Hardball (And We Play Along)

Consider the latest slap in the face: State Farm, one of the biggest players, maybe the biggest in the nation, has reportedly cut labor rates in various markets recently. Yes, while inflation makes every other cost go up, State Farm decided body labor should go down. (Maybe they think our technicians discovered a way to eat and pay rent on 2019 wages?) A recent industry poll found that slightly more than half of responding shops said State Farm lowered rates in their area. In some regions, shops saw an overnight pay cut for the same work. For example, reports of a drop from $72 to $68 per hour in the Denver area have circulated. And if they’re not outright cutting the dollar rate, they play other games: shaving necessary labor hours, refusing to cover certain procedures or mandating cheaper and cheaper alternatives. It’s the classic insurer strategy: giveth with one hand, taketh with two.

What’s astounding is how many shops on these programs grin and bear it. Imagine any other business owner cheering for a partner who keeps squeezing their margins. It’s like a restaurant applauding a food delivery app that suddenly pays them less per order; it defies common sense. But under the program spell, some of us truly act as if the insurer can do no wrong. We’ve become conditioned to accept that “this is just how it is.” That defeatist mentality is exactly what insurers bank on. They want us docile, dependent and a little bit in love with them (or at least afraid to leave).

Breaking the Bond: How to Cure Our Stockholm Syndrome

Alright, enough is enough. It’s time for a rescue mission, and this one’s an inside job. How do we break free of our industry’s Stockholm syndrome? First, we have to admit there’s a problem. If you find yourself constantly justifying an insurer’s bad behavior or feeling dread at the thought of leaving an insurance program, take a step back. You opened your shop to be an expert repairer and a business owner, not an insurance company’s indentured servant.

Step 1: Remember Your Worth. You fix highly complex machines on wheels, returning families safely to the road. That expertise is worth a fair price. If an insurer’s program forces you to bill out major repairs at 1999 rates, that’s a huge red flag. No, you’re not being “greedy” for wanting to charge what the work is actually worth; you’re being realistic. Quality and safety have a price.

Step 2: Crunch the Numbers. Take a hard look at those jobs. Are you actually making money once you account for all the discounts, lack of total loss revenue and free add-ons insurers expect? Often, by the time you “eat” that last unapproved procedure or accept that “prevailing” rate, the job’s profit margin has vanished. Volume is only valuable if it’s profitable.

Step 3: Plan Your Exit. The relationship is like captivity, so you should start planning your escape. This doesn’t mean you drop every insurer overnight. But it does mean setting new terms. Inform your insurance partners that you simply cannot continue under the current terms. Some shops have successfully negotiated better rates when being out of the insurance contracts that have held them down and were the primary reason for the suppressed labor rates to begin with. 

Step 4: Market Your Independence. Being off a program can actually become a selling point. Let customers know you work for them, not the insurance company. Emphasize that you follow manufacturer repair procedures and won’t cut corners just because an insurer refuses to pay. There are plenty of drivers out there who care deeply that their car is fixed right, and they will seek out shops that put safety and quality first. Insurers don’t own the exclusive rights to steer customers. Your reputation and marketing can steer plenty on your own.

Finally, Step 5: Lean on Your Allies. Organizations like AASP/MA exist to back you up. We’re pushing for fair labor rate legislation, exposing the bad behavior of certain insurers and trying to get a fair and equitable licensing board for appraisers and consumers. There’s strength in numbers, so the more shops that break free and stand together, the harder it is for the Big Insurance captors to bully any one of us. They might control a lot of the money, but we control the wrenches, the paint guns and the know-how. Without us, they have no product to give their policyholders.

From Hostage to Hero

Breaking out of this program Stockholm syndrome won’t be easy. I won’t sugarcoat it. It can feel like you’re risking a lot by saying “no more” to a powerful partner. But consider the risk of not doing it: another decade of stagnant rates, techs leaving the trade because they can make more elsewhere and shops closing doors because they can’t pay the bills. At some point, the fear of change has to give way to the fear of wasting your potential and passion in a lopsided relationship.

It’s time to cut those one-sided emotional ties. No more loving the captor. Let’s remember that we hold the keys. Whether it’s to our shops, to our standards, to our futures or truly all three. Insurers will respect us when we finally show a little self-respect and we all do the right thing by the consumer. So go ahead, break the syndrome and step off that insurance program hamster wheel, charge what you’re worth, and deliver the kind of quality that demands a fair price. In this story, we don’t have to remain the hostages. We can be the heroes who rescued an industry’s self-esteem and profitability. And trust me, freedom and a proper labor rate never felt so good.

Want more? Check out the October 2025 issue of New England Automotive Report!