What is the difference between a direct repair shop (one referred by the insurance company) and a non-referenced shop?

Good question! In fact, House Joint Resolution #542 has requested that the Bureau of Insurance for the state of Virginia to study these "exclusive agreements between insurance companies and repair or replacement facilities."

The direct repair shop agreement exists between the insurance company and an auto body repair facility which establishes a set of "guidelines" for repairing their policyholders' and claimants' vehicles.

An example of one of these "guidelines" is that the auto body repair facility agrees to use aftermarket parts to repair your car.

Bruce's Super Body Shop is not a direct repair facility for any insurance company. Bruce's customer is you, the owner of the car!