Most insurance companies have repair contracts with body shops in your area.  If you use whomever they suggest, it benefits the insurance company because of negotiated lower labor and repair rates.  Insurance companies will also require their shop to provide a lifetime warranty but there are a lot of shops that do that already.  You just have to ask.

Insurance company claims representatives are given set goals that they need to achieve as far as costs.. They would like to see around 40% of their claims go to the repair shops they have suggested to their policy holders.  If you have chosen your own repair shop, claims representatives will frequently try to sway you away from using the body shop and tell you that the shop is not on the warranty list and it could effect payment of your claim.  They may explain that it will take up to a week before an adjuster will be available to write an estimate on your car which no one is really fond of.  They also may say that there will be no warranty if you don't use someone on their list. In my opinion that is really not cool.  

Any great body repair shops will be confident in their work and offer a lifetime warranty no matter who is paying the bill. Shops are systematically interested in handling your claim and the repairs efficiently. Also, most body shops know how insurance company’s claims are processed, making it easy to complete the estimate process and repairs quickly. So, the answer is No. You don't have to use the body shop that AAA, Geiko, Farmers, State Farm etc. has recommended. The choice is yours by law, in the majority of cases.

Will you still get top notch repairs? Overall, whether it's the insurance company’s recommended shop or your shop of choice, it is important that you choose a repair shop that you feel confident in. Ask friends, family and co-workers for recommendations. You can also research body shop reviews online through websites like Angie’s List. Here are some questions to think about:

• Does the shop have a lifetime warranty?
• Do they have experience working on your type of car?
• How long have they been in business?
• Have they worked with your insurance company before?
• What is the likelihood that the estimate will go up once the repairs have started?

Just so you know, the shop you choose doesn't have to be on your insurance company’s direct repair list.  A reputable body shop will work with any insurance company to restore your vehicle back in tip top shape. 

References: https://www.angieslist.com/articles/do-you-have-use-body-shop-insurance-company-recommends.htm