Farmers Insurance Cautions Vehicle Owners on Windshield Replacement Scams
National News • August 10, 2004
Driving with a cracked or broken windshield puts both drivers and their passengers at risk.
In fact, insurance companies in some states are required by law to waive the deductible for damaged or ...
Insurance Journal is not responsible for the content of the message below.
Subject: RE: RE: Glass Replacement Fraud
Posted On: August 18, 2004, 11:27 am CDT
Posted By: Bill
Comment:
Mark, yes, I am the VP of Claims for a medium size insurer writing personal lines property and casualty business in ninteen states. I appreciate your candor and the candid questions raised in your posting.
Glass replacement pricing has always been a "hot topic" among our producers. A recent meeting in Wisconsin yielded some rather startling but old information. It boils down to this Mark. If the consumer replaces their windshield without filing an insurance claim, the cost is usually " fair and reasonable" as the consumer is shopping for the best deal on a piece of OEM glass and will go with the most competitive cost because it is "out of pocket". On the other hand, if the consumer files the insurance claim and the glass company sends the bill direct to the insurer it's usually double or triple the cost. You may ask why does this happen. Because the glass company hopes the insurer will "fast track" the claim and simply pay it.
I personally tested this assumption and called a national glass network to replace a windshield in my 1994 Chevrolet pick-up. I was quoted a price of $394.00 for OEM glass to include the installation and urethane kit if I paid at the time of installation. Then I proceed to take my vehicle to the network shop and filed a comprehensive claim with my insurer. I was amazed as the glass company submitted a bill to my insurer for $ 904.32 based on the Mitchell NAGS price without a percentage discount. As expected, my insurer paid the company without questioning the bill. When a single insurer is replacing 33,000 windshields a year it's not worth the expense dollar to examine each and every glass bill for accuracy. The bottom line is "consumer beware". If you're accepting free dinners and deductible waivers to save your dollars then expect your rates to rise accordingly. So who's fault is it? The insurers for not taking a more agressive stance and questioning each bill or the glass company for charging an inflated price to begin with? Perhaps the insurer should call for the glass price and send a check with the insured so the installation is paid for up front at a preferred shop? Would that be steering? You bet! Is it illegal? No. It is my hope the industry reaches a level of standarization that accounts for fair pricing across the board. Then we all win! The customer has a choice and the cost is consistent.
We have no recourse against glass companies that charge inflated pricing as the offer of free dinners and deductible waivers are made equally to all. The customer is the one that suffers when we short pay the bill. And if it goes to small claims we have no duty to defend. The customer pays the difference as the "insurer" is not the customer. So when the consumer is enjoying the free dinners, keep in mind, nothing is free. We all pay for that dinner!
Subject: RE: RE: Glass Replacement Fraud
Glass replacement pricing has always been a "hot topic" among our producers. A recent meeting in Wisconsin yielded some rather startling but old information. It boils down to this Mark. If the consumer replaces their windshield without filing an insurance claim, the cost is usually " fair and reasonable" as the consumer is shopping for the best deal on a piece of OEM glass and will go with the most competitive cost because it is "out of pocket". On the other hand, if the consumer files the insurance claim and the glass company sends the bill direct to the insurer it's usually double or triple the cost. You may ask why does this happen. Because the glass company hopes the insurer will "fast track" the claim and simply pay it.
I personally tested this assumption and called a national glass network to replace a windshield in my 1994 Chevrolet pick-up. I was quoted a price of $394.00 for OEM glass to include the installation and urethane kit if I paid at the time of installation. Then I proceed to take my vehicle to the network shop and filed a comprehensive claim with my insurer. I was amazed as the glass company submitted a bill to my insurer for $ 904.32 based on the Mitchell NAGS price without a percentage discount. As expected, my insurer paid the company without questioning the bill. When a single insurer is replacing 33,000 windshields a year it's not worth the expense dollar to examine each and every glass bill for accuracy. The bottom line is "consumer beware". If you're accepting free dinners and deductible waivers to save your dollars then expect your rates to rise accordingly. So who's fault is it? The insurers for not taking a more agressive stance and questioning each bill or the glass company for charging an inflated price to begin with? Perhaps the insurer should call for the glass price and send a check with the insured so the installation is paid for up front at a preferred shop? Would that be steering? You bet! Is it illegal? No. It is my hope the industry reaches a level of standarization that accounts for fair pricing across the board. Then we all win! The customer has a choice and the cost is consistent.
We have no recourse against glass companies that charge inflated pricing as the offer of free dinners and deductible waivers are made equally to all. The customer is the one that suffers when we short pay the bill. And if it goes to small claims we have no duty to defend. The customer pays the difference as the "insurer" is not the customer. So when the consumer is enjoying the free dinners, keep in mind, nothing is free. We all pay for that dinner!