Glass Repairs Have Caused Thousands Lawsuits with Insurance Companies in 2017
Aug. 22, 2017—Lawsuits between independent auto glass repair businesses that replace cracked and broken windshields and auto insurers that pay for them have increased dramatically over the past 10 years, according to a Sun Sentinel article.
In the period between Jan. 1 and Aug. 17, just nine suits were filed in 2012 in the newspaper's tri-county region by companies with the words “glass” or “windshield” in their names, according to a state database of lawsuits against insurers. By comparison, 978 were filed during the same period in 2016, and 1,067 were filed during the same period this year.
Insurers are blaming the “assignment of benefits” tool, saying abuses could drive up rates for all drivers.Insurers accuse the auto glass companies of committing fraud, while the auto glass companies say the insurers refuse to pay a fair price for their work.
Just about all windshield-related suits are filed in county courts or small claims courts, where claims amounts are less than $15,000.
Statewide, a quarter of the suits were filed by Auto Glass America, an Arizona-based chain based with locations in the Tampa and Jacksonville areas.
Independent auto glass companies have become more aggressive soliciting business, including setting up shop at car washes and gas stations and persuading customers to sign over insurance benefits on the spot, insurers say.
“Fraudsters often approach consumers in a friendly manner with offers of waiving deductibles, cash rebates, gift cards or even steak dinners,” asserted Logan McFadden, southeast region spokeswoman for the Property Casualty Insurers Association of America, in an email statement. When it comes time for the glass companies to file suit, they often do so without notifying policyholders named in the suits as assignors, she said.
Logan’s organization, Altmaier, and major insurers are urging the state Legislature to adopt laws restricting assignees from collecting one-way attorneys fees, even though a similar effort failed last year.
But Lee Jacobson, an Orlando-based attorney who sued insurers over windshield claims 900 times in 2016 and 546 times so far in 2017, disagrees that assignment of benefits or one-way attorneys fees are driving the trend.
Jacobson blames the nation’s largest auto glass replacement company—Ohio-based Safelite. He says Safelite cornered the market by negotiating high-volume, low-cost windshield replacement rates with the largest auto insurers. In turn, the largest insurers use those low negotiated rates as benchmarks in determining how much they are willing to pay independent auto glass shops, he said.