The National Glass Exchange (NGE) formed an auto glass replacement market that it says will benefit independent glass shops and consumers.
Trinidad, Colo.-based NGE is positioning itself as direct administrator for their program, replacing the third-party administrators (TPAs) that currently service the insurance market glass claims. A network of independently owned, NGE-affiliated glass replacement shops across the country will offer a glass replacement warranty from Road Guardian, and then service those warranty claims without the involvement of the customers' insurance carrier.
"We've created a whole new market for windshield replacement," says Jim Pruce, president and CEO of NGE. "There have traditionally been two markets in the glass replacement industry: cash and insurance. With insurance, there's a huge gap with high-deductible policies, and the consumer still has to pay for their windshield. The Road Guardian warranty fills that gap."
NGE was founded by Pruce and Ken Keller, a 20-year veteran of the auto glass business and owner of Keller Glass in Colorado. Keller formerly operated glass shops in California. Pruce and Keller decided to form NGE last year after receiving input from independent glass shops.
Road Guardian provides windshield coverage for road hazards. It's Web address is www.roadguardiancorp.com.
The NGE program is designed to provide coverage to insured drivers who have a deductible above the cost of a windshield replacement, which is common. Customers would be able to buy a Road Guardian Road Hazard warranty to replace their windshield at no cost through an NGE-affiliated shop. The company would essentially function as a TPA, but without the insurance company affiliation.
Windshield replacement is generally paid for out-of-pocket because the cost of the glass often is less than the deductible. Under the NGE model, customers would purchase a $50 warranty through a participating glass shop (possibly on the recommendation of their insurance agent), and their windshield replacement (for damage caused by road hazards only) wouldn't cost them anything for the duration of the one-year coverage period.
"By purchasing a Road Guardian warranty, the insured is covered for one windshield replacement per year, while possibly saving on their annual comprehensive auto insurance premium by raising their deductible," Pruce says. "You pay $50 for the warranty, and you can push your deductible up to $500 or even $1,000, with the savings more than compensating for the expense of the warranty. Insureds can reduce their annual premium, and even with the cost of the warranty they're still coming out ahead."
According to Pruce, independent shops would receive "fair and reasonable" rates through the program, as opposed to the discounted rates paid by insurance companies. Payment from Road Guardian also would be remitted within five days.
"TPAs have been arbitrarily telling shops what they can get for their jobs, and that may or may not go along with what the shop actually needs to make in order for the job to be profitable," Pruce says.
By eliminating the insurance presence in the transaction, glass installation quality could improve as well, according to Pruce. NGE shops would provide safer installations than discount providers, he said.
"If a customer is out there shopping based on price and going to a shop where they can get the windshield replaced at a lower cost, chances are they might be getting shorted on the installation safety and quality," Pruce says.
To participate in the program, shops will need to fill out an application, pay an annual membership fee (rates have yet to be released), and agree to use a certain percentage of glass and supplies from NGE's manufacturing and distribution partners. Pruce says NGE is currently working on establishing a relationship with a distributor, and hopes to be able to pass discounted rates on to the shops through the program.
Shops could then use the warranty product as a marketing tool for both consumers and local insurance agents. "They can market their safe installations, and the fact that the replacement is at no cost to the customer through the warranty," Pruce says.
NGE shop applications are available at www.nationalglassexchange.com.
