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Windshield Wars

Post Time:Mar 01,2012Classify:Industry NewsView:434


For years, the state’s roughly 300 independently owned auto glass shops — outfits like Ace Glass, Quackt Glass and Dr. Glass — have been fighting a turf war with large glass conglomerates over the insurance-funded windshield repairs.

The Palmetto State is one of a handful in which if your car windshield cracks, your auto insurance company must replace it with no deductible, provided you have comprehensive insurance. The insurance companies use a network of preferred repair shops to do the work, and those shops give discounted rates to the insurance companies for referrals. 

The scenario has caused a battle among smaller glass-repair shops, insurance companies, third-party administrators that own glass businesses and fly-by-night scammer-type operations known as harvesters. 


If you call insurance companies Allstate or Nationwide, for instance, it’s the Ohio-based Safelite Solutions, a third-party administrator, that handles calls for a glass claim. Safelite also operates a national glass-repair business. 

“They’re steering their customers to themselves,” says Fred Price, owner of Ace Glass, a business that’s been installing glass in Columbia since 1939, about companies like Safelite. 

Pending legislation is aimed at stopping that. Last year, the S.C. House passed a bill by a gigantic margin that would ban third-party administrators from owning 10 percent or more of a glass-repair business. The bill is now in the Senate. 

“What this [legislation] does is just kind of levels the playing field; it just stops the steering,” Price says, adding that he’s had close friends standing at his front counter while on the phone with a third-party administrator that was trying to steer him away from Price’s shop. 

“The customer does have a right to who repairs their windshield,” Price says.

With the bill now in the Senate, Safelite is fighting back. Both sides have hired lobbyists and Safelite has been throwing around some serious cash. 

Call it the windshield wars. 

The state Chamber of Commerce has come out against the bill. The South Carolina Business & Industry Political Education Committee has determined the legislation is “business negative,” a deal breaker for many lawmakers whose votes are heavily influenced by the powerful BIPEC PAC. 

Critics of the legislation, like Safelite, say it will raise insurance costs. 

“Oftentimes, consumers rely on their insurance company to refer them to a reputable repair shop, backed by the insurance company,” said Brian DiMasi, Safelite’s senior corporate attorney, in a statement. “Claim costs will rise, warranty claims will rise, and customer complaints will rise.”

Proponents of the bill call that a scare tactic because it’s the insurance companies that set the price. 

This fall, Safelite donated $1,000 each to more than a dozen of the state Senate’s 46 members. It also wrote large checks to both the Senate GOP and Democratic caucuses.  

“We caught them kind of flat-footed last year, so they had all summer to gear up for the Senate,” says State House lobbyist Warren Tompkins, who represents the independent glass shops, about Safelite. “They’re spending money right and left.”

The independent glass shops, too, have given money to lawmakers. 

As the cash flows back and forth and the debate goes on, it has highlighted a seedier side of the business of auto-glass repair. 

Ever been stopped at a car wash, gas station or grocery store parking lot and been hounded by someone who’s noticed your chipped windshield and presses you to sign up for an appointment to fix it? 

They’re known as harvesters and they prowl anywhere parked cars are plenty. Some have even been accused of actually causing the damage. The companies are hard to track, and some motorists have accused them of doing shoddy work. 

In the windshield wars, these harvesters have been lumped in on the side of the independent repair shops that share a lobbyist in Tompkins — to the detriment of their effort to get the legislation passed. 

“Essentially they’re scam artists … shakedown artists,” says Safelite lobbyist Tony Denny about harvesters that he blames for driving up insurance rates. That’s why the industry set up preferred repair shop networks, he says. 

Those operations though, says Tompkins, only exist because companies like Safelite have been squeezing the independent shops to the point where they’ve had to advertise by hiring harvesters. 

Sue Berkowitz, director of the South Carolina Appleseed Legal Justice Center, says some of the lobbyists have come to her and asked if she would get involved because it’s a consumer issue. Her organization advocates for the low-income community. 

“I tell them that my clients don’t even have cars, let alone car insurance,” Berkowitz says.


Source: http://www.glassbytes.comAuthor: shangyi

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