May/June 2002

Insurance talk  policy briefs

Ohio Casualty Selects LYNX to Manage Auto Glass Claims
Ohio Casualty Insurance Co., a unit of Ohio Casualty Corp. based in Fairfield, Ohio, has announced that it has selected LYNX Services by PPG to manage its auto glass claims program. LYNX will manage glass claims for the company 24 hours a day, seven days a week, and policy holders will be offered auto glass repair and replacement by PPG PROSTARS certified technicians and LYNX Service participants, according to a release issued by both companies.

The insurer’s home office auto claim manager Phil Horst said the move to go with LYNX was determined based on the speed with which it hopes to serve policyholders.

“By contracting with PPG PROSTARS and LYNX, we’re supporting our vision of achieving superior speed and flexibility in servicing our policyholders,” Horst said.

LYNX vice president of sales Chris Umble also joined Horst in announcing this new partnership.

“We’re very pleased that Ohio Casualty Insurance has come aboard with us,” he said. “Together I think we’ve developed a customized, comprehensive solution for Ohio Casualty’s auto glass claims that will help them achieve their business objectives.”

Mileage Based Rates Ahead
Several insurers are considering moving towards a new way of charging for policies-the way of mileage-based rates. Cleveland-base Progressive Insurance Co. has already launched a pilot program using this system in Texas, and say it has proved successful so far. Progressive spokesperson Leslie Kolleda told the Wall Street Journal she expects the system to soon take off for the rest of the insurance industry.

"This is absolutely the future of auto insurance," Kolleda said.

However, other major auto insurers are waiting to join in. Northbrook, Ill.-based Allstate Insurance Co., for example, said it didn't feel that there was enough historical data to support such a move. "[Switching] would require a massive restructuring of a well-functioning underwriting system," said Justin Schmitt, an Allstate spokeperson.

Progressive's pilot program in Texas employed global-positioning systems to measure mileage. However, the systems had to be installed in auto service shops, which many policyholders considered too much of a hassle-despite the savings on their rates.

While the impact on the industry will be small to non-existent as only pilot programs exist, it could grow if more companies make the switch as coverage issues arise.


Mitchell Introduces iNTOTAL.COM
San Diego-based Mitchell International (the parent company of NAGS International) has announced the nationwide availability of iNTOTAL.COM, an Internet-based solution that provides insurers evaluations using 100-percent verified data for settling total loss vehicle claims. Mitchell’s total loss settlement system will give automotive claims managers and adjusters detailed reports based on up-to-date, comparable vehicle data that is 100-percent verified by Mitchell’s staff of data analysts, according to the company.

These reports will enable insurers to present clear, supportable settlement values to policyholders—values that will be easier for today’s informed and Internet-savvy consumers to understand and accept, thus promoting more first-contact settlements. Mitchell says iNTOTAL’s reports uses an open-value calculation method that is straightforward and easy to understand, digital photos of actual comparable vehicles with date of sale and detailed supporting analyses.

“Total loss claims have become some of the most contentious in the industry, often resulting in the loss of policyholders and increasing litigation,” said Steve Yin, Mitchell’s senior vice president of marketing and product management. “iNTOTAL creates settlements that claims adjusters can explain and the vehicle owner can understand and accept because they are based on real, comparable, verified vehicles.”


General Casualty Insurance Names Glass Claims Administrator
General Casualty Insurance of Sun Prairie, Wis., has announced that St. Johns, Mich.-based Quest Software will be handling its auto glass claims management. According to a letter sent by the company to auto glass shops throughout the Midwest on November 1, 2001, it chose Quest “because it is not a glass vendor and has no vested interest in whom is selected for a job.” The company said Quest would recommend shops based on proximity to customers and on their quoted prices, much like Allstate Insurance Co.’s Customized Offers® program. (Please see September/ October 2000 AGRR, page 20, for related story.)


Minnesota Law Changes for Glass Shops Again
Despite several years of work to fight the battle against insurance companies that many auto glass replacement shops face, Minnesota auto glass shops recently suffered a loss. The Minnesota Legislature passed a law, House File 2570, in late-March that requires insurers to pay only automobile glass claim costs that they deem fare and reasonable within the local industry. It also permits insurers to suggest a glass repair vendor, although the insurer must notify the policyholder of his right to choose a shop.

Originally, the bill would have made all referrals legal, but was revised before it was ultimately passed. Gov. Jesse Ventura actually vetoed the bill, but both houses over-rode the veto and passed the bill, much to the dismay of Minnesota auto glass shops.

Mark Anderson of All Glass Minnesota in West St. Paul has worked for several years through his association, the Minnesota Independent Auto Glass Association, to make pricing in Minnesota fair for auto glass shops. (See March/April 2000 AGRR, page 41, for related story).
 

Allstate Sued by Lawyers
In a case that could have implications for the glass industry, Allstate Insurance Co. of Northbrook, Ill., is being sued in a Chicago state court for utilizing the Internet to solicit unrealistic bids from lawyers wanting to represent Allstate policyholders. The suit alleges that cases are being assigned to law firms willing to work for the lowest fixed fee, without regard to the actual amount of work needed to handle an individual’s case properly. As a result, the complaint states, tens of thousands of Allstate’s unsuspecting policyholders in Illinois, who were never told of the new practice, are being denied the legal defense they thought they were buying when they paid their premiums.

The plaintiffs’ lawyer, David Novselsky, is asking the court for more than $25 million in punitive damages.

While Allstate is taking online bids from lawyers only currently, this could have implications for the practice of online bidding for auto glass services through insurance companies, such as its “Best Offer” program.

AGRR