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September/October 2002

Flatlined!
The industry reacts to
Farmer’s Insurance
new “per-incident” 
pricing program

 

Farmers Insurance, which is based in Los Angeles, has recently made some big changes to its pricing agreements with Columbus, Ohio-based Safelite Glass Corp. Sources say Safelite has offered Farmers a flat fee of approximately $200 “per incident,” or 70 percent off the NAGS list price, whichever is less—for both repairs and replacements. While neither Safelite nor Farmers would confirm or deny the pricing change, most auto glass repair and replacement shops are shocked how it will affect their own business, as follows.

“I haven’t had to deal with it … there’s no way I could do that [work for a flat fee]. If I didn’t have to pay for my windshields I could do it, but I do, so I couldn’t possibly survive working that way.” 
–Don Boccafola, Bi County Windshield Repair, 
Wading River, N.Y.


“What they are doing is giving one set price for everything … they found one number and said ‘okay, we had 200 claims per quarter and 1,000 per year, and divided it and came up with $200, so you’ll win when you do repairs and you’ll lose when you do replacements. Then the customer is going to lose because shops will do so many repairs even when windshields should be replaced, and it will be unsafe.”
–Marcos Darosa, 
Alpha Auto Glass, 
Fort Lauderdale, Fla.


“My question would be ‘why?’ Do you not have time to add up how much it’s going to cost the policyholder? They’re the ones that are going to end up paying. Why would anyone do that? Someone’s going to win and someone’s going to lose. It’s like two country bumpkins went out into a field and made a deal, but this isn’t two country bumpkins—it’s two sophisticated companies doing this.”
–Dave Casey, 
SuperGlass Windshield Repair, 
Orlando, Fla

“The fact that it seems unfair for the policyholder to have to spend 20 minutes on the phone to set up a windshield repair appointment, but we don’t have any choice because they no longer want to talk to the glass company … it makes it difficult for anybody to compete.” 
–Linda Brendel, 
Novus Auto Glass Repair and Replacement, 
St. Louis


“I can’t imagine the idea of an insurance company paying that much for windshield repair. The idea of doing repairs is to save money, but how does this save the insurance company money?” 
–Carol Brown, 
Glass Doctor, 
El Paso, Texas

 

AGRR

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