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September/October 2002

NWRA Update

Changes at FASGLASS 
by Bill Batley

On June 27, Farmers Insurance sent a letter entitled Breaking News to all its agents and district managers. In the letter, the company announced changes to its glass claims reporting procedure. It truly was breaking news, but, sadly, it marked a serious step backward in a glass program that was already marginal at best. The breaking news, as the newsletter describes, was an extension of the Farmers HelpPoint claims service to incorporate the FASGLASS program. This may sound exciting, but what does it really mean?

FASGLASS started with four national auto glass companies and was merely a call router designation on an 800 number. Customers would call the number and one of the four companies would handle the claims through an allocation basis. Now FASGLASS has been reduced to two companies, and based upon my estimation, 9 out of 10 calls are allocated to SGC; the few remaining calls are allocated to Harmon.  To say that HelpPoint has been extended to the FASGLASS program simply means that the insured needs to call through a larger and more confusing phone tree, only to select auto glass claims, which then forwards the call to the FASGLASS router.

One major change has been the withdrawal of LYNX from the FASGLASS program. When LYNX was one of the options, the Farmers program had the potential of becoming an open program. Now that LYNX has pulled out of the program, reducing FASGLASS primarily to SGC, the program is even less likely to ever become a fair and open program. 

Another notable change is that glass shops can no longer call to report a glass claimóonly the insured can make the call. Why is Farmers Insurance opposed to having auto glass companies talk directly with FASGLASS (SGC Network)?  One obvious reason is it takes away the ability of the SGC representative to direct the job to a Safelite shop.

Farmers Insurance seems to have overlooked the fact that my customers choose to come to my shops because they have confidence in the work we do. Most also believe they are insured by a competent, reliable insurance company; otherwise, they wouldnít continue to pay the premiums. Why then must many of these same customers be told one or more of the following responses when they call SGC to open a claim?

ďI canít find that shop in our database, but we donít guarantee its work, and it may overcharge Farmers, and you will have to pay the difference.Ē  Sound ridiculous?  And what is the Farmers insured thinking at this point, particularly when he believes he has been talking directly to a representative of his own insurance company?

It doesnít seem to matter if we are listed as a participating shop with SGC. We are treated the same regardless. Since we get virtually no referrals and we canít call in and get a referral number for prompt payment for our Farmers insured, our customer has to call Safelite (a national competitor) and then faces the prospect of being directed away from our shop. If we manage to keep the job, SGC pays me an average of $50 for a repair, but Farmers pays approximately $200 per incident, allowing our competitor to make close to $150 off every repair we do for Farmers.

The constant attempt by SGC to direct all the business to itself seems to me to be anti-competitive. Now, with the inclusion of incident pricing, it seems even more so. What is the value of my repairs to Farmers Insurance?  Isnít this a moot point since, according to sources with whom Iíve spoken, I estimate that Farmers pays Safelite approximately $200 per repair?

Every repair on the per-incident pricing helps Safelite, a competitor, achieve the cost structure (price) it gave Farmers Insurance. By doing the right thing for my customers in repairing their windshields, I actually benefit my competitor. In reality, Iím funding my competitor, who wants to put me out of business. At that point, Iím left to think, why should I do repairs at all for Farmers?

Bill Batley is the president of the National Windshield Repair Association and owner of NOVUS Windshield Repair in Seattle.

 

 

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