WHY STATE FARM DID IT
In a meeting with industry officials in late May, State Farm Insurance national glass manager Bob Bischoff explained that the company made the decision to stop waiving the deductible for repair in order to make its policies consistent.
According to Bischoff, windshield repair is the only service for which the company waives comprehensive deductible. For example, he pointed out, if an insured suffers a repairable parking lot door dent, State Farm does not waive deductible for its repair. Additionally, Bischoff stated that State Farm believes deductibles create an obligation by both the insured and the insurer and, if waived, the insured no longer shares the responsibility.
State Farm will roll out the elimination of windshield repair deductible in six states (Alabama, Kansas, Oklahoma, Washington, Idaho and Michigan) starting December 1, 2005 and plans to complete the process nationwide throughout 2006.
At the meeting, Bischoff told National Windshield Repair Assoc-iation (NWRA) past presidents Dave Taylor and Bill Batley, director of operations Peg Stroka, NWRA board member Jackie Newman, Independent Glass Association (IGA) executive director Marc Anderson and IGA president Dave Zoldowski that State Farm is not “backing away from repair,” and that the company will continue to encourage repair. He noted that many State Farm policyholders have no deductible for comprehensive and State Farm will continue to pay for their windshield repairs.
When questioned, Bischoff was unable to quantify the number of repairs under the current program, the number anticipated after State Farm discontinues deductible waiver for repair or the anticipated increase in the number of replacements.
He stated that insureds with deductibles will continue to be provided with windshield repair information. Policyholders interested in repair will be given the Offer & Acceptance (O&A) shops’ information using the same basis of selection as if State Farm were paying the invoice.
He anticipates that many policyholders will call their agents directly and be given the O&A shop information directly by their agent. When asked if LYNX/ State Farm’s customer service representatives will continue using the same scripting for windshield repair, Bischoff replied that scripting was currently being reviewed and that changes are possible.
Bischoff categorically denied any plan to change the current open-selection model when asked about the possibility of a different selection process for cash-paying insureds to be assigned to service providers. The only difference from the current process, he said, would be that policyholders with deductibles will pay the repairer or auto glass shop directly.
Responding to a question about a referral fee for windshield repair or auto glass replacement when the cost of service exceeds the insured’s deductible, Bischoff stated that State Farm has no current plans to charge a referral fee; however, he stated that he did not know at the time what LYNX would do about the referral fee.
Asked if State Farm intended to raise the average comprehensive deductible from its current $250 to $500, Bischoff stated that the amount of deductible is mandated in a few states, while others require no-deductible coverage be made available and beyond these legislative requirements the amount of comprehensive deductible is purely a matter of insureds’ choice. He stated that State Farm is planning to give customers more options in how their policy is assembled. He also agreed that currently the average deductible is rising but was unable to project the future effect of rising deductibles on the number of auto glass or windshield repair claims paid by the company.
In response to a question about how firm the decision to discontinue the windshield repair deductible waiver was, Bischoff stated that the decision process had begun years ago and that State Farm is committed to the change. When asked what would happen if policyholders opposed the program, he said that the company is always responsive to its customers’ concerns and would review any decision if a significant number of them became concerned.
He expressed interest in the development currently underway of a standard for repair of laminated automobile glass and invited industry representatives to contact him with questions or concerns.
METRYX Includes Repair
“The METRYX registry service, sponsored by LYNX Services, is designed to, among other things, help customers associate value with professional training, certification, and related credentials that are earned by glass repair and/or replacement companies,” Chris Umble, vice president, strategic initiatives, explains. “The combination of these verifiable attributes are designed to help establish a more complete picture of the value, in addition to competitive price, that glass service providers offer to customers. The idea is that the more complete picture of value, when presented to customers, will in the future help create an improved return on investment for time and money spent by shops on training and professional development.”
Among the third parties LYNX is working with on the verification of METRYX-collected information is the National Windshield Repair Association (NWRA). The company has already initiated working with NWRA, as well as AGRSS, IGA, NGA, and others to create the audits required to validate information.
NWRA, NGA and IGA provide programs for training technicians and others in the industry, as do various for-profit providers of training, Umble points out.
October 19 is the date when the information is going to affect production of the claims management process such as rotation, states Steve Shaw, marketing manager for LYNX Services.
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