Auto Glass Industry Reacts to Allstate’s Dealer Glass
Parts Pricing Revision
Allstate recently announced that it is changing the amount it will pay
for dealer glass parts and will now reimburse only 90 percent of the dealer
list price for these parts. In addition, company officials say that, based
on this new rule, the insurer will not authorize shops to collect or require
any additional amount from Allstate policyholders, other than the insured’s
deductible, in the case of dealer (or OE) glass parts.
“Dealer glass parts and
related costs must be authorized in advance of installation by contacting
and obtaining such authorization from our program administrator, LYNX
“Dealer glass parts and related costs must be authorized in advance of
installation by contacting and obtaining such authorization from our program
administrator, LYNX Services,” writes the company.
Many shop owners have expressed fear about what this new policy may do
“It’s just one more thing where we are losing a little bit more money,”
says Jerry Mauldin, president of Mauldin’s Auto Glass in Gainesville,
“The insurance companies are squeezing us,” adds John Kachnik of Fox Valley
Glass in St. Charles, Ill., a Chicago suburb. “I’ve got an OEM glass that
a customer wants, and I look at that 10 percent margin … We assume all
the liability [for the job]. The dealer’s not going to help us out.”
While Allstate has announced the new policy publicly, it appears others
may be making changes as well. “We haven’t had it happen to us with Allstate
yet, but we had another insurance company that only agreed to pay half
for an expensive dealer windshield,” adds Mauldin.
Donna Braden, president of Jack’s Glass in Allentown, Pa., points out
that sometimes the use of dealer parts is inevitable.
“We only use dealer parts when absolutely necessary, but some customers
demand it and sometimes, there is no aftermarket that will fit properly,”
Allstate officials had not responded to requests for comment at press
time. Officials from LYNX Services, which administers Allstate’s glass
claims program, declined to comment, deferring to Allstate.
New York Auto Glass Shop Owner Files Suit Against 14 Insurers
David Harner, owner of Auto Glass of Westchester Windshield Doctor, has
filed a suit against 14 different insurers, along with two third-party
glass claims administrators (TPAs) and their owners alleging breach of
contract, fraud, unfair claims settlement practices, restraint of trade,
anti-trust, and coercion, among other charges. The suit originally was
filed in the New York Supreme Court, but was moved shortly after filing
to a federal district court.
Harner names a number of insurers in the complaint, including Allstate,
GEICO, Hanover, Travelers and others, along with their TPAs, Safelite
and LYNX Services. In addition, Harner names Safelite parent Belron US
and LYNX parent company Pittsburgh Glass Works (PGW) in the suit.
Harner alleges that “all the defendants actions, individually, combined,
and in concert, are unreasonable under the circumstances, [and] have denied
[him] the right to earn income, his ability to create a sound business
reputation, and have denied him his right to continue to operate his business
without interference, in a free, unfettered, and profitable manner, within
the framework of the law.”
He further claims that the TPAs noted “together, through planning and
foresight, have created a contract an/or combination and/or conspiracy
in the form of trust or otherwise, amongst and between those defendant
insurers, by using the defendant PGW and/or the defendant LYNX, or the
defendant Belron and/or the defendant Safelite, as intermediaries in an
attempt to restrain trade or commerce, and to enforce a mandate to set
and/or fix and/or stabilize prices, and/or to restrain trade, and/or whereby
a monopoly is or may be established or maintained … ”
Harner is seeking $2 million in injunctive relief, along with court costs
and attorneys’ fees.
The complaint notes that Harner’s company also operates as Novus Windshield
Repair (as part of the Novus franchise system) and as Auto Glass of Westchester.
At press time, a July 11 hearing was scheduled. Stay tuned to www.glassBYTEs.com™
for the latest updates.
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