Volume 13, Issue 2 - March/April 2011

 


Insurance talk
policy briefs

Allstate Sues Washington Auto Glass Shop and Its Owners for Insurance Fraud Allstate Insurance has filed a suit
against Auto Glass Express and Premier Auto Glass in Burien, Wash., along with company owners Michael and Trena Perkins, alleging that in multiple cases they billed (and were paid for) OEM glass, while actually “purchasing and installing aftermarket windshields,” according to court documents. Previously, the Washington state insurance commissioner’s office had filed criminal charges against Michael Perkins for related allegations involving Allstate, State Farm and MetLife.

“Despite the fact that defendants installed an inferior product that defendants had acquired at a lower price, defendants continued to bill and collect funds from Allstate based upon its representations to Allstate that it was installing original manufactured glass in all instances,” writes the company in its January 4 complaint. “At no time did defendants ever advise
Allstate of the true nature of the work it was performing on subject Allstate insured vehicles. Moreover, defendants never advised Allstate of the fact that it was acquiring the inferior glass products at a reduced rate as opposed to the higher rates being charged to Allstate in the direct billings.”

Allstate officials say that when the state’s Office of the Insurance Commissioner launched its January 2010 investigation, it “identified a number of specific Allstate customers who had obtained fraudulent services through Premier.” These totaled 2,572 Allstate customers serviced by the companies, according to court documents.

The insurer claims the amounts charged for the services for all of these “was fraudulent and deceptive” and that the company has been overcharged a total of $585,946.08 by Premier and Auto Glass Express.
Allstate is seeking a jury trial in the case. At press time, neither the Perkins nor their companies had responded to the complaint.

In addition, a criminal case against Michael Perkins is still under the review of the King County Superior Court.

Trena Perkins declined to comment on the case.

Florida CFO Awards Three “Witnesses” Total of $25,000 for Providing Info in Lee and Cates Fraud Case
The office of Florida chief financial officer Jeff Atwater has awarded a total of $25,000 to three “witnesses” who allegedly provided information in the insurance fraud case filed against Lee and Cates Glass Co. in Jacksonville, Fla., in early 2009.

According to state officials, one of the witnesses will be paid $15,000, one will receive $8,750 and the other $1,250; none of the three was identified. The awards were calculated based on the amount of assistance each provided, according to Nina Ashley Banister, communications coordinator for the Department of Financial Services.

“The anti-fraud reward program is promulgated by statute s. 626.9892, FS, Administrative Rule 69D-1 and DIF policy 218,” says Banister. “These govern the criteria and requirements of the program. The rule sets the guidelines for the reward amounts, which are based on the amount of the potential or actual loss … “

Banister advised she could not reveal the identity of those rewarded in the Lee and Cates case, but did say they were not employees of an insurance company.

The funds come from “annual legislative allocation,” according to Banister.

The state claims that Lee and Cates Glass Co. filed 2,245 fraudulent claims totaling more than $1.2 million, and that it “allegedly overbilled windshields and associated parts by billing insurance companies for a dealer windshield but using a less expensive, aftermarket item.”

Insurer Group Reports 450 Percent Increase in “Questionable” Auto Glass Claims
The National Insurance Crime Bureau (NICB) says “questionable” auto glass claims increased 450 percent from 2009 to 2010. NICB defines “questionable” claims as “those claims that NICB member insurance companies refer to NICB for closer review and investigation based on one or more indicators of possible fraud.”

NICB officials say that in 2010, the bureau’s members reported 2,182 “questionable” auto glass claims, compared with 397 in 2009—a difference of 1,785 (450 percent).

In 2008, the group reports that it received reports of only 252 “questionable” auto glass claims—58 percent less than in 2009.

Auto glass topped the auto insurance claim list, with inflated towing/storage bills following just behind it, in comparison to 2009.

NICB also has issued several recent warnings to consumers about “windshield bullies,” including a February 2011 press release that advised consumers about “insurance scams involving unsolicited service providers,” including those representing auto glass repair and replacement businesses. That release featured a new slogan, “If you didn’t request it—reject it,” and mentioned “unnecessary auto glass repairs, aggressive and exorbitant towing charges, needless home repairs, total roof replacements, sinkhole damage, [and] solicitation of accident
victims.”



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