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Supplement, Fall 1999

Insurance talk

 

HAND SHAKES

Safelite Snags
American Family

Spurred by the desire to provide 24-hour service seven days a week, American Family In-surance (AFI) of Madison, WI, has signed an agreement naming Safelite Glass Corporation of Columbus, OH, as its auto glass program administrator.

Under the new program, AFI customers will call their agent or the claims center. The call will then be transferred to Safelite where customer service representatives will take the first notice of loss, confirm coverage and assist the policyholder in scheduling service. AFI says its customers can choose the shop of their choice or a Safelite service center.

“We chose Safelite for customer service issues,” said Ken Muth, corporate communications specialist at AFI. “Our physical damage department said Safelite would do an excellent job of customer service.”

According to Muth, Safelite representatives assured him the company has the resources through its network shops or possible new locations to handle the AFI business. In a talk with investment professionals last month, Safelite president/CFO Doug Herron in a talk with investment professionals, the company plans to open approximately five shops in the Wisconsin and Minnesota areas. Overall, Herron says Safelite is well on its way to getting store coverage for American Family in these areas, though it may have to subcontract more work out during its first few months. A few glass shops in Wisconsin have already felt the effects of the union, while others are anticipating a loss of business from

AFI, which had generally been known as an independent-friendly insurance company. One Wisconsin glass shop owner, who preferred to remain anonymous, is already seeing a change in volume. “We don’t do as much American Family glass as we used to,” she said. “Safelite will occasionally call us, but those instances are few and far between.”

Mark Olsen of A-1 Glass Inc. in LaCrosse, WI, has not lost any business, but he says the Safelite/AFI agreement has hurt him in other ways. He says a number of customers have complained to him because they are forced to deal with more people in the claims process than they had previously. In addition, the amount of money he gets for working with American Family has diminished. “Their pricing has changed,” he said. “We are billing our jobs out for less money then we had in the past.”

Joe Schraufnagel of Schraufnagel Auto Glass in Ashland, WI, says he has also lost money on his American Family jobs, yet he is more concerned with the principle of the company’s decision to change its procedure. “We are a local business and have been providing a service to AFI for many years without any problems,” he said.

While glass shops did not feel the claims processing system needed to be changed, Muth said it was important for AFI to sign on with Safelite so it could compete in the 24 hour, seven day a week atmosphere that is becoming prevalent in insurance. According to Muth, the deal Safelite offered made it necessary for American Family to sign up with them. “This was a good deal for us,” Muth said. “Our customers can access us 24 hours a day, seven days a week.”

LITIGATION

State Farm Mired in
Aftermarket Lawsuit

State Farm Insurance Company of Bloomington, IL, is mired in a lawsuit that could have implications for the auto glass industry. The suit was brought against the company by more than five million former and current State Farm policyholders, according to CBS News. The suit alleges that the aftermarket materials State Farm uses are inferior imitations of their original equipment counterparts.

AGRR

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