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  • Glass repair firms cry foul

    Original Story can be read here...
    Glass repair firms cry foul
    Insurers defend deal that some say hurts local businesses


    By Karen Bouffard
    Detroit News Lansing Bureau

    Lansing— An Ohio-based company that processes auto glass claims for Michigan insurers is steering business to its own glass repair shops, critics charge — a practice they say robs customers of choice and is forcing Michigan businesses to close.

    Customers who call for glass repair approval from Allstate, Farmers, AAA and scores of other Michigan insurers are connected to Safelite Solutions' phone lines, a company hired as a third-party administrator to book repairs and process claims.

    Safelite also owns Safelite AutoGlass, one of the largest auto glass repair providers in the United States, and critics say Safelite Solutions is booking most of the jobs with Safelite AutoGlass. "My competitor is answering my phone lines," said Shari Montgomery, owner of Pollack Glass Co. in Lansing and president of the Independent Glass Association.

    Independent glass shops say Safelite is driving them out of business, a charge the company denies. According to the IGA's Michigan Chapter, about 120 shops have closed in the state in the past two years, at a loss of 1,200 to 1,500 jobs.

    They're looking to the Legislature for help. The state Senate is expected to vote on a bill this week to ensure consumers are given three choices of which company to use when they call for glass repairs.

    Nancy Cain, spokeswoman for AAA Michigan, said using Safelite Solutions as a third-party administrator saves money because it's more efficient than dealing with lots of different insurance companies.

    "We've had no complaints from our members or customers, and we always offer choices," Cain said. "If we didn't use them, it would cost more to process the auto glass claims, and we always do what we can to control cost to keep premiums down."
    Joe Ridout, spokesman for the Consumer Action, a national consumer rights organization in San Francisco, said consumers have a right to use whichever repair shop they want.

    "Insurance companies often have sweetheart deals with certain shops, but that doesn't mean consumers have to accept that," Ridout said.
    According to the IGA, Safelite handles claims for 83 percent of the auto insurance companies in the state. There are four other companies that handle claims.
    They say drivers who don't say what repair company they prefer are booked with Safelite.
    "Safelite takes compliance with all anti-trust laws very seriously and ensures that it conducts its business ethically and incompliance with these laws at all times," Safelite Group Public Relations Manager Melina Metzger said in a written statement to The News.
    "Safelite owns only 21 glass shops out of the 2,200 glass shops that exist in (Michigan). … We estimate that our share of vehicle glass repair and replacement jobs done in Michigan is less than 20 percent."

    According to Montgomery, most independent glass repair shops lost 50 percent of their AAA business after the insurer hired Safelite as its third-party administrator in 2009, and many shops went out of business.

    "I pay people $18 an hour. Those are good jobs and we're going away," Montgomery said.

    Debra Levy, publisher of Auto Glass Repair and Replacement Magazine, said what happens on the phone is largely up to each individual insurance company, because they approve the scripts used by Safelite representatives.

    "They'll say 'Please be aware Stafford Glass may charge you a different price and you will be liable for the difference and we will not warranty their work,'" Levy said, as an example of a typical phone call. "To the independents, I've been 'steered,' but to Safelite and the insurance companies, I've just been 'educated.'"
    Senate Bill 306 would require third-party administrators to offer three choices to customers who call for a booking with a glass repair shop.

    Senate leaders hope to bring the bill before the chamber for a vote by the end of the week. Amber McCann, spokeswoman for Majority Leader Randy Richardville of Monroe, said the bill would have enough Republican votes to pass.

    The bill "seeks to preserve consumer choice and bring objectivity and transparency to the referral of glass claims," said Troy Tuggle, chief of staff with Sen. Joe Hune, the bill's sponsor.

    kbouffard@detnews.com
    (517) 371-3660
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      Original Story can be read here...
      Glass repair firms cry foul
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