Windshield Repairs Fuel Insurance Battle In Florida

November 12, 2019/in 4CBS Miami

November 12, 2019 at 6:00 pm

TALLAHASSEE (CBSMiami/NSF) — An effort to crack down on alleged fraud in the auto-glass repair industry, particularly along the Interstate 4 corridor, is spurring an insurance battle in the state Legislature.

A proposal by Sen. Linda Stewart, D-Orlando, that went before the Senate Banking and Insurance Committee on Tuesday would prohibit repair shops from offering rebates or other incentives, such as gift cards, in exchange for motorists making insurance claims for windshield repairs or replacement.

The proposal (SB 312), tied to a long-running controversy about the state’s “assignment of benefits” insurance laws, would also ban repair shops from compensating people to solicit for insurance claims.

The committee tabled the bill Tuesday due to a lack of time, but Stewart remained optimistic about the proposal, saying, there are a “lot of good things” in it.

Stewart also is looking to amend the proposal to require repair shops to produce written estimates, to require estimates be in larger print, to set up a pre-lawsuit process between repair shops and insurance companies, to impose windshield calibration requirements and to increase notifications to customers.

“We’re just trying to make sure when you get your glass replaced, everything is working when you leave,” Stewart said.

However, Leslie Kroeger, president of the Florida Justice Association, said the bill isn’t “pro-consumer” and won’t help small businesses.

“There is no requirement that the insurance company pay once they get all the additional things that now these small businesses are required to submit,” Kroeger said. “There is no requirement that any payment be made within any time period.”

She added that the measure will help larger auto-glass companies, which already have a monopoly.

“What this really is doing is death by 1,000 cuts to small businesses,” said Kroeger, whose association represents plaintiffs’ attorneys.

But before the meeting, William Large, president of the business-backed Florida Justice Reform Institute, argued state laws intended to help insurance policyholders continue to benefit trial lawyers and auto-glass vendors.

At least part of the debate is rooted in assignment of benefits, a longstanding practice in which policyholders sign over benefits to contractors who ultimately pursue payments from insurance companies.

The practice has become controversial in recent years. Insurers have complained about fraud and litigation, while plaintiffs’ attorneys and other groups argue so-called AOB helps make sure claims are properly paid.

The Florida Justice Reform Institute issued a study that contended 90 percent of auto-glass assignment of benefit lawsuits have come from 15 companies, with most of the lawsuits filed in Orange and Hillsborough counties.

Stewart’s bill is filed for the 2020 legislative session, which starts Jan. 14.

Lawmakers during the 2019 revamped assignment of benefits for claims dealing with homeowners-insurance but did not make changes related to windshield repairs. The homeowners-insurance changes, in part, limited attorney fees in AOB lawsuits filed by contractors against insurance companies.

Lawmakers said Tuesday it remains too early to determine the impact of assignment of benefits changes for homeowners.

Susanne Murphy, deputy commissioner of property and casualty at the state Office of Insurance Regulation, told the Senate committee that hurricane-driven increases in the cost of reinsurance — insurance for insurance companies — may “mask” anticipated assignment of benefits savings.

https://miami.cbslocal.com/2019/11/12/windshield-repairs-fuel-insurance-battle-in-florida/

Report: Auto glass AOBs aren’t slowing down

November 12, 2019/in Florida Politics

2019 is on track to have as many auto glass lawsuits as last year

By Drew Wilson on November 12, 2019

Suing over car window and windshield repair fees is a booming business, according to a new report from the Florida Justice Reform Institute.

FJRI’s Auto Glass AOB Data Update, released Tuesday, shows 2019 is on track to have as many auto glass lawsuits as last year. But FJRI said the number could be much higher, as their report only tracks auto glass AOB lawsuits filed by companies with “glass” or “windshield” in their names.

“Our updated report shows how persistent AOB lawsuits based on the one-way attorney fee continue to drive up overall litigation and costs for policyholders,” FJRI President William Large said.

AOB, short for assignment of benefits, is a legal process that allows policyholders can sign over their insurance benefits to a third-party in exchange for a quick repair.

Those on the other end of the AOB agreement often sue insurance companies to collect fees. Insurers say those lawsuits are often for inflated claims. When coupled with the one-way attorney fees statute requiring insurance companies pay the cost of litigation if they lose, premiums are increasing.

“Although the benefits of the one-way attorney fee statute were clearly intended for premium-paying policyholders, corporate assignees continue to cash in on its common law extension,” FJRI counsel and Capital City Consulting lobbyist Ashley Kalifeh said.

Lawmakers passed an AOB reform package last year, but it only applied to home repairs. Auto glass AOBs were carved out in the closing days of the 2019 Legislative Session.

The auto glass language was removed after complaints from independent auto-glass repair shops, which said they were being shortchanged by insurers and were forced to sue in order to get fair pay for their work.

Still, FJRI’s report shows nearly all auto glass lawsuits come from just 15 law firms — one firm, Malik Law, accounts for nearly 30 percent of all such lawsuits filed this year.

Additionally, the vast majority of auto glass lawsuits are in Hillsborough and Orange counties. FJRI speculates that’s due to higher attorney fee awards in those counties.

“Last year the legislature acted boldly to address rampant AOB lawsuits in the context of property insurance claims.” Large said. “Now, the legislature should continue their good work and pass AOB lawsuit reform for auto glass claims.”

https://floridapolitics.com/archives/310935-report-auto-glass-aobs-arent-slowing-down

Linda Stewart seeks to reduce windshield glass repair incentives

November 12, 2019/in Florida Politics

Linda Stewart seeks to reduce windshield glass repair incentives
No more cash, rebates or gift cards.

By Renzo Downey on November 12, 2019

On the heels of a report showing that the influx of windshield glass repair lawsuits is here to stay, Senators heard a bill Tuesday to reduce incentives for filing suits and increase consumer protections.

Orlando Democratic Sen. Linda Stewart’s bill (SB 312) would prevent auto repair shops from offering incentives including cash, rebates or gift cards for customers to sign over their auto insurance benefits for faster repairs.

Current incentives intended to help small businesses compete with national glass-repair brands have created an industry perpetuated by a dozen law firms, largely in Stewart’s home of Orange County. Local repair shops offer cheaper, expedited repairs when given the right to charge the customer’s insurance company at a rate that is often higher than through the company’s contracted vendor.

“It does hurt the insurance companies, I will say, because they’re having to pay more than they normally would pay, but they’re allowed to do that,” Stewart said. “This bill does not take away in any way shape or form their ability for a lawsuit. That’s not in the bill.”

After an amendment entered Friday, the bill would require repair shops to submit cost estimates and to notify insurance companies about pending suits, an effort to have law firms and insurance companies negotiate out of court. The fine print on the waiver relinquishing customer’s insurance coverage would also be enlarged to a readable 16-point font.

“It’s unfair to not tell the people that they’re giving away all their rights to this company. Then they find it interesting that, when they go into a lawsuit, their name is on a lawsuit because they gave away their assignment of benefit (AOB),” Stewart said.

Auto glass lawsuits peaked in 2017 at nearly 24,000, according to the Florida Justice Reform Institute report. The tort reform lobbyists estimate the number of suits to reach 16,000 or 17,000 by the end of the year, still four times the 2013 level of more than 4,000.

In the Senate Banking and Insurance Committee, lawmakers agreed to postpone further testimony on the bill until next week to allow more witnesses to testify on the bill. Stewart expects the committee to pass the bill, but the committee’s ranking Democrat, Tampa Sen. Darryl Rouson, said he does not support the expanded bill.

Last Session, lawmakers stripped the reform from the AOB omnibus bill but left reforms in for property repairs.

More than 90% of auto glass suits come from a dozen firms mostly clustered in Orange and Hillsborough counties.

Lobbyists and lawyers appeared at the committee meeting to testify against the bill, but more are expected to testify next week, which Stewart said might derail the legislation.

Florida Justice Association President Leslie Kroeger testified that the bill would benefit insurance companies that don’t need to submit the documentation small businesses would need to complete the repair.

“Practically speaking, the larger companies, which are looking frankly to hold a monopoly in this area, have a negotiated payment. They don’t need an assignment of benefits,” Kroeger said. “So what this really is doing is a death by a thousand cuts to small businesses, to independent mom-and-pop auto replacement [businesses].”

The bill also requires auto shops to recalibrate advanced driver-assistance systems — modern safety features like automatic braking sensors are often installed directly into windshields — if necessary, or to notify customers that the system will need to be restored. Current law does not require shops to do so, which can leave customers unwittingly without an operating ADAS.

https://floridapolitics.com/archives/310984-linda-stewart-seeks-to-reduce-windshield-glass-repair-incentives

WINDSHIELD REPAIRS FUEL INSURANCE BATTLE

November 12, 2019/in News Service of Florida

WINDSHIELD REPAIRS FUEL INSURANCE BATTLE

11/12/2019 – Jim Turner

TALLAHASSEE — An effort to crack down on alleged fraud in the auto-glass repair industry, particularly along the Interstate 4 corridor, is spurring an insurance battle in the state Legislature.