“That’ll Be Cash” Revisited
I enjoyed your article, “That’ll Be Cash,” and felt I should take the time to comment (see November/December 2002 AGRR, page 44).
I have been in the replacement window, flat glass and auto glass industry for 15 years and I can fix the auto glass pricing with just two simple lines put into law.
1. Only the owner of the insurance contract/policy (“Insured”) is permitted to submit a request for reimbursement under any claim; and
2. The owner of an insurance contract/policy (“Insured”) is not required to divulge whether or not they have insurance coverage and shall not be denied service for refusing to divulge such information.
I believe two things will happen. First, the networks (middlemen) will be taken out of the equation, which will reduce the cost and promote consumer choice.
Secondly, the auto glass replacement company will receive cash from every customer, for all sales, which is the way it should be. I know this works because I never ask a customer if he has insurance and I never bill insurance companies on behalf of my customers in the window replacement and on the flat glass side of the company. Why should I care how or from where they get the money? When a customer authorizes me to do work, my contract is with him—not his insurance company! It’s not my concern whether he has any coverage. If he has coverage that is his business, not mine, and he can take care of getting reimbursed. This would also work for the health insurance industry.
Now, here is the bad news: things will never change. What would you rather have, 15 percent of $100 or 15 percent of $200? If you’re like most, the answer is simple—15 percent of $200. That is why things will never change. The networks want to appear to give the insurance companies good discounts but, on the other hand, they want to keep the price as high as possible to maximize their profits. Also, the insurance companies make a percentage on every dollar we send in for premiums. It’s not too hard to figure out that if they have to lower rates due to better prices on auto glass claims they will be getting the 15 percent of $100 in lieu of the 15 percent of $200.
By the way, your article didn’t mention networks and also doesn’t address the fact that we have to have more than 50 price levels because each insurance company and network makes us sign different contracts with different prices. Wouldn’t it be great if I only had to worry about one or two?
St. George Glass Co. Inc.
Iron Mountain, Mich.
More on Cash vs. Insurance Pricing
I found the November/December 2002 issue of AGRR very informative and it has motivated me to look into joining glass organizations in my area.
I am a sales and marketing guy from a glass company in Tuscon, Ariz., where we, like everyone else, have a large number of competitors—many that have far more resources and others that use poor installation techniques with cheaper glass to provide cash prices that rival free steak dinners the others are giving away.
I am sure that we are all up against the same issues regarding the price difference between cash and insurance, and I agree that I don’t think it will go away soon. As long as there is a middleman between the insurance company and us, then the delay in payment and price modifications justify the difference in costs. I deal with several insurance companies directly, I receive payment in hand within four business days and I do everything electronically. You can bet I give them a higher discount than the networks.
Thank you again for your publication. I look forward to reading more in the next issue.
Star Auto Glass
I really enjoyed reading about an independent that is doing well in “One War at a Time” (see September/October AGRR, page 48). That is great to see. I noticed in the photo of the tech cutting out the windshield on page 51 (and below) that the wipers weren’t removed and there were no fender covers. As a tech, I know that this is very commonplace, but I’m surprised to see it in the pages of AGRR. This is just an observation .
Editor’s Note: Following is a response to the above letter from Paul Heinauer, president of Glasspro in Charleston, S.C.
The picture was set up by a local photographer and reprinted in AGRR. As you can see how the guy is in his position pulling on the cold knife, it seems rather apparent he is exerting too much energy. I apologize for any embarrassment this may have caused AGRR.
Thanks for your support of our industry.
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