Volume 13, Issue 3 - May-June 2011


In or Out?
Industry Debates the Role of Insurers in Windshield Repair
by Penny Stacey

The struggle between the auto glass and insurance industries is not a new one. Whether it’s an issue of alleged steering, billing problems, paperwork, or the new inspection issue (see related story on page 26), a rift has always existed between these two interests. Based on this, it may have been no surprise for some to see a suggestion from National Windshield Repair Association (NWRA) president Kerry Wanstrath (also of Glass Technology) in January/February AGRR™ magazine that perhaps the insurance industry should exit the auto glass industry (see story on page 36 of the January/February issue).

Wanstrath likened auto glass repair and replacement needs to a maintenance issue, and compared it to the tire industry. “Do people stop getting their tires repaired when they get a nail or flat?” he asked. “Of course they don’t. There is lots of life remaining in the tire, so you simply fix the affected area and you are good to go. I see no real difference in a windshield.”

He also argues that, if insurers stopped covering auto glass in their automotive policies, the industry would have more direct access to the consumer. “I truly believe most (if not all) independent shops would be better off and have better market access to the real customer (the person who owns the car on which you are working) if all insurance companies exited the auto glass repair and replacement industry,” he writes.

Ultra Bond president Rich Campfield, whose company manufactures a windshield repair system and also has a retail operation based in Durango, Colo., agrees, pointing out some of the issues that the insurer-auto glass industry relationship has fostered.

“Our courts and government are too broken to enforce the laws that protect the consumer and small businesses when big insurance is involved,” he says.

Jeff Wurst, owner of Crackmaster Windshield Repair in Redding, Calif., has mixed views on the topic. “Insurance makes it easy for the customer to get the repair done, but insurance has too much to do with the controversy of steering and conflict of interest that restrains my trade,” he says.

“There is a lot of legitimacy lent to the windshield repair industry when the insurance company is willing to foot the bill.”
—Charles Parker, ACTION Windshield Repair

Objection …
However, there are several industry representatives who prefer the status quo—and would like to see the auto glass industry’s longstanding relationship with the insurance industry continue.

In fact, AGRR™ magazine received and published a letter to the editor in March/April 2011 (page 22) about this very topic from Phoenix-based Fas-Break Inc. chief executive officer Kerry Soat, who claims the insurance issue has a safety component. “Insurance companies offer glass coverage for the windshield because it is part of the vehicle’s safety features,” he says. “A broken windshield makes for an unsafe vehicle, and an insurance company aims to keep your vehicle in a safe operating condition.”

Charles Parker of ACTION Windshield Repair in Harrison, Ark., argues that the involvement of the insurance industry in an auto glass claim also can help promote windshield repair.

“Admittedly out here in the field there is a lot of legitimacy lent to the windshield repair industry when the insurance company is willing to foot the bill [for the customer], and they connect you with your customers,” says Parker. “There’s a lot to be said for that.”

Some also point out that an insurer exit from the business could make things difficult for those who rely mostly on insurance work.

“I think that if auto glass wasn’t covered by insurance a lot of the smaller repair and replacement companies that survive primarily on insurance work right now would close their doors immediately,” says Eugene, Ore.-based Delta Kits Inc. president Brent Deines, who for many years operated his own glass shop. “That’s certainly something I don’t want to see. I do think there are enterprising entrepreneurs out there with flexibility who would go on, but certain people are going to suffer.”

In states that don’t require annual safety inspections, without the help of insurance, consumers might not be bothered by windshield damage, Deines suggests.

“One concern I have a long those lines is that consumers if consumers have to pay out of pocket, many simply aren’t going to have that work done,” he says. “At least in states where annual vehicle inspections aren’t required, if people have a choice between having cable TV or living with a broken windshield, I’m kind of concerned they’d live with that broken windshield.”

The Deductible Issue
Many today already are paying for their own auto glass claims, due to both high deductibles for replacements—and the fact that some insurers, including State Farm, have ceased waiving deductibles for windshield repair. State Farm first announced the decision to stop this practice in April of 2005—more than six years ago.

“We all should be promoting the safety aspects of windshield repair to the insurance industry, along with getting State Farm to reverse their decision regarding waiving deductibles for repairs, rather than trying to avoid dealing with the issues at hand,” says Soat.

State Farm officials have said that waiving deductibles for windshield repair never was meant to be a permanent program,
though—and that the program only was put into place to help increase consumer awareness of the service.

“It was never our intention to waive deductibles forever,” said State Farm’s Bob Bischoff, who then served as national glass claims manager for the company, during a 2008 industry meeting. (At press time, State Farm officials had not responded to requests for comment on whether this policy might be considered again.)

But Parker says even now he’s still feeling the effects of the six-year-old decision. “My State Farm business is about half of what it was,” he says. “A lot of them are willing to pay, but a lot of them are not. A lot of them are willing to wait and let it bust out.”

Wurst, however, says he thinks many insureds still are happy to pay for windshield repair—despite the deductible issue.
“I still get a fair number of State Farm customers, even though they quit waiving deductibles, who are still responsible and
want to repair their windshields,” he says.

Wurst estimates that approximately 80 percent of customers still will pay for a windshield repair out of pocket. “People are still concerned about keeping their windshields repaired and maintained,” he says.

Wanstrath agrees. “Since State Farm stopped waiving the deductible for repairs, have State Farm customers stopped repairing their windshields? That has not been our experience,” he says.

Deines says when insurers make such policy changes, it’s up to windshield repair business owners to adapt accordingly—and without that change business likely will suffer. “I think that initially a large portion of our customers panicked [when State Farm stopped waiving deductibles for windshield repair],” he says. “Some of them went out of business immediately, but the vast majority stuck it out and adapted their business models for that change.”

He adds, “We always instruct our customers that they need to be flexible and look ahead and don’t expect things to always be the same. Don’t put all your eggs into one basket. If your business is all about insurance, you better have a Plan B.”

Penny Stacey is the editor of AGRR magazine.

Calling All Readers
What do you think about this issue? What are your top issues as a windshield repair business? Please e-mail pstacey@glass.com.

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