Volume 14, Issue 5 - September/October 2012

legal updates

South Carolina Governor Signs Auto Glass Bill into Law

South Carolina Gov. Nikki Haley has signed a highly debated auto glass bill into law. Included in the new law are requirements that third-party administrator (TPAs) ask insureds whether they have an auto glass provider of choice and that they honor that choice. The law also limits what TPAs can say about the provider of choice’s warranty.

The new law states: “The insurer or third-party administrator ... must not make statements regarding the warranty offered by the provider of choice. If an insured asks the insurer or third-party administrator questions regarding a provider’s warranty, the insurer or third-party administrator must refer the insured to the provider for clarification.”

The new law also prohibits a vehicle glass repair or replacement facility from threatening, coercing, intimidating or engaging in unfair or deceptive practices in an attempt to convince the insured to file a claim for vehicle glass repair or replacement.

“The large contingent of South Carolina independent auto glass shops are pleased with a step in the right direction in the passage of [bill] H4042,” says Alan Epley, president of Southern Glass & Plastics in Columbia, S.C. “This group is very excited to build on H4042 in the next session to promote changing the current unfair trade practices now occurring with some TPAs/competitors. It is also felt that price dictation/fixing of consumers proceeds from entities not in the contract of repair in a glass claim is to the detriment of consumer safety and competition. Our experience in the last rounds of compromise talks was that many carriers would not even agree to let their policy of insurance (entered into H4042 by legislative aids) determine consumer proceeds—much less the open market. We look forward to educating lawmakers on these issues, as well as hush-hush issues such as the guaranteed average invoice agreements between carriers and TPAs adversely affecting consumers with claims and competition.”

“This bill has gotten so watered down that it is not even about what it was originally supposed to be about, which is steering,” adds Mary Anne Jones, owner of Absolute Glass Inc. in Lexington, S.C. “I definitely think Safelite still has the upper hand in winning. We had a lot of senators on our side, but there were several who were clear supporters of or recipients of financial contributions from Safelite from the get-go. I don’t think it is fair that it had to be watered down. We will just have to try again and keep fighting this battle with Safelite because they continue the same things.”

Brian DiMasi, senior corporate counsel for Safelite, disagrees with Jones’ assessment. “Safelite always honors the customer’s right to choose a glass shop, and HB 4042, in its final form, preserves and strengthens that right,” DiMasi says.

Massachusetts Has New Auto Glass Law
Massachusetts Gov. Deval Patrick has signed a bill into law that includes a number of provisions that will affect auto glass shops in the state. The new law will require glass shops to “maintain records for each motor vehicle upon which motor vehicle glass repair services have been performed, showing the usage of all glass parts, major accessory parts, including mouldings and major hardware component parts, and the adhesive system used in the motor vehicle glass repair.”

The law also will require that anyone who registers as a new or renewal auto glass shop must have a physical location, which includes indoor facilities to perform repairs.

Finally, the law also includes an anti-steering provision, which will prohibit insurers and third-party administrators from requiring consumers to use a certain shop or from using unfair or deceptive acts to convince consumers to use a certain shop, with potential fines ranging from $1,000 to $5,000.

Barry Gaughran, president of the Massachusetts Glass Dealers Association, applauds the anti-steering provisions in the law.

“[The law] will help the consumer, when choosing to use their local glass shop, not to feel intimidated, threatened or coerced for using, or for having used, their local glass shop, by any insurance company, agent or TPA,” he says.

© Copyright 2012 Key Communications Inc. All rights reserved.
No reproduction of any type without expressed written permission.