Volume 14, Issue 5 - September/October 2012

Independent’s Day
an iga viewpoint
by Alan Epley

Every independent auto glass retailer has had to contend with network scripts on the issue of warranties or guarantees when assisting their customer with filing a claim to third-party administrators (TPA). This most often occurs when the independent is not a member of the network. However, many network members report to me that this issue also is presented to their customers, especially when the TPA is associated with financially competing retail operations.

Recent successful legislation in both South Carolina and Massachusetts (see page 14 for related stories) address misrepresentation, coercive and otherwise misleading information by all parties in the claims process. Now we come to the subject of this column: the warranty and/or guarantee verbiage used in scripts by TPAs representing their insurer clients.

In the new law in South Carolina, neither the insurers nor their TPAs can use the warranty or lack of warranty in the script, but instead must refer any consumer question on warranty to the actual service provider for clarification. Another section does allow insurers and TPAs to advise consumers that they will not guarantee the work of the chosen shop if, and only if, they are not network members and do not agree to dictated pricing.

I had the opportunity to be a part of the intense meetings with TPAs, insurer representatives, auto glass retailers and insurer lobbyists leading up to the final version of this law. Lawmakers and their aides made clear to opposing parties that there was plenty of evidence on steering, and warranties/guarantees were clearly noted in network contracts to contain language removing the TPA from any liability on member shops’ work.

Breaking Down the Terms
So, let’s discuss the warranty and guarantee that new laws in South Carolina address and these terms that are commonly used by insurers or their TPA in the first notice of loss (FNOL). A dictionary defines warranty as: “A guarantee given to the purchaser by a company stating that a product is reliable and free from known defects and that the seller will, without charge, repair or replace defective parts within a given time limit and under certain conditions.” So, a warranty is a guarantee. A dictionary defines a guarantee as: “A promise or an assurance, especially one given in writing, that attests to the quality or durability of a product or service.”

Therefore, a warranty is a guarantee and a guarantee is usually something in writing. In our industry, the consumer has the legal right to make the buying (choosing) decision on goods and services in an auto glass claim. Under most policies, the insurer has that right but always refuses to invoke that right, most likely for liability reasons.

In an attempt to get examples of written warranties or guarantees from insurers, I contacted a legal representative from the largest network. He politely referred me back to insurers. I, for one, would like to see insurers’ warranty or guarantee in writing because I never have before. Have you? Whether a network participant or not, wouldn’t you like to know what it covers? For what time period? For precisely what conditions? Is there really such a thing, or is it smoke and mirrors or blatant misrepresentation?

To solve this mystery, all insurers or TPAs have to do is show us, and their policyholders, this written statement. Until these documents are provided, there isn’t such a thing and the consumer is the ultimate victim. Have you ever seen TV ads by insurers saying the repair work is guaranteed for as long as you own the vehicle? It does not say that X insurer is guaranteeing anything. Don’t you think consumers and auto glass shops should know the truth? Like folks from Missouri … SHOW ME!

Alan Epley is president of the Independent Glass Association. He also serves as president of Southern Glass and Plastic in Columbia, S.C.

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