Volume 33, Number 11, November 1998


Rumors to Rest

Duncan Systems Addresses Concerns About its Role as State Farm’s RV Parts Provider

by Regina R. Johnson

Rick Mulanix’s 18 month term as president and chief operating officer (COO) of Elkhart, IN-based Duncan Systems, Inc. is one that, to date, could probably be likened to induction by fire. The glass parts distributor’s distinction as the distributor of choice for State Farm Insurance Co. policyholders to use when making RV glass claims has made Duncan the subject of much controversy in the business since the agreement was forged two years ago. Mulanix addressed many of the industry’s concerns in an exclusive USGlass interview prompted by Duncan Systems.

Track Record of Growth

The company has doubled in size each year since its founding in 1992. In the past year alone, according to Mulanix, Duncan has more than doubled in staff and sales; it now has approximately 70 employees and sales of $15-$20 million. The company has added a Canadian subsidiary intended to increase business with insurers there, and has signed an exclusive agreement with Touring-Sport Landsberg GmbH of Germany to handle European distribution.

In addition, Duncan is building a new 52,000-square-foot facility on its property, and recently opened sites in Eugene, OR, and Las Vegas, NV. It plans additional sites in northern Florida, the Mid-Atlantic, Denver, CO, and Texas. Mulanix says locations for these "secondary facilities" are chosen based on demographics and transportation routes. "Our goal is that 80 percent of the country can be serviced by Duncan Systems within 24 hours."

Despite Mulanix’s assertion that it does business with 40 of the 70-75 "top-tier" insurance companies, Duncan’s core business is distributing windshield and sidelites, he says. Since 1990, the company has also operated a school to train insurance adjusters in estimating repair damage for RV repair.

The Agreement with State Farm

The genesis of Duncan’s relationship with State Farm goes back to its work with insurance agents in estimating RV glass claims. From 1993 to 1996, according to Mulanix, D&D Custom handled RV claims for 40 of the 50 major insurance companies—excluding State Farm. The efforts of D&D co-founder Ron Dole to pursue State Farm’s RV glass parts business had been rebuffed—"until he let them know it was just for RV glass," says Mulanix. Dole secured an audience with the insurer in 1996 and the two entities came to an agreement "to allow D&D Custom to help [State Farm’s] network and insureds with RV glass," as Duncan’s president describes. The arrangement went into effect in the latter part of 1996 and 1997.

"Our basic agreement is to supply glass to State Farm and its insureds through independent and network glass shops," he says. According to Mulanix, LYNX Services by PPG contacts Duncan with a State Farm claim. Duncan then speaks with the insured to obtain information about the claim and to ask if they have a preferred installation shop. Duncan arranges an appointment for the insured with a glass shop and ships American-made OEM glass to the shop, where it is installed. Then Duncan bills the job, he says, and the installing shop receives a flat rate of $150 for a single windshield or $250 for a double windshield to cover labor, preparation, clean-up, materials and any other costs. Mulanix says that this installation price is set by State Farm. He adds, "State Farm allows $105 and Duncan adds an additional $45.

"Sometimes for a difficult installation we offer additional funds for the [job]," he notes. "All [the glass shops] have to do is call us and explain."

Mulanix notes that having a good rapport with AGR shops is essential to his company’s work. As he points out, "There are many types of windows we don’t carry." In cases where such a lite is needed, he says, Duncan asks the shop if it can obtain the glass. "If it can, the whole job goes to the shop and the shop gets a new customer." He says that Duncan handles the paperwork only, for which it receives a small fee from State Farm. "For every one windshield we sell," says Mulanix, "we give out a little over two of what we call ‘other’ types of jobs."

Asked how Duncan chooses what shops are offered the installation work when the policyholder has no preference, Mulanix replies that his company calls a shop in the insured’s area. If the shop meets State Farm’s guidelines for the job and it accepts the flat rate, it is awarded the work. "Every month in the past year, [our dealer network] has grown by almost 200 shops," he said.

Duncan bills State Farm directly for the glass, crating and freight charges. According to Mulanix, the assumption that Duncan charges the insurer a cut rate for the glass and shipping is "one of the fallacies I’ve been trying to overcome in my year-and-a-half sitting in this chair." He states, "We have one price list. We don’t adjust pricing for glass shops."

Addressing the Rumor Mill

Mulanix frequently hears the concerns of those in the industry who are skeptical of Duncan’s work with State Farm. Some worry that if Duncan is functioning as the negotiating authority for State Farm, selling the product whose price it negotiated with State Farm and influencing what shops get the installation jobs, the arrangement may constitute a conflict of interest.

"From an outside appearance I may ask the same question," says Mulanix. "However, we go out of our way to make sure we’re fair in giving jobs to independents and rotating [shops used] in a specific area." He adds that Duncan is regularly audited by State Farm to ensure this fair allocation of work. "If you think about it logically," he says, "we need independent glass shops all over the country as well as we need network glass shops."

Another group Mulanix has learned that his company needs is his competitors—other distributors of RV glass. Until recently, Duncan refused to sell its glass to other auto glass distributors, despite the fact that the practice is common among suppliers in the industry.

"It was probably a mistake to do that," admits Mulanix. "[Competitors] found other ways of getting our windshields from other glass shops they do business with." In September the company opened its door to allow suppliers to purchase directly from Duncan.

Duncan and State Farm’s classification of van conversion glass jobs as RV glass jobs, despite assertions by the Recreation Vehicle Industry Association and officials within the van conversion industry that the two are different, is another industry concern. "In my opinion, insurance companies look at conversion vans, because of their configuration, as RVs," he responds. "To rely upon [the insurer’s agent who handles incoming claims] to discern between an auto, an RV, conversion van glass or a camper top is just about . . . impossible." Instead he says, "they look [the job] up under a manufacturers’ guideline list, and if it falls within a certain realm, that business is passed onto Duncan Systems." Classifications aside, the bottom line is simple to Mulanix: "We’re in business to help the insurance industry and help them do their work," he said.

There has even been speculation that Duncan and State Farm are including buses in the RV category. Mulanix says that although his company does handle glass for transit and school buses, "typically we sell direct to fleet operators or the end-user." He adds, "[Such work] would be microscopic in [State Farm’s] total mix. The reality is that it just doesn’t even come up on our radar screen."

The latest rumor is that the State Farm/Duncan agreement is nearing an end due to complaints from policyholders and the AGR shops who have coined a new phrase for problem dealings with the distributor: they say they got a "Duncan Deal."

"That [rumor] couldn’t be further from the truth," says Mulanix. "We have and maintain daily [with State Farm] one of the better relationships that I’ve ever had with a customer.

Mulanix also took the opportunity to respond to those who question whether arrangements like the one Duncan has with State Farm are good for the AGR industry. "Duncan Systems really has nothing to do with the profitability of [the independents’] shops." He adds, "It’s a free market enterprise. We don’t expect everybody to like the agreement that State Farm has with the shops . . . We’re in business like they are to make a profit.

Regina R. Johnson is the editor of USGlass magazine.


Copyright 1998 Key Communications, Inc. All rights reserved. No reproduction of any type without expressed written permission.