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Auto Glass Claims - Is it Steering? The truth within!
After learning that Safelite Solutions recently acquired Allstate Insurance and will administer their auto glass claims effective January of 2012 I figured it was time to share my perspective on the issue of “Steering”. The issues in this article are based on both facts and opinions. I encourage you to form your own opinion based on articles like this and what you have already learned about the processing of auto glass claims. It is intended for those who are interested in views regarding independent glass shops decline in sales due to Safelite Solutions stronghold in the handling of insurance claims. Recently the National Association of Insurance Commissioners published a report in AGRR Magazine stating that Safelite Solutions is now handling the auto glass insurance claims for 14 of the top 20 Insurance groups in the United States. They also process about 70% of all Insurance Carriers glass claims. Safelite Solutions not only processes these claims, but they own glass repair and replacement facilities (usually Safelite Auto Glass) in your area.
For years, Independent glass shops including my own have been concerned and speaking out about the so called “unfair practices” of Safelite Solutions or also known as the Safelite Glass Network (from here forward to be referred to as SGN). “Steering” has been the number one issue brought up by most shops. I have read numerous articles, lawsuits, legislative sessions, etc. about how SGN is steering jobs away from independent shops. I have also been approached by IGA (Independent Glass Association) members to assist in the legal fight against “Steering”. Many shops have closed their doors over the years, in large because of SGN’s so called “monopoly” in the auto glass claims business. While I agree that SGN does steer some jobs away from independent glass facilities, I do not think that “Steering” is the main problem or the term I would use for SGN.
The problem I have with the whole “Steering” issue is that it implicates that SGN is not allowing the insured to choose an independent shop to do the work. It makes it sound as if SGN is telling consumers that they will only send a Safelite owned facility out to do the work. I know there are cases in which this is happening and I have had my own customers tell me that SGN advised them not to use my shop. It really depends on SGN’s verbiage when talking with the insured. My argument, however, seems to be one that is rarely discussed. In my experience with the SGN and based on discussions with my clientele, the following topics are the “Real Issue” with SGN.
The problem with SGN starts with the insured being forced to call a telephone number that they “assume” is their insurance company. The claims telephone number to their “insurance company” (a.k.a. SGN),is usually right on their insurance card or given to them by their local insurance agent’s office (who also may be unaware how the claims process really works). Unfortunately, this call does not connect you to your insurance company! For Glass claims, it connects you to SGN. When you call this 1-800 claims number on your insurance card, it may be your first time making a glass claim or it may have been a while since you last filed a claim. At the beginning of the call there is a brief automated recording that states that “SGN is financially affiliated with Safelite Auto Glass”.
Most people don’t understand what this statement implies, or what the outcome of their claim will be if they don’t request the Glass shop of their choice.
I am confident with my business stature in my area and have solid relationships with most of the insurance agents. I also service many area businesses, fleets, and I’m competitively priced with the general cash paying customer. Our reputation and customer service is second to none. With that said, at one time or another, the majority of independent shops including mine have mentioned the following statement. ” Unless an insured asked for my shop by name, I don’t remember the last time that SGN actually called my shop with a glass claim referral”. That statement is the most factual comment you will read in this article. I personally challenge SGN to prove to me otherwise. I have experienced first-hand that independent shops like ours, will only get referrals from SGN if the insured lives way out in a rural area OR the profit margin for the job is very slim. This is where the problem escalates.
Under the current claims procedures, when an insured calls into SGN, they MUST request the shop they want to work on their vehicle by name. If they don’t ask for the shop by name, they are automatically referred to a Safelite owned repair facility. They are not given a choice, nor will SGN select or offer another qualified shop in your area. In my mind, this is not “Steering”. This is simply capitalizing on an unfair business practice and not providing a real choice to the consumer. SGN is supposed to be a non-biased 3rd party administrator and offer a choice to the caller. If SGN does not mention the names of any shops to choose from, it most definitely is biased by only sending the claim to their own facilities when an insured doesn’t ask for one by name. Out of 5 reliable auto glass shops in my area, my percentage of referrals from SGN (where the insured did not ask for me by name) is less than 1 percent. The other 3 independent glass shops are less than 1 percent too. This alone is proof that SGN is directing over 90 percent of the glass claims to Safelite Auto Glass/Auto Glass Center. They are biased and have complete control of where claims are referred to within the auto glass claims industry. They know this. We know this. And the insurance carriers know this. Why SGN is not held accountable to offer a “real choice” is beyond my legal knowledge. If SGN truly claims to be a non-biased administrator, they would be required to offer the consumer a choice of repair shops By Name. Currently, all SGN representatives have to do is ask the insured if they have a choice. Asking the consumer if they have a choice, is not offering a choice.
Safelite CEO Tom Feeney claims that they “HONOR” a choice to all the insured’s calling into their call centers. But they don’t really “OFFER” a choice to “HONOR”. They only “ASK” if you have a choice. If the insured doesn’t ask for a specific shop, SGN has nothing to honor! That’s quite “Noble” of them. I don’t have a major in ethics but, How can you say you “HONOR” something if you don’t “OFFER” it first? HONORING, ASKING, and OFFERING have 3 very different definitions.
To ask- To call for an answer or to seek information
To Offer- to put forward a proposal for consideration of acceptance or rejection
To Honor- To live up to or fulfill the terms of an offer
The solution to the problem is that SGN should be required to offer a choice of 2-3 shops. Give the consumer a “True Choice”, not just be required to ask the caller if they have a shop in mind. People don’t always remember the exact names of the local glass shops because they are not their weekly stop and shop. SGN representatives can say what they want, but we have assisted the insured while calling in claims to SGN, and when the insured specifically asks for our shop, SGN has told them they cannot locate our shop in the list of preferred shops. Our shop has been on contract with SGN since their inception. There is no excuse why our shop is conveniently lost from time to time in their database. The second most factual statement you will read in this article is as follows: If SGN mentioned our glass shop’s name, their name (Safelite), and one other local shop’s name in our area, there is no doubt that our referrals would grow substantially. SGN does not want to do this because they have so much money invested in handling the claims. I would even challenge SGN to ask the insured if they could send Safelite to do the work. With Safelite’s reputation in our area, I am confident the insured would ask if there was another “CHOICE” they could have.
If Safelite is so confident in their company, Retail/Service shops, their policies, and quality of products and services, why don’t they put their Brand name against ours fairly from the minute the insured calls in a claim? I think it’s unethical and illegal and should be dealt with once and for all! But how? I’m just an independent shop in a corporate world, like David vs. Goliath, so what harm can my shop do to them? SGN should be held accountable by the insurance carriers and the law to offer a real competitive choice. Until then, I'll continue to run an honest, competitive, customer service oriented business!
So let’s clear up the real “Steering” issue. “Steering” actually comes from the Insurance carriers, not SGN. The insurance carriers are “Steering” us to call a company that’s bottom line interest is to get people to use their auto glass repair and replacement facilities. SGN has just taken full advantage of the situation by spinning the “OFFERING A CHOICE” by using the phrase “HONORING A CUSTOMER CHOICE”! Let’s just hope that their unfair insurance network domination and questionable ethics come full circle and take them down before they rule the world.
This article can be substantiated if the Government and or Insurance Carriers and Commissioners required:
A. SGN to provide documentation to all shops that are on contract with SGN stating the percentage of claims that were dispatched to each shop. This document should include the number of claims sent to their own shops where the insured did and did not ask for a specific shop by name.
B. SGN to offer a list of 2-3 shop names when an insured doesn’t specifically ask for a shop by name. The shop names should be alternated on a fair rotation to allow the same competitive advantage. This process should be monitored and documented as well.
C. The insurance carriers and commissioners to allow their local agents to assist in offering names of reputable network affiliated shops in their area. Ethical practices should be monitored to make sure gifts for referred claims sent to specific shops were strictly prohibited and faced severe legal ramifications if violated!
If changes are not made soon, the consumer will not have a choice of who works on their vehicle. They will be forced to go to Safelite Auto and Glass because….Well, I guess that’s the way it is already! I think you get my point. Let’s get this changed once and for all!
Brad Droste
President and General Manager
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