I ran into this link today. As I was reading, I noticed on the right side of the screen some links to other glass shop. One of them is advertising they waive up to $250 of the insureds deductible. It just happens to be illegal in the state of Washington. How can they get away with this?
http://www.theautochannel.com/news/2002/10/01/148323.html

UNFORTUNEATELY THE WORLD IS PRICE ORIENTED. PEOPLE SHOULD WORRY MORE ABOUT QUALITY WORK AND QUALITY PRODUCTS. ITS A SHAME PEOPLE ARE NOT MORE EDUCATED IN OUR INDUSTRY

They get away with it because few states enforce the deductible payment issue, or rebating, or whatever you want to call it.

As one State Attorney General recently stated, he simply isn't going to do anything about it without consumer complaints, he has bigger fish to fry and spend his budget on. He also knows the ins. co. are dictating their own pricing for the most part, and insurance companies simply short check the invoice if that deductible is "added into the invoce" or the invoice is "billed at rates higher than their price", so he sees no harm to the consumer. Funny thing is, he annually faxes letters to locally owned glass shops re-quoting the law, so go figure? Politicians!

This could also be one reason Mr. Bischoff put not paying, waiving, and rebating deductible language right into the newest State Farm O&A. He knows as well, that states do not enforce the laws.

I think Washington state has enforced it however. I believe they shut down a company called Olympic Glass for much the same thing in early 2000. I think Olympic was just sloppy in the way they paid the deductible, and ceased to find a "better way" to accomplish it, just my guess.

You probably have Cascade Glass in Washington as well and they have done this since before the laws were in place and continue to "rebate" deductibles to this day. At least they require payment of the deductible, and simply mail out "rebates" once a month, from my latest information. I think that makes it harder to prove wrong doing. They are collecting the deductible and argue they are simply giving up some of their profit as a rebate to their customers. Which is great and I am all for a business being able to do what they want with their profits. However, as I have posted before they have already LOST a lawsuit with Farm Bureau trying to recover "short pays" that averaged $170 an invoice, if I recall correctly, while advertising they pay up to $150 off the deductible. And I believe they have recently filed a lawsuit agaisnt Farmers as well.

I am not picking on Cascade at least they have the guts to take control and try to do what they need to in order to make a profit and keep customers coming back. As long as they are not "charging" the ins. co. for the deductible they are not collecting I see no problem with a rebate program. But I am no lawyer of course.

The frustrating part is when a state law is in place, and is unenforced by the state but locally owned shops are reminded to NOT pay deductibles while their out-of-state competition is allowed to "do as they will" the law needs to be changed, enforced, or done away with to allow for a level playing field. The fact that a state would "tie the hands" of locally owned glass shops while allowing their out-of-state competitors to "pay deductibles" does not see like smart politics to me.

If a company is waiving ded's, and is not over-charging the ins. company, then why is that illegal? If they want to eat whatever amount that happens to be, then let them.

Yeah. I've always wondered about that too. The deductible is going to get paid to the insurance company one way or another - whether the customer or the shop pays it. I can't imagine one of you guys calling Hal and saying "hey Hal, your customer here has a $500 deductible on their policy but we told them they don't have to pay it."

I agree d-boy !!! The problem is, and this has been both heard and reported, that when an insurance company sees "waive up to $150" they assume glass shops are making such a large profit margin (or at least claim) they can give $150 back on every windshield. Which we know is not true, most common windshields far less is given as a rebate, not the $150 advertised. So then, like WALMART, the ins. co. want that rebate NOW, UPFRONT, and squeeze glass shops even further and use this to agrue to legislators that glass companies are doing just fine because they are able to "pay" deductibles.

So it is not the ethical part that bothers me, but how it is used against other glass shops, and also those companies paying deductibles as well. We here customers that do stop and think about how they can pay $150 of their deductible when other glass shops quoted them on avg. $300 for the entire job.

Hope you can see the point? I am not here to judge anyone nor would I. Ever business makes their own decisions. Someone started this thread and I was merely offering an opinion some related data so she could do her own follow-up research on it.

Have a great day everyone

Insurance company figures "they gotta pay, so does the insured" playground politics. What needs to happen is Insurance needs to be federally regulated across the board, and not different in every state. They write their own policies, rules, regulations, no one is policing them that's how they get away with so many "Bad Faith Practices", as well as telling us what we can charge for our products. "If we want to work for them". All that and the giant lobbys they have working for them, just to be sure nothing ever changes, unless it's in their favor.

CCC I like to read your comments and they are very informative! Thank you
One of the main reasons Washington state created this law is due to the fact that the agents would steer work to the shop that waive/rebate. The customer's pay the glass shops the deductible. It is the glass shop that take the loss on profit. Years ago when there was a thing as profit, it helped to get the jobs in the door. Now most glass shops are letting the jobs go if the customer insists on not paying their deductible.
Yes there were several companies that were shut down for waiving. There was one that won the lawsuit but they are no longer in business. It's all in the wording. From what I remember you are not allowed to use the words "waive" or "rebate".

WEBMASTER,
I think you might be misunderstanding the dedutible thing from reading your post.
If the insurance comapny says they will pay 254.50 for the job according to thier current O&A and the customer's policy has a 250.00 deductible written into it then that means that the insurance company is going to pay 4.50 to the shop and the shop is supposed to collect the 250.00 from the insured as the remaining payment for the job.
So if the shop waives 250.00 then they just got paid 4.50 for the job total. If the shop waives 50.00 then they got paid 204.50(4.50 from insurance & 200.00 from the customer), etc.

I believe the issue of deductible waiving being illegal stems from when shops would simply inflate the invoice they submitted to the insurance company to make up for the any deductible amount that they did not make the customer pay them. This basically defeated the insurance companies premium reductions for higher deductibles because they were still footing more of the bill and the customer was still not having to pay the deductilbe they selected to save premiums.
SO thanks to those business practices we now have networks, O&A pricing, and national contracts with companies like Safelite.

Now with preestablished pricing from insurance companies, technically deductible waiving is hard to enforce as being illegal because the insurance company is saying they will pay X amount of dollars less the insureds deductible and if they shop is willing to do the work for that amount they are not inflating the invoice price like before so it is not insurance fraud.
NOW the real issue. We all compain about price, but the way the insurance companies see it is if a shop can waive a customers deductible then they are still being overpaid. Otherwise shops would not discount the total invoice amount they are getting. SO HENCE deeper discounts.

WE as a company do not waive deductables i never have... But i almost bought a company that did, it depends on what state your in. If you look at cascades web site i think there is some towns there offer is not valid in..

The Ins. Ded. ALWAYS stands. Any additional replacement discounts are to the Ins. Co. not the insured.
Ex. If you do a w/s & charge the Ins. co. $150.00 for a person who has full glass you get a check for $150.00 (full payment) from the Ins. Co.
If the person has $50.00 Ded. and you waive the Ded. your full price is now $100.00 not $150.00.
The Ins. Co. is again paying the full cost. If the complete cost is now $100.00 the Ins. Co. pays $50.00 & the insured pays $50.00.
You are inflating the Ins. Co. cost for the people who have full coverage to cover the loss of not collecting the Ded.
Still illegal....Any questions?

SGlass , there are some really weird laws regarding this i suggest you do a google search on deuctable waiving + sc , south carolina has some really odd laws regarding this, and kick backs, apparently this was spearheaded by farm burea insurance, who i personally think is a bad company as far as being a policy holder..

yep cascade pays there contract shops quick :)

i love cascade

Most insurance companies hate that deductibles are waived because the customer now has an affordable way to have a broken windshield replaced. The insurance companies have slowly converted $0 deductibles into $250.00 or higher. This was not by accident, but a way to sell comprehensive insurance and rarely have to pay a claim on one of thier products. the customer in most cases does not understand they can have an affordable deductible for pennies a day. I always point this out to the insured, and reccomend they get a qoute from thier agent and compare what thier windshield cost is versus a lower deductible.

We have made this recomendation for years, and have seen a lot of happy customers return later with a loss and happy they paid the additional cost.

OMG - So an insured comes into your shop gets a quote then adds the proper coverage. Isn't that pre-existing damage? And you think that waiving a deductible is illegal!

I think OMG was meaning that when they are looking at getting a newer vehicle they come in and see what the windshield would cost if replaced. That way they can be better informed and help in their selection of a deductible, much like most insurance companies know what cars have more or less expensive parts, if the windshield is $600 and on a vehicle that is prone to more damage (like Subaru, Audi, Volkswagen),they may or may not want a higher deductible.

I think it sounds like a good idea.

Sglass - so you are saying you do not think it is fraud to INFLATE the cost of a product to the Ins. Co. when you are billing for a $0 deductible policyholder, when you sell that exact same product for less to a $100 deductible policyholder?? Isn't that like charging a member of a one minority more to pay for all the deals you give other minorities??

Still sounds like fraud to me. Thank you for alerting the Ins. Co. to this "method" however. Now they can make sure we are all charging the same amount for each part number, which will be hard to do because every ins. co. has a different price, along with fleets, and cash pricing.

Of course, knowing that ins. co. seem to only AUDIT 10% of non-network invoices, I would doubt they would have ever realized you were charging them more for some DW01341GBY than you do for others. Well, not until now that is

I don't believe that. Customers hardly have the time to replace a broken windshield let alone check for prices on a windshield that's not broken.

Really? We get customers stopping by here asking for just that, or at least calling saying they are looking at a new car and wonder what it costs to replace the windshield. Not every customer of course.

CCC- I think you misunderstood what Sglass was trying to say!

Yes CCC you misunderstand my reply. The Ded. should ALWAYS be collected. No if ands or buts.

This thread is starting to remind me of a post from a few months ago. I started a post saying that ins co's will, over time, raise ded's for and/or eliminate ins coverage for most w/s and glass coverage. I think within 10-15 years, the majority of all w/s jobs will be on a strictly cash basis.

I believe it is a state by state issue. Do not assume just because others are doing it in your state that it is ok. It is best not to do it unless you are sure of your state laws.

The angle here that no one has mentioned so far is the interference angle.

I agree with Sglass' logic. The amount of loss is what the insurer is contracted to pay, LESS THE DEDUCTIBLE, therefore, if the deductible is waived, the loss is lower. I had never looked at it from that standpoint before, but Sglass is correct. What interests me is, why the insurers haven't pushed it from that standpoint. (to my knowledge, that is)

What hasn't been mentioned here, is the 'interference in the insurance contract' angle.

If you waive an insured's deductible, insurer's say, you are interfereing in a contract of insurance between the insurer and the insured, in that the contract states "Less any applicable deductible". If decuctibles are waived or refunded, the insurer's loss ratios rise because there is a higher probabability that the insured will file a claim. The insurer didn't calculate that into their price for the contract of insurance, therefore, interference in the contract.

They never push that issue, though it has been brought up, but rather insurers 'slide' the coupons for deductible waiving across the table to legislators and regulators every time they are accused of lowballing claims, to show that shops 'must be overcharging' if they can 'eat' the deductible. Of course we know that isn't happening, and the insured is the one that really suffers with either an inflated bill to cover the deductible, or cheap materials and labor to account for the deductible.

Next time this happens, I will quickly refute that with Sglass' logic.

Thanks Sglass! A very useful point!

One footnote to consider: Terry Barnes, I believe, beat the "no kickback" law in ND that the state passed with the defense that he has the right to spend marketing dollars as he sees fit for his business. Whether marketing dollars were spent on newspaper, TV, radio, ect ect, OR coupons, was the choice of the business. Again, in that case, the contractural interference issue was not raised, if I recall correctly.

Personally, I believe that deductible waiving just plain looks bad, and so do 'giveaways', but 'giveaways' are another subject entirely. It's been shown that many times the shop isn't giving away anthing: steaks and dinners for a year ect were many times not funded by the shop, but rather the restaurant that was doing the dinners/steaks. In fact, one restaurant in Denver went under trying to bring in new customers with that tactic a few years back.

The point is, many different busniesses 'network' with each other in their community with this premise, to 'mutually' market their customers.

I know a local dealership gives away coupons for a local carwash, while the carwash gives coupons for the dealership on service jobs. I've seen it done with as many as a couple dozen participating businesses with 'books' of coupons given to consumers. Mutual backscratching marketing, no 'harm' done to the insurer in that scenario.

Ok, that's enough, back to the books.

I guess the reason I am confused about SGlass comments were the following statement:

"You are inflating the Ins. Co. cost for the people who have full coverage to cover the loss of not collecting the Ded."

I was not saying he was not collecting the deductible, I was understanding him to say he is charging more to the insurance when a customer has a $0 deductible.

Am I still confused???

Mark1, we have raised and explained this issue or "interference" to agents, customers, and the attorney general. The simplest way to explain it seems to be that when you "waive or rebate" you are now becoming a 3rd party to a 2 party contract. Is that how you see it?

How about this scenario:
Anyone who is waving Ded. Should be charged back $50.00 for every insurance replacement they did for a person who had FULL coverage.
Because all those people’s glass replacements were inflated $50.00

Well, I guess the insurance company should pay the bill and collect their own DANG deductible. Maybe thats why they keep their mouth shut.

-SGlass You are saying that is one way they can afford to pay deductibles by charging more for $0 claims and direct billing??? If that is what you meant I agree. I think some do "inflate" certain claims to recover the lost revenue on deductibles waived.

I also think Mark1 mentioned they use inferior products, or fail to use certain products that are needed in order to restore the vehicle to pre-loss condition (sorry but cutting the moulding off and stuffing the top piece of it back in the trim groove does NOT restore it to pre-loss condition in my book). And how many "other shops" replace acoustic barriers, clips that may have broken, etc.?

I still believe the ONLY way to stop this landslide is to EDUCATE the consumer. Tell them about DOT#'s, branding, OEM vs. generic glass (there is a place and reason for both to exist), ins. co. pricing and how the ins. co has saved 60% since 1999 yet there premium hasn't gone down in that time, and mopst importantly, how they can become better and safer consumers when they need windshield services by shopping VALUE not price and DEMANDING the service they are entitled to under the terms of their insurance policy.

then you just have to hope you are not in one of the thrity-some states, the farm has seen fit to write oem parts out of their policies. ha ha.

i am not quite sure how anyone billing thru the network can inflate a bill, unless they are adding an additional piece of glass to the bill.

OMG not sure..

Good point Joe on TPA's auditing and making it difficult to overbill. We have even submitted bills for LESS than "their price" and they still pay us the higher O&A price. Go Figure.

Our owner told me that at the AGRSS conv. the IGA was giving a presentation on their new website for autoglass company locator. They pulled up Michigan area page, I believe, and when the page popped up there were adds for "paying deductibles" all over it. This happened with Bob Bischoff and others there.

I am sure that went over really well. Not sure if Michigan has a "deductible" law or not, but I can't imagine it looked good in any case.

Did anyone else see this presentation?

Great...Just Great.
If I was an Ins. Co, I would go back to main office and chop off NAGS the % that equates to all my client's Ded. for all glass replacements.

SOME COMPANIES ADVERTISE IT TO GET BUSINESS, LIKE SOMEONE SAID, IT'S SAVING MONEY THAT EVERYONE WANTS. THEY DON'T SEEM TO CARE ABOUT SAFETY. IE: EDUCATION

Yes Bill, we understand the concept behind advertising. Advertising that you will save a ded. is illegal. In some state where it is not illegal just means you are charging Ins. Co. more for full coverage clients then clients with Ded.

WE HAVE A COMPANY HERE THAT ADVERTISES NO DED. (TEXAS)
TO GET CUSTOMERS IN, THEIR INSTALLS ARE LESS THAN DESIRABLE. THE COMPANY I WORK FOR DOES NOT AND WILL WAIVE OR ADVERTISE TO WAIVE DED.

CORRECTION; DOES AND WILL NOT WAIVE OR ADVERTISE TO WAIVE