As you know Progressive raised there discounts a few month back. Instead of cutting them off we decide to experiment with a co-pay.

In June, July and August we averaged 15 jobs a month with Progressive. We started collecting copay in September. Our average jobs have gone down to 14 per month. The good news is that we collected an average of $30.00 per claim from the customer up front. We used there last discounts and charged the customer the difference.

What we have found is if you explain to the customer that the insurance company is not willing to pay enough, in most cases they will pay extra money. Please remember that the key is to give the customer the choice when you are booking the job. If the co-pay is too high negotiate a lower one on the spot.

As of January 1 we have collected over $1,600 from the customer before the work was done. I believe that everyone is so use to paying a co-pay to there doctor and that it really doesn't affect them in the way a small claims court filing will.

This may not be the answer to the fighting the networks head on but it seems to be working without offending anyone. We are thinking about trying it with the Hartford next.

If anyone else decides to try it please post your results.

I like the concept.
I'm not sure of the legalities of the practice.
Opinons & any pertinent facts would be appreciated.

I ran it by an attorney and was told that it is an acceptable practice. The medical field has done it for years. But, you must be upfront with the customer and collect the fees at the time of install.

Maybe someone can get Chuck Lloyd, NGA, or the IGA's opinion on this too?

Awesome idea! This may be the time to think seriously about something like this! SGC cannot do every job in America

Be careful and check your contract, some of them from the networks say you cannot collect more than the deductable

That means you can't collect LESS than or waive the deductible and pass on the balance to the insurance company. You can charge the customer anything you want if they agree to it. The proof is the $1600.00 collected that way. Administrative expense I'd call it.

Is it worth a try on a global level? What do we have to lose?

Drglass,
We don't have a contract. When we elected not to honor the discount the contract became null and void. We get the same amount of volume regardless. Proof positive the TPA's give you nothing.

When the customer comes in or calls we conference them in and tell them the copay amount. We get the referral number from SGC and do the job.

For the record we are multiple store company and it works fine.

I don't understand though how you can call it a "Co-Pay"?? When I go to the doctor or get a prescription filled out, I pay a co-pay of say $10.00. This is like a deductible that the insurance company makes me pay as it is taken off the bill that goes to the insurance company. Then I must pay an actual deductible too.
Please don't get me wrong! I do like the concept of having the vehicle owner pay for services the insurance company will not pay appropriately for! Most doctor's and dentist offices are doing just that. They have these forms you must sign prior to them perfoming any services. Then the insurance will pay them and you get a bill for the remaining balance (even after your copay and deductible were paid).
Our industry needs to start doing this as well. We need to create our own contracts for the TPA's to sign!!

Glass Woman

Call it what you want and actully we don't call it that to the customer. We just tell them Progressive will not cover all the costs.

I believe SB's idea is sound. We have been doing something similar for some time.

The only snag should be if the shop advises the insured of coverage amounts, limits of liability, ect ect concerning their policy. THe shop is NOT a liscensed adjuster or a liscensed insurance professional. Don't make that mistake.

In that regard, Farmers for instance, telling us by fax that we MUST advise their insureds before beginning work...yada yada....is by their words requiring us to committ an illegal practice. Of course, we don't.

Let them tell the customer what they will pay, just don't let them control the call, insist you are in the threeway with the customer, as always. Let the TPA explain what the insurer will pay, then make them elaborate on exactly what that amount is based on.

Works nearly every time.

This is a great topic and worthy of continued discussion. I truly believe that many of the administrative functions performed by the shops are based upon faulty logic.

The faulty logic begins with insurance and network propaganda that somehow gets imbedded into our unconscious minds, almost like a commercial on television, and then it ends up in our work flow.

Mark1 just gave a perfect example with regard to performing the functions of a licensed insurance adjustor.

The idea of co-pay is long overdue because there is little if any profit adhering to network pricing that is dictated by a competitor that enjoys the multiple advantages of size, strength, and steering. It make far more sense to arrive at a dollar amount (like your dentist) that you charge to compensate your company for the escalating and numerous costs that are overlooked or outright ignored by those that impose restrictions of price.

All we would need is one big player to do something like this and I bet we could start to see a shift in momentum.

I believe SGC or any other TPA does not refer us as much work as we all think. A big regional or national player is going to get a large amount of business just by there market share, referrals or yellow pages and no one glass company will be able to do all the business out there.

When we purchase prescriptions we contribute to the cost, so what's the difference? As Bob Steben's said maybe the burden should be on the customer, not us.

We need to try something new because the current situation is not working!

Mark,

We don't tell them anything about the coverage. We simply tell the customer that Progressive does not pay enough for us to do the job. So if you would like us to do a better, safer install it will be an extra $43.00 (whatever).In all cases the customer has agreed to pay.

I hear a lot of people taking about quality or safety, convenience and that is what we explain to them. This really does work and we don't have to fight big brother. We also don't have to turn away work or ask the customer to pay the full bill. It is more affordable for some one to come up with $10, $20, $30 or $40 then to come up with $300.

People try it once and post your results. Sorry I know I am getting a little passionate on this one.

Agreed, SB. Didn't mean to point a finger at you; was only trying to point out the only potential pitfall I have been able to think of with that approach for the benefit of others thinking of implementing it. I believe that we share a common 'system' on your co-pay idea.

Consumers are usually miffed when they find out that their insurer isn't going to pay the full price. They're more miffed when they find out that their policy isn't going to cover quality parts. Still more miffed when they can't find it in the policy where it says that's all that's covered. Even more miffed when they find that the insurer guarantees that their preferred provider is going to do a good job, but won't put it in writing.

Some consumers don't care, and don't want to learn, but on the average, the vast majority of consumers are savvy people that understand the basic concept of value for the dollar.

It always comes back to that. THe difference is, when they bought the cheaper insurance, they weren't TOLD WHY it was cheaper. When they DIDN'T buy the cheaper insurance, and this happens, well, that's when they're really really miffed.

The Mayor was in the other day, and went through this exact scenario. He'll be writing some letters and personally accompanying us to the next legislative sessions. He was/is NOT a happy camper with Hal's chosen ones. He understood that though insurers say the current system is just like an HMO, that he didn't BUY an HMO policy. It will be interesting to see if they short pay below what they said they would pay, as has happened so many times in the past.

Hmmmmmm....? So let me make sure I understand this concept, If an insured has a 100.00 deductible,you are suggesting that we now collect 143.00? or whatever amount it happens to work out to? Im just trying to figure how we are ever gonna collect more than their deductible? Thats gonna be a tough one??
It sounds like a great idea,I know in the medical field I always pay well beyond my deductible,but glass I believe will be a bit tougher,We are still gonna have shops (and lots of them) that will simply collect the 100.00 deductible (or 250.00 or whatever amount) and feel very satisfied. (y im not sure)

Mark1 Very well said and good luck with the mayor


GlassGuy, Bingo it's that simple! try it and you will see.

INSURERS INCREASE PROFITS TO RECORD LEVELS BY OVERPRICING POLICIES AND SHIFTING COSTS TO CONSUMERS AND TAXPAYERS

Another idea would be like the medical field...let the insurance companies have their "maximum allowable charge" and bill the customer for the rest. Make deductibles a thing of the past. Insurance company would dictate that they would pay a certain percentage of NAGS, Labor and Kit and the consumer would be responsible for whatever the difference is.

GREAT POST SB!

This type of thread is what makes a formum such as this beneficial!

VERY GOOD strategy!

THANKS!

The biggest single issue I think ALL of us in this industry MUST fight to change, is the mentality that we have to "compete" with the shops "giving" away their work. I am not saying that is an easy thing to do by any means, we fight this mentality here in our shop at times as well.

But the day that the "$100 guy" looks around and realizes all of his competitors are making $300 a job and he is cheating himself out of $200 a job, will be a great day. Presently we all seem to think we have to compete with "$100 guy" or SGC whom we KNOW is losing money and yet we still do it.

Until enough of us turn this mentality around with higher cash prices, standing up for what we are truly worth, and educating insureds as to what is REALLY taking place (insurers covering less in order to sell cheaper insurance), pricing will continue to erode further and further until the smartest and brightest leave this industry to move on to profitable industries.

Once again, we may be our OWN worst enemies by ALLOWING most of this to have taken place.

I don't believe that we need to leave this industry nor do we have to worry about the one hundred dollar shops. If you want to compete with those shops go ahead. In fact, we compete with them all the time.

This is the beauty of the copay. Historically, the customer that has insurance doesn’t care about the cost of the glass (regardless if it is higher or lower). YOUR customer is calling YOU because of YOUR service and quality! If that person is on the line it’s YOURS to lose. How many of you have medical insurance and have paid over the deductible to go to the doctor of YOUR choice? It’s the same concept; people love their cars so what's a couple of extra bucks to have piece of mind?

SGC, LYNX or any other network is a hired gun! Their purposes is to intimidated and control our industry and they do it well. Otherwise all these insurance companies would bring it in house. You don’t think the top ten major insurance companies have a call center? They do, they just can’t bully us as good as the TPA’s.

Remember SGC is not going to feed your shop; they have their own mouths to feed. What they are going to do is strong arm you into accepting what SGC (yes, your competition) feels you deserve. Want proof, for years I have heard from LYNX, SGC and all other networks that they don’t set the price but only enforce it. That’s funny, just the other day HAL announced that SGC told him to pay less for urethane. And lets not forget the faxes that all come with in hours of each other.

In my opinion, we are all competitive that’s why we are called independents. The TPA’s know this and have made millions on all of us because of it. But this is not about fighting for the $100 job. It’s about YOUR customers paying a little extra for YOUR services.

UPDATE 1-"Auto Insurer Progressive's Profit Rises 42 Percent"........ Oh, an by the way your new discount is 69% off