Posts Tagged be careful what you ask for

Just Sayin’ Blog – Wind at Our Backs?

As we near the end of the first three quarters of 2013, it appears that we may have some wind at our back. There has been some slight improvement in a couple of the key drivers of the automotive glass repair and replacement (AGRR) industry. The key drivers of the AGRR industry are weather, the economy and miles driven.

 

The Old Farmer’s Almanac has been published since 1792 and is “North America’s most popular reference guide and oldest continuously published periodical”. Forecasting the weather is a specialty of the Almanac and the publication touts an 80% success rate at correctly forecasting winter weather. The Almanac recently published the weather maps for 2013 – 2014. The Almanac is forecasting the following weather for regions they report for this coming winter:

  • The Northeast a winter milder in the North and colder in the South with slightly above average snow in the region;
  • In the Atlantic Corridor a colder winter with snowfall above normal;
  • The Appalachians will see a colder winter with snowfall near normal;
  • The Southeastern United States will see colder weather and above normal snowfall;
  • In the Lower Lakes temperatures will be slightly milder with below normal snowfall;
  • In the Ohio Valley area winter will be colder, along with below normal snowfalls;
  • The Upper Mid-West will be a mixed bag with a warmer winter in the eastern part and below normal in the western part of the area. Snowfall will be above normal;
  • The Heartland will be colder than normal this winter and snowfall near normal;
  • The rest of the country is expected to be colder than normal with average to above average snowfall;

All-in-all a mixed bag with the weather and I hope that wherever your business is located you’re benefited by a colder and snowier winter.

The economy is also a bit of a mixed bag. Positive news came from new car sales which can be an important factor in an improving AGRR industry. J.D. Powers detailed year-on-year improvement in new-vehicle sales in the United States by reporting in their August 2013: Monthly Automotive Sales Forecast that “August new-vehicle sales reached the highest level in seven years.” The report went on to state, “New-vehicle retail sales in August 2013 are projected to come in at 1,270,400 units, 12 percent increase from 2012”. That’s great news for the AGRR industry. J.D. Powers is predicting growing new-vehicle sales for the remainder of 2013 and well into 2014. Really great news for the AGRR industry!

CNNMoney reported this past week in an article titled, “Jobless claims fall to 7-year low, but…” the rate of unemployment showed signs of dropping which is great news, but is tempered with the suggestion that it’s a result of people continuing to drop out of the work force. There are “11.3 million Americans who remain unemployed” the article reported with “three unemployed people for every job opening”. As with the weather, unemployment figures vary by region so its how your local economy is doing is what could affect how good your business will be in the next year.

The price of oil and how oil prices effect gasoline prices is another key part of the equation for the AGRR industry. As reported by the United States Energy Information Administration in the “Gasoline and Diesel Fuel Update”, prices year-on-year through September 9, 2013 on regular gasoline show that prices are down $ 0.26. Lower gasoline prices are great for both the consumers we rely on for business and for all of those company vehicles providing mobile service. Hopefully the price of gasoline will stay low.

You can look at reports from the U.S. Department of Transportation – Federal Highway Administration (FHA) as positive or negative depending where you reside. The FHA showed in its June 2013 Travel Monitoring and Traffic Volume Report that year-on-year miles driven were relatively unchanged with a slight decline of 0.1% from June 2012. The news that miles driven is not showing growth wasn’t great news for the AGRR industry that thrives on vehicles out driving on roads, but staying level was better news than a drop.

So how are these three key drivers affecting your business and do you think the wind is at your back? Regardless of whether the wind is at your back or not, I think there is a fourth key driver to your business and it is the most important one for finding success in your business. That key driver is you. So how are you going to take advantage of the marketplace you compete? What is it you’re doing to make your business stand out among all those with whom you compete?

I’ve written in previous blogs “The Times They Are (Always) A-Changing” and “The Times They Are (Always) A-Changing – Part II” about the opportunities in the marketplace for AGRR companies. I strongly believe that there are opportunities for independents in our industry, but you’ve got to surround yourself with the best people and make sure that they are all committed to the goals and aspirations that you have for your business. If you haven’t got that you’re going to be struggling.

What else are you doing to separate yourself from your competitors? Look for ways to be successful and be relevant in your market so that you stand out. There is a recipe for success in your market and you’ve got to figure out what it’s going to take to make sure you find and keep being successful. It starts with you as you’re the key driver of your business.

If the three key drivers are beginning to turn to your favor and with the possibility of the wind at our backs, what is it you’re going to do in the next year to see that you not only survive, but thrive in the AGRR industry? It’s really up to you.

Just sayin’.

, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

3 Comments

Just Sayin’ Blog – Auto Glass Repair & Replacement Industry Legislation in South Carolina ***UPDATED***

 

I have been following with great interest the legislative initiative that has been taking place over the last two years in South Carolina. HB 4042 is attempting to lay out the rules of engagement for all stakeholders (consumers, auto glass repair and replacement (AGRR) companies, third-party administrators (TPA) and insurers) of the AGRR industry in the state. Since HB 4042 was first introduced on April 6, 2011 in the South Carolina House and in the South Carolina Senate on May 24, 2011 the bill has gone through several versions. Now that the bill was passed in its final form by the General Assembly on June 6, 2012, it awaits Governor Nikki Haley’s signature to become law. If the governor signs the bill it will take effect on January 1, 2013.[1]  ***UPDATE*** On June 20, 2012 Governor Nikki Haley signed the bill into law.

The bill as passed is meant to:

TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 39-5-31 SO AS TO MAKE IT AN UNFAIR TRADE PRACTICE FOR A MOTOR VEHICLE GLASS REPAIR BUSINESS THAT ADMINISTERS INSURANCE CLAIMS FOR MOTOR VEHICLE GLASS REPAIRS TO HAVE AN INSURED’S GLASS REPAIR BUSINESS REFERRED TO ITSELF OR TO USE INFORMATION TO SOLICIT BUSINESS.

Legislation typically requires compromise to reach agreement for passage and to be signed into law. The final version of the bill that was passed by the House and Senate chambers of South Carolina last week does just that. When stakeholders attempt to “improve” and influence legislation to provide their constituents their desired goals that they hope the legislation will achieve, legislation is generally weakened from the original version that was presented. That too happened. Is this bill a win win for everyone?

When you read through the bill and try to determine the sum of the parts, it appears that everyone got a little something. If you were a consumer you probably didn’t take any notice of the fight over this bill, but consumers did receive rights and protections to choose the provider they want to use if they file an auto glass loss with their insurance company. When a loss occurs many insured’s are looking for a recommendation as to what AGRR company they should use when they need a glass repair or replacement. If you’re a consumer insured by a direct writer (an insurance company that solicits and services business directly with the public through its own employees rather than through local agents[2]) and you have a glass loss you’re probably going to be directed to the AGRR company recommended by the TPA, even if it results in the TPA’s related AGRR company doing the work. Another positive section of HB 4042 is that when an insured makes a call to their insurance company claims department 1-800 number to report an auto glass loss; and the phone is answered by a TPA, the TPA that answers that call on behalf of the insurer must immediately tell the insured that the TPA is acting on behalf of the insurance company.

If you’re an AGRR company operating in South Carolina you certainly did receive some relief in the bill as there are restrictions on a TPA’s ability to attempt to steer your customer on a 3-way conference call. The bill does come with some reasonable restrictions as to the business practices that AGRR companies must follow when a consumer files a glass damage claim when insured in South Carolina. The bill has a number of important sections that restrict how an AGRR company markets to consumers who have insurance coverage for an AGRR loss. Some of the restrictions will place limits on the sales and marketing methods used by some AGRR companies who compete in South Carolina.

In the bill insurers received new mechanisms to protect its insured’s from those who attempt to improperly influence claims and the bill imposes penalties for those that are found using improper methods as defined by the bill. There is also language in the bill giving insurers the ability to pay only what is “fair and reasonable” for an AGRR claim and insurance companies may inform its insured that the insured could be responsible for paying any cost of an AGRR loss over what the insurer feels is a “fair and reasonable” price. There are additional provisions in the bill that would appear to benefit insurers regarding how auto glass losses are billed in South Carolina. I’ve detailed all of the provisions at the bottom of this blog post. Time will tell whether the insurers are happy with the final version of the bill.

TPA’s may refer an insured with a glass loss to any company that is a member of the TPA’s approved shops (including its own AGRR company) if the insured does not have a provider of choice at the time they file the claim. The TPA can require an inspection of damaged glass prior to replacement, but the inspector cannot refer or attempt to influence who the insured chooses to use for the repair or replacement during the inspection. If the insurer or TPA does not own a ten percent or greater ownership interest in an AGRR company the provisions of the bill do not apply. As with the insurers, TPA’s have a number of new rules that they must follow in the handling of auto glass claims for insured’s in South Carolina. Some TPA’s will have issues with this bill while others may not. A June 4, 2012 article in glassBYTE’s quotes a senior corporate counsel for Safelite as saying,

“We are very pleased with the compromise reached in the South Carolina Senate on HB 4042. We are hopeful that the House will concur and that it will be signed by Governor Haley,” says Brian DiMasi, senior corporate counsel for the company. “In the end, all parties came to the table and worked very hard to address their respective concerns. Safelite has always honored customer choice, and this compromise not only preserves that choice, but protects consumers by addressing the rampant fraud in the vehicle glass industry in South Carolina.”    

While many may have an opposing view to Mr. DiMasi’s comment regarding Safelite having “always honored customer choice”, I was surprised by what he said at the end of his comment where he stated that the bill “protects consumers by addressing the rampant fraud in the vehicle glass industry in South Carolina.” Rampant? Really? The bill certainly offers fraud protection for South Carolinians, but when you look up rampant in the dictionary you’ll find definitions such as “profusely widespread”, an “absence of restraint” and “growing wildly: growing strongly and to a very large size, or spreading uncontrollably”.

Does fraud exist in the AGRR industry? Does fraud exist in South Carolina? Certainly instances of fraud are committed by some in the AGRR industry, but rampant? I think that Mr. DiMasi’s statement is a grossly unfair characterization of the vast majority of AGRR companies that attempt to fairly compete in South Carolina by providing consumers who need auto glass repairs or replacements with excellent AGRR services at “fair and reasonable” prices.

I’m sure that one or more stakeholders see something in South Carolina HB 4042 that turns the advantage their way. With the passing of this bill in South Carolina the battle lines are drawn and there is a panoply of those interested in what’s next. Next year could bring another attempt in South Carolina to gain further advantage for one or more of the stakeholders, but the success that some see with the passing of this bill will help embolden legislative efforts to curb the activities of one or another stakeholder in other states.

Depending upon which side of this debate you support, all should give thoughtful consideration what it is you want. As the saying goes, “Be careful what you ask for,..” as to be sure there are always winners and losers in legislation passed into law and it’s possible that “…you might just get it”, but then again you might not get the outcome you were looking for.

Just sayin’……

126

___________________________

Additional information on HB 4042:

In its final version the legislation provides little wins for all stakeholders.

1.    Consumers get in the bill (or law if and/or when its signed):

a.    When filing an AGRR claim through their insurance policy the opportunity to choose who they want to do their AGRR claim and they can’t be required to use a particular provider. Both the insurance company and the TPA are covered under this provision.[3]

b.    Insured’s must be informed by the TPA that it is acting on behalf of the insurer and that the insured is not taking directly to their insurance company.[4]

c.    Once the insurer or TPA verifies coverage, both must find out if the insured has a preferred provider of choice for their AGRR claim.[5]

d.   If the insured’s provider of choice IS an approved vendor for the insurance company or TPA, the insurer or TPA must assign the claim and provide a claim number or reference number to the insured’s provider of choice.[6]

e.    If the insured’s provider of choice IS NOT an approved vendor for the insurance company or TPA, the insurer or TPA must confirm that the insured’s provider of choice will perform the required work at the insured’s rate of reimbursement for the work which is “fair and reasonable”. If the provider refuses the “fair and reasonable” reimbursement the insured may be told by the insurer or TPA that the insured is responsible for any amount over the reimbursement rate. The insured must be informed that they can use the provider of choice. The insured must not make statements about the warranty of provider of choice and refer any questions the insured may have regarding any warranty to the insured’s provider of choice.[7]

 

2.    AGRR companies get in the bill (or law if and/or when its signed):

The right to have an insured use them without interference if the customer chooses them as the provider of choice and they follow the rules laid out in the bill. The rules are:

a.    The AGRR company or anyone remotely associated with them must not:

                                          i.    Threaten, coerce or intimidate the insured into filing a claim;

                                        ii.    Engage in unfair or deceptive practices;

                                       iii.   Induce an insured to file a claim if the damage is insufficient to warrant a repair or replacement;

                                       iv.    Perform a repair or replacement for an insured without the approval of the insurance company;

                             v.   Suggest or represent that the windshield replacement could be free under the insured’s insurance policy or

                   vi. Market or advertise to consumers that could be insured’s who have an AGRR loss in virtually any way that their replacement could possibly be free under their insurance policy. [8]

b.    File a claim on behalf of an insured for a repair or replacement.[9]

c.    The insurer or TPA can require an inspection of the loss if they want by the representative of the TPA the representative cannot offer to repair or make suggestions as to who could do repairs during the inspection.[10]

d.    Violations of this section are subject to the provisions of the South Carolina Insurance Unfair Claim Practices Act.”[11]

e.    Notwithstanding the provisions of this chapter, the insurer has the right to inform the insured that the insurer will not guarantee the work performed by a provider that is not in the network of the insurer or third party administrator.”[12]

 

3.    Insurers and TPA’s get in the bill (or law if and/or when its signed):

a.  When an insured does not request to have covered glass repair work performed by a specific provider of choice, the insurer or third party administrator may refer the repair to a vehicle glass repairer who is a member of the insurer’s or third party administrator’s preferred network of providers.”[13]

b.   Strictly limits who can file an insurance claim for an AGRR loss.[14]

c.   The insurer or TPA can require an inspection of the loss if they want by the representative of the TPA the representative cannot offer to repair or make suggestions as to who could do repairs during the inspection.[15]

d.    The provisions of this section do not apply to insurers or third party administrators who do not have a ten percent or greater ownership interest in a vehicle glass repair business.”[16]

e.   Violations of this section are subject to the provisions of the South Carolina Insurance Unfair Claim Practices Act.”[17]

f.    Notwithstanding the provisions of this chapter, the insurer has the right to inform the insured that the insurer will not guarantee the work performed by a provider that is not in the network of the insurer or third party administrator.”[18]

g.     It is an unlawful practice for anyone that sells, repairs or replaces vehicle glass to:[19]

                                          i.    submit a claim to either an insurer or a TPA if the glass was not damaged prior to the claim being submitted;

                                              ii.    if the services were not provide;

                                          iii.    use a location to bill for the repair or replacement other than the one that the repair or replacement was actually performed in an attempt to charge a higher price,

                                             iv.    have authorization from the insured to do the repair or replacement;

                                              v.    show any date other than the actual date of the repair or replacement or

                                            vi.    make any material misrepresentations related to the repair or replacement.

h.  An AGRR company cannot advise a policyholder to falsely the date of the damage done to a vehicle that needs a repair or replacement.[20]

i.  An AGRR company cannot falsely sign on behalf of the policyholder any document regarding the repair or replacement.[21]

j.  An AGRR company cannot intentionally misrepresent the cost to the policyholder for a repair or replacement or tell the policyholder that the insurance company or TPA has authorized a repair or replacement.[22]

k.   An AGRR company cannot represent to an insured that the repair or replacement will be paid entirely by the insured’s insurance company.[23]

l.     An AGRR company cannot do further damage to the glass that is to be repaired or replaced in order to increase the scope of the repair or replacement or encourage others to do further damage.[24]

m.  An AGRR company must repair or replace the damaged glass back to the pre-loss damage and use approved and customary AGRR techniques.[25]

n.    An AGRR company cannot offer rebates or something of value to the insured who files a glass claim.[26]

o.    An AGRR company cannot misrepresent their relationship with the insured’s insurance company.[27]


[1] SECTION 3. Section 1Chapter 5, Title 39 of the 1976 Code is amended by adding: “Section 39‑5‑170. (E)”

[2] As defined by Merriam-Webster.com Dictionary

[3] SECTION 1.  Chapter 57, Title 38 of the 1976 Code is amended by adding “Section 38‑57‑75.(A)”

[4] SECTION 1. Chapter 57, Title 38 of the 1976 Code is amended by adding “Section 38‑57‑75.(B)”

[5] SECTION 1. Chapter 57, Title 38 of the 1976 Code is amended by adding “Section 38‑57‑75.(C)”

[6] SECTION 1. Chapter 57, Title 38 of the 1976 Code is amended by adding “Section 38‑57‑75.(D)”

[7] SECTION 1. Chapter 57, Title 38 of the 1976 Code is amended by adding “Section 38‑57‑75.(E)”

[8] SECTION 1. Chapter 57, Title 38 of the 1976 Code is amended by adding “Section 38‑57‑75.(G)”

[9] SECTION 1. Chapter 57, Title 38 of the 1976 Code is amended by adding “Section 38‑57‑75.(H)”

[10] SECTION 1. Chapter 57, Title 38 of the 1976 Code is amended by adding “Section 38‑57‑75.(I)”

[11] SECTION 1. Chapter 57, Title 38 of the 1976 Code is amended by adding “Section 38‑57‑75.(L)”

[12] SECTION 1. Chapter 57, Title 38 of the 1976 Code is amended by adding “Section 38‑57‑75.(M)”

[13] SECTION 1. Chapter 57, Title 38 of the 1976 Code is amended by adding “Section 38‑57‑75.(F)”

[14] SECTION 1. Chapter 57, Title 38 of the 1976 Code is amended by adding “Section 38‑57‑75.(H)”

[15] SECTION 1. Chapter 57, Title 38 of the 1976 Code is amended by adding “Section 38‑57‑75.(I)”

[16] SECTION 1. Chapter 57, Title 38 of the 1976 Code is amended by adding “Section 38‑57‑75.(K)”

[17] SECTION 1. Chapter 57, Title 38 of the 1976 Code is amended by adding “Section 38‑57‑75.(L)”

[18] SECTION 1. Chapter 57, Title 38 of the 1976 Code is amended by adding “Section 38‑57‑75.(M)”

[19] SECTION 2. Chapter 5, Title 39 of the 1976 Code is amended by adding: “Section 39‑5‑170. (A)”

[20] SECTION 2. Chapter 5, Title 39 of the 1976 Code is amended by adding: “Section 39‑5‑170. (B)”

[21] SECTION 2. Chapter 5, Title 39 of the 1976 Code is amended by adding: “Section 39‑5‑170. (C)”

[22] SECTION 2. Chapter 5, Title 39 of the 1976 Code is amended by adding: “Section 39‑5‑170. (D)”

[23] SECTION 2. Chapter 5, Title 39 of the 1976 Code is amended by adding: “Section 39‑5‑170. (E)”

[24] SECTION 2. Chapter 5, Title 39 of the 1976 Code is amended by adding: “Section 39‑5‑170. (F)”

[25] SECTION 2. Chapter 5, Title 39 of the 1976 Code is amended by adding: “Section 39‑5‑170. (G)”

[26] SECTION 2. Chapter 5, Title 39 of the 1976 Code is amended by adding: “Section 39‑5‑170. (H)”

[27] SECTION 2. Chapter 5, Title 39 of the 1976 Code is amended by adding: “Section 39‑5‑170. (I)”

, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

14 Comments