Collision repairers are being squeezed more and more by insurance companies that continue to use this industry as a scapegoat while cutting their own losses in an attempt to satisfy stockholders and save their own jobs. They’re free to do so because government regulators simply aren’t enforcing existing laws pertaining to unfair trade practices, including steering. Instead, they’re devoting their energies to enforcing environmental and labor laws.
Government agencies, such the Environmental Protection Agency (EPA) and the Occupational Safety and Health Administration (OSHA), are intensifying their efforts to enforce strict, burdensome regulations of hazardous waste disposal, pollution and worker safety, among others. The governmental red tape and overlapping regulations add to the cost of operating a small business at the same time that insurers are squeezing every dime from a legitimate repair claim.
Above the Law?
Certain insurers seem to operate above the law by routinely violating existing statutes. As an example, I recently received a phone call from Donnie Wolfe, owner of Precision Glass Company located in Lexington, N.C., who related horror stories about a particular network call center owned by Safelite Glass Corporation Company, a competing glass company that he alleges is "in cahoots" with Nationwide. Wolfe maintains that they routinely engage in various devious tactics to "steal business." In his words, "They’re lying, cheating and stealing customers."
Seems like I heard that story before. About a month ago, during my visit to Pfaff’s Auto Glass in Winston-Salem, N.C., owner David Pfaff said, "There’s no excuse for lying, cheating and stealing." Pfaff was – ironically or not – referring to Nationwide and Safelite.
Why are these business owners so upset? For starters, their customer is required to call a toll-free number to an out-of-state call center that appears to be Nationwide but is owned by Safelite. From the first call, the customer is steered in the strongest possible manner to Safelite.
During this call, the customer hears how your technicians aren’t "certified" by Nationwide or Safelite and how Nationwide won’t guarantee the work if it’s not done by Safelite Glass-certified installers.
If the customer continues to insist on having the work done at his chosen repair shop, the call center demands that the chosen shop owner or manager participate in a three-way conversation just to schedule an appointment.
But before the scheduled appointment occurs, Safelite dispatches a mobile glass truck to do the job. When the time comes for the customer’s chosen appointment, the work already has been completed.
Fiction? No. In today’s auto glass repair business, this is reality.
Recently, I came upon a bulletin posted in an auto glass shop titled, "Legal Directive." It is, in fact, a legal directive from the North Carolina Commissioner of Insurance to the CEOs of insurance companies that write automobile insurance in North Carolina. It’s dated Dec. 3, 1991.
This "Legal Directive" states that evidence has been presented to the North Carolina Department of Insurance regarding steering by certain insurers and says: "This conduct is prohibited by both the North Carolina General Statutes and the North Carolina Administrative Code." The directive further admonishes: "You are hereby advised of these provisions of law and are advised to cease any such practice if it is occurring within your operations in the state of North Carolina."
The directive is clear. So why are steering and other unfair insurer practices still alive and well and in operation today, more than a decade after the North Carolina Commissioner of Insurance issued this cease-and-desist directive? Existing laws simply are not being enforced.
In North Carolina, there have been regulations as well as statutes pertaining to steering for many years. House Bill 13 that was signed into law last October simply took existing regulations and put them into the General Statutes. That law allows insurers to recommend a repair facility only if they inform the claimant that he’s under no obligation to use the recommended facility and that he has the right to choose the repair facility for his damaged vehicle. To view the bill, go to www.ncleg.net and type in H13.
I know for a fact that existing laws are being broken here because I talk with people every day who’ve been steered and given no choice whatsoever. In fact, a lady called me this afternoon and told me that Allstate told her that she had to take her damaged car to one of the collision repair shops on their list, even after the lady insisted on a specific shop not on their list. I told her to call back and get the person’s name, position and location and inform Allstate that she would be taking her vehicle to her chosen shop – not theirs.
Yesterday, I was in Richmond, Va., lobbying on behalf of some body shops there, and I’ll be back there tomorrow doing the same thing. Virginia body shops want legislation passed there because steering is so prevalent. Today I’ve talked with shops in Minnesota, Pennsylvania, South Carolina, Georgia, Tennessee and Virginia, and they’re not happy with the current situation either.
Document, Document, Document
What can collision repair and auto glass business owners do? Begin with documenting. Keep a written record of dates, times, events and all paperwork related to the violation. Record any phone calls – dates and times, who initiates the calls (names and positions of callers and where calls originate from), and whether the callers are employees (if so, of which company) or independent contractors (if so, which company the callers actually work for and where they’re located).
Also document consumer complaints of steering and other unfair insurer practices. Officials charged with enforcing the laws will regard your words as hearsay unless they’re supported by documentation. Document! Document! Document!
And it’s most important to document complaints as they occur, before details are forgotten. Ask your customer to sign a statement with a brief, concise account of what happened. Attach copies of the complaints to your cover letter and forward them your state’s attorney general and commissioner of insurance, along with a copy to your trade association.
On your letter, note at the bottom the other officials, trade associations or individuals to whom you’ve also sent copies, with attachments. Be sure to request a response to your letter within a certain time (example, one or two weeks). If you haven’t received acknowledgment in that time, call the office and keep a record of the person with whom you talked and his title, and ask what action is being taken on your complaints.
Equally important in reclaiming a level playing field is educating your legislators on the problems that exist with insurers. You can write all you want, but no legislator is going to be moved to action unless you attach documentation to your letter. Without documentation, it’s your word against someone else’s, and you may, at best, receive a scripted "thank you" for your letter. Continue to write your legislators, and document each incident you believe to be steering or another violation of law.
You also need to educate your customers on their collision repair rights. How do they know their rights are being violated unless you educate them, maybe by reproducing copies of such legal directives as the one from the North Carolina Commissioner of Insurance?
Join the fight to regain your right to compete for business. Do it now! Educate your customers. Tell them about their collision repair rights. When you learn that insurers are steering your customers away from your shop, steer your customers to the truth. They have a right to know what their rights are. And if they trust you enough to come to you for repairs, they’ll believe you when you tell them the truth about their rights.
Writer Mike Causey is a lobbyist in Raleigh, N.C., for the Independent Auto Body Association, the North Carolina Glass Association and the law firm of McDonald & Myer, PLLC. Causey can be reached by e-mail at [email protected] or by phone at (336) 210-1947.