Committee OKs ban on customer incentives by auto glass shops

Legislation to bar auto glass shops from offering incentives to lure windshield repair customers cleared the House Insurance & Banking Subcommittee Wednesday on an 11-2 vote.

The dissenters feared the legislation would make it harder for small businesses to compete against large players like Safelight Group.

Sponsor Richard Stark, a Democrat from Weston, insisted that his proposal (HB 323) would crack down on dodgy vendors seeking access to insurance money.

“The goal of the bill is not to put people out of business. The goal of the bill is to prevent people from offering cash to file a claim,” he said.

“We don’t see it in any other part of the insurance field. In fact, this is one of the few insurance fields where you can get something done that you don’t pay for.”

That’s because most car owners carrying comprehensive coverage are eligible for free replacement of cracked windshields with no deductible.

In extreme cases, Stark said, auto glass shops send people out to parking lots offering to inspect windscreens and repair any damage — even when there is none.

It happened to subcommittee Chairwoman Cyndi Stevenson, a Republican from St. John.

“I have been offered money to fix my windshield in a parking lot and be paid for my trouble. And my windshield is just fine,” Stevenson said.

The incentives to let a shop file an insurance claim can include cash, rebates, coupons, and gift cards. Apparently, they don’t always pay off, according to state consumer rights officials.

Department of Financial Services figures show a major increase in auto glass lawsuits beginning in 2012 — 1,389, compared to 478 the year before. By 2017, the number had increased to 25,664 — although the number last year declined to 17,399.

Representatives of small auto glass shops described their difficulty going up against Safelight, which serves as a preferred provider and third-party administrator for insurance companies.

“The only way to compete with them is to have some kind of incentive,” said Todd Palmer of Mr. Auto Glass in the Tampa area.

He offers incentives for perhaps one or two customers per 100, he said following the hearing, and that’s when the customers ask him to match a competitor’s rate.

Ashley Kalifeh, representing Safelight, insisted that rebates mostly serve as inducement to customers to allow vendors to sue insurers.

“They’re just inflating the cost of the claim to cover their gift card,” she said. “Everyone pays for that at the end of the day.”

She added: “If you’re having to convince someone that their windshield is broken and needs to be fixed, maybe your windshield is not actually broken.”

Land O’ Lakes Republican Rep. Ardian Zika was among the committee members worried about the potential harm to small business. The bill might allow insurance companies to pick winners and losers within the auto glass industry, he said.

“I can tell you, the data will come back subsequent to this bill passing (will show) the larger players will have a larger market share in Florida. It’s simple economics. And guess what: They will raise prices, and the consumers will not have a choice.”

Stevenson shared that concern to a point.

“I am from a family of small business owners, so we certainly don’t want to lose our small business opportunities,” she said.

“The problem is when we give a product away for free and give somebody an incentive to make a claim for that, it ends up running up the costs of insurance for ratepayers. That is my primary concern — that it’s unnecessary claims.”