Bill curbing auto glass repair lawsuits speeds to final Senate panel

Cracked auto windshields are the latest sector face 'assignments of benefits' abuse in Florida.

A bill meant to counteract Florida’s surge in auto glass insurance lawsuits is rolling toward its final Senate stop, though some parts of the measure could be adjusted before it reaches a full chamber vote.

The Senate Commerce and Tourism Committee voted unanimously to advance a bipartisan bill (SB 1002) prohibiting motorists from transferring their glass insurance repair claims to shops that do the work.

The bill would ban the use of assignment of benefits (AOB), which the Florida Department of Financial Services defines as “an agreement that transfers the insurance claims rights or benefits of the policy to a third party.”

In cases of auto glass repairs, a person with car insurance enters an AOB arrangement with a repair shop, which makes the necessary repairs and files a claim to collect insurance payments without the policyholder’s involvement.

Lawmakers have pushed similar measures in recent years. None succeeded.

Democratic Sen. Linda Stewart of Orlando, the bill’s sponsor, said her legislation will help “modernize our laws” and address a sharp increase in auto insurance premiums that drivers have seen across the Sunshine State.

“(This will) finally put an end to frivolous lawsuits perpetrated by just a few bad actors,” she argued.

Stewart’s bill and its House analogue (HB 541) by Panama City Republican Rep. Griff Griffitts, which last week cleared the first of three committees to which it was assigned, would also bar auto shops from offering incentives for claims.

Between 2011 and 2021, the number of lawsuits over auto glass claims in Florida skyrocketed by 4,000%, according to Eric De Campos, director of government affairs for the National Insurance Crime Bureau, a nongovernmental nonprofit association.

The consensus among everyone at the committee meeting Monday was that something must be done to reduce the number of auto glass lawsuits flooding the state. They just disagreed on how to fix the issue.

De Campos, who praised the bill, said the most effective step would be to take litigation power from the repair shops for which the low cost of individual repairs can shield unscrupulousness.

“Fraudsters use these relatively low-dollar amounts for glass replacement to fly under the radar,” he said. “But their fraudulent actions do add up, and ultimately it’s the consumers who bear the cost.”

Mike Carlson, president and CEO of the Personal Insurance Federation of Florida, concurred.

“AOB begets abuse, as we learned in the (housing) property market,” he said. “Getting rid of this is a very good idea.”

But according to lobbyist Jeff Johnston, who spoke on behalf of several auto glass businesses, AOB is one of the few methods of recourse for an industry that is increasingly hostile to mom-and-pop shops.

He pointed to Safelite, a giant in the auto glass industry that holds contracts with more than 150 insurance companies and is among the first points of contact for policyholders of numerous insurers in Florida.

“Safelite answers that phone, and then they will direct and steer all of those claims to themselves,” he said, adding that when the company doesn’t get the business itself, it frequently pays small, independent operations half of what they bill, forcing them to seek the remainder through litigation.

Johnson referenced an amendment to Stewart’s bill by Indian Rocks Beach Republican Sen. Nick DiCeglie intended to handle the lawsuit issue while allowing small businesses to survive.

The proposed change, which DiCeglie withdrew Monday for more fine-tuning before the bill reaches the next committee, would set reimbursement rates for companies not directly under contract with an insurer, including 85% of the cost for windshield replacements and $85 per hour for labor.

“This way, they stay in business, the insurance companies never have another lawsuit, and it’s a win-win,” he said.

Speaking for Safelite, Ashley Kalifeh of Capital City Consulting said Safelite is one of a few companies that “does help facilitate glass claims for insurance companies,” including handling claimant calls. But she denied Johnson’s claim that Safelite steers policyholders toward its own shops.

‘Steering is something that we take very seriously, and Safelite is under a number of rules and regulations across the country that prohibits steering,” she said.

What some would allege as steering, she said, is instead a common practice in which Safelite advises claimants may pay more if they choose a shop that isn’t in the insurer’s network.

“There’s been litigation in other states where they kind of call that steering,” she said. “Courts have come down and said that’s a perfectly acceptable and truthful act of commercial free speech, to tell people they may want to verify the shop accepts the payment their insurance company offers before they go that route. I think that’s a good consumer protection.”

SB 1002 will next go to the Senate Rules Committee before reaching a full chamber vote. HB 541 has two more House stops — the Civil Justice Subcommittee and Commerce Committee — before going to the floor.