David Glawe: Time to fix the cracks in auto glass laws

Drivers hit the road every day with the expectation that they — and their vehicles — will return home without incident. Basic personal auto insurance provides car owners with the peace of mind that, in the unlikely event of an accident, the insurer will be there to step in and assist. But most consumers prefer to never have to make that call to their insurance company in the first place.

Unfortunately, a small segment of bad actors are more than happy to file insurance claims in order to reap unlawful rewards. Criminals who file fraudulent individual claims — or who are involved in broader criminal conspiracies across multiple claims — are frequently on the lookout for a quick return. In Florida, these scammers file false or inflated claims in the auto glass market through solicitations or inducements.

The National Insurance Crime Bureau (NICB) is the nation’s premier not-for-profit organization dedicated exclusively to fighting insurance fraud and crime and is supported by more than 1,200 property and casualty insurance companies, including many that write business in Florida. Working hand-in-hand with our member companies, and Florida state and local law enforcement, we help to detect, prevent, and deter insurance crimes, including auto glass fraud.

Unfortunately, NICB agents continue to identify fraudulent schemes in the state involving auto glass repair vendors. In one typical ploy, vendors target unsuspecting drivers in public places, such as car washes and store parking lots. These vendors inform motorists — fraudulently — that their windshields have chips or cracks in need of immediate repair. The vendors assure owners that they will work directly with the insurer, at no cost to the owners, as long as the owner signs over the right to do so — also known as an assignment of benefits. Some vendors even offer cash or gift incentives in order to obtain the assignment.

Most drivers do not realize what an assignment of benefits (AOB) is — and that by signing the document, the owner is legally transferring all of their rights and benefits to their insurance claim over to the nefarious windshield contractor, including the right to sue. Unscrupulous glass repair vendors then often submit fraudulently inflated claims to the driver’s auto insurer.

Additionally, vendors often file a lawsuit — usually without the owner’s knowledge or consent — when coverage is reasonably called into question. Owners are completely unaware they are suing their own insurance company. Auto glass lawsuits are incentivized by an existing “one-way attorney fee” provision in Florida law. The one-way attorney fee statute was originally intended to level the playing field between individual policyholders and insurance companies. Those dynamics are no longer in play when litigation is hijacked by third parties for commercial disputes. The balance between reasonable paths for consumer redress and the need to reduce abusive litigation has been upended.

The number of auto glass suits filed in Florida reveals evidence of that imbalance: auto glass lawsuits increased by more than 4,000% from 2011 to 2021. Florida was also the leading state for auto glass claims in 2020 with nearly half a million claims filed.

NICB reviews thousands of suspicious auto glass claims submitted by bad actors, and in combination with Arizona, Florida accounted for 74% of all questionable auto glass claims filed in the United States that year. The average glass repair in the United States in 2020 cost $294.30, compared with the average repair cost in Florida, which is $435.56, representing a 48% premium for auto glass claims. Fraudulent conduct ultimately impacts every consumer as unlawful claims lead to higher insurance premiums that innocent policyholders are left to bear.

In 2022, NICB joined the Personal Insurance Federation of Florida, the Florida Justice Reform Institute, and other stakeholders to help launch an initiative known as Fix the Cracks. The mission of the Fix the Cracks initiative is to address the growing problem of auto glass fraud and abuse by helping to educate the public and seeking meaningful reform to the law, including removing assignment of benefits from Florida statute and prohibiting glass shops from offering inducements to consumers. Bills filed in the House and Senate this legislative Session address these reforms and will go a long way toward protecting consumers from criminal actors and irresponsible litigation.

Florida lawmakers took an important first step to address these abuses by passing House Bill 837 which eliminated one-way attorney fees. The next step is for lawmakers to pass legislation (HB 541 and SB 1002) to curb auto glass fraud and abuse by removing the financial incentives provided by AOBs and inducements, which will help reduce fraudulent activity, improve conditions in Florida, and protect consumers from rising rates.

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David J. Glawe is the President and Chief Executive Officer for the National Insurance Crime Bureau.