As usual, the insurance industry is crying foul, complaining that they are subject to a wave of lawsuits over the way they handle Florida windshield repair claims. Unfortunately, the people squeezed in the middle are the very people who are doing the actual repairs. They are increasingly unable to collect money from large insurance companies after doing the work that they are legally entitled to be paid for.
What has precipitated this battle?
A relatively new Florida law enables car owners to get cracked and broken windshield glass repaired without any cost, including the cost of a deductible, if the car owner has comprehensive insurance coverage. This law was established to encourage people to get their windshields repaired quickly to ensure against safety issues. So far, so good. At least for the consumer.
Small Independent Glass Repair Shops in Florida Were Not Being Paid Fairly For Their Work
In the meantime, small independent glass repair businesses in Florida were finding that it became increasingly more difficult to get paid from the large insurers for the work they were doing. Many large insurance companies have gone into arrangements with large windshield replacement companies to administer claims and keep the cost of replacements — and their claims — down. But a vehicle owner can go to any repair shop they choose for this service. In order for the repair shop to be paid for their services, the insured party merely has to assign benefits over to the repair shop to get paid for the windshield repair.
Insurance Policy Limitations
Insurance companies limit what they will pay for these repairs to what is considered prevailing competitive costs, which sounds reasonable at face value. But the industry has driven down what that competitive price is by contracting with large windshield repair companies at a significant discount to what is considered competitive in the industry. This leaves small independent repair shops that charge actual competitive prices struggling to get paid.
How Are Prevailing Competitive Costs Determined?
Small shops typically use industry standard pricing for auto glass that is used by repair shops throughout the country. And while that is what the auto glass repair industry considers competitive, the insurance industry believes that they should determine what competitive is by what they can negotiate at discounted rates.
The discounted rates they are willing to pay are often not even enough to cover a small shop’s cost of a repair. Unfortunately, many small independent repair shops that rely on insurance claims as payment for these services are being underpaid for their services or not paid at all because of these standoffs. In the meantime, insurance companies are crying fraud, while the small independent auto glass companies are saying that these insurance companies are outright refusing to pay fair repair costs.
In the Courts
As an illustration, last year Hillsborough County, FL Judge Miriam Valenburg ruled that GEICO had breached its contractual obligation to reimburse eleven claimants for glass repairs through Glassco, a Florida-based company. Glassco had obtained assignments of benefits from each policyholder so it could be paid by GEICO for their work, as allowed by law. The issue? What was a considered prevailing competitive price. Glassco’s victory hinged on the 2018 13th Circuit appellate ruling in GEICO v. Superior Auto Glass. The court ruled that a prevailing competitive price truly had to be competitive and not the amount that an insurer could negotiate. GEICO has appealed.
Getting Legal Help
While the Florida windshield replacement law has worked very well for the consumer with the proper insurance coverage, it hurts small independent repair shops trying to make a fair living. Being held to artificial pricing that doesn’t even cover their costs is unfair and unacceptable.
At Ged Lawyers, LLP, we can help small auto glass businesses collect what is due them. If you are a glass or repair shop owner that is having difficulty getting paid by insurance, let our experienced Florida windshield replacement litigation lawyers help. Call us at (561) 995-1966 or contact us online to schedule an appointment.