However after the signature is collected and the restore is made, the glass retailers ship exorbitant payments to insurers, who usually deny or pay out a lesser quantity for the declare. Legal professionals then sue the insurance coverage firm for cost and the price of authorized charges, usually settling a whole lot of lawsuits at a time for a hefty sum.
It’s all a part of a community of out-of-state firms and attorneys which have carved out a whole trade primarily based on these glass replacements — so expensive to insurance coverage firms that it has brought about charges to skyrocket throughout the state, client advocates say.
The tactic is widespread solely in Florida, the place greater than 46,000 auto glass lawsuits have been filed thus far in 2023, in accordance with knowledge from the state’s Division of Monetary Providers.
Legal guidelines meant to guard shoppers have fueled the development, which has exploded over the previous a number of years — solely 591 such Florida lawsuits have been filed in 2011. Advocate teams level to the burgeoning trade of “unscrupulous” auto glass retailers and attorneys as a number one issue behind the state’s excessive insurance coverage prices.
The lawsuits have been inflaming an already bleak auto insurance coverage market in Florida — a state whose common auto insurance coverage premium of $2,560 is the very best within the nation. The problem of auto glass litigation has turn out to be so dire that legislators have handed two legal guidelines previously 12 months to attempt to gradual it down.
Whereas automobile insurance coverage charges are rising sooner than inflation nationally, Florida’s will increase have been probably the most drastic — the common premium at the moment is 88 % costlier than a decade in the past, in accordance with figures from trade knowledge agency Insure. Insurers have blamed the expensive premiums on hurricanes and a excessive share of uninsured drivers, however the firms seldom point out that in addition they are passing on the price of auto glass litigation.
When Florida resident Francinete Borgstrom was approached final December in an Orlando parking zone by an auto glass salesman, the supply “didn’t sound any alarms,” she mentioned. The salesperson advised her that Auto Glass America may change her damaged windshield and not using a deductible, so she signed the waiver with no questions requested.
Borgstrom mentioned she didn’t understand that when she signed away her project of advantages — that’s, licensed the glass restore firm to imagine her rights underneath her insurance coverage coverage to hunt cost for the work — she additionally gave the store the best to sue the insurer in her title if essential. Auto Glass America did simply that when the insurance coverage firm, AssuranceAmerica, refused to pay the invoice of $1,461. That worth is greater than 4 instances the common price for that sort of restore, primarily based on figures cited in a lawsuit filed in opposition to the identical restore store by one other insurance coverage firm, Allstate.
These glass retailers primarily goal older folks, immigrants and nonnative English audio system, client advocates mentioned and courtroom information counsel. Borgstrom, who immigrated to the US from Brazil, didn’t know a lawsuit had been filed in her title till she was contacted for this text.
A consultant from Auto Glass America declined to touch upon its enterprise mannequin however mentioned the corporate not presents items in change for servicing. The opposite glass restore retailers talked about on this article didn’t reply to requests for remark.
“Not solely will it most certainly result in a better price at their subsequent renewal date, nevertheless it has the potential to generate a nonrenewal on the finish of their present coverage interval,” mentioned Mark Friedlander, director of communications for the Insurance coverage Data Institute. “The typical $30 restore may very well be a six-figure influence on an auto insurance coverage firm.”
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The auto glass retailers contract harvesters to search out clients, generally even going door-to-door, lawsuits by insurance coverage firms allege. Together with a free glass substitute, the harvesters at instances supply items to entice their targets, some as helpful as $200.
As soon as a glass firm persuades a driver to conform to the substitute and signal away their project of advantages, the store provides “unreasonable charges and tack-ons” to the insurance coverage declare, mentioned Michael Carlson, president of the Private Insurance coverage Federation of Florida, an trade commerce group.
When the insurance coverage firms pay out a lesser quantity for the substitute or reject the declare completely, the glass retailers sue for the rest of the bounty. Then come the attorneys.
Till the latest modifications handed by state lawmakers, Florida had what are known as “one-way legal professional’s charges” — a requirement that the insurer has to cowl the plaintiff’s cheap authorized charges if it loses or settles a declare. These litigation charges are “the place the true gravy is,” mentioned Capital Metropolis Consulting associate Ashley Kalifeh, who labored with Florida regulators to shut loopholes within the state’s insurance coverage legal guidelines.
These charges are concentrated in a small group: Simply 20 attorneys file 96 % of the glass lawsuits in Florida, in accordance with knowledge commissioned by the Florida Justice Reform Institute.
Attorneys who file the lawsuits argue they’re serving to people battle a big, entrenched system.
“The concept was to stability out the scales of energy between a multibillion-dollar insurance coverage provider and Mother and Joe,” mentioned William England, an legal professional for Chad Barr Legislation who focuses on auto glass litigation. “If it comes right down to being abused, there’s all the time a number of unhealthy apples in any society.”
The preliminary lawsuit filings are sometimes just some pages lengthy and primarily based on a template that may be crammed in with the title of the insured driver and the date of restore, a streamlined course of that helps auto glass attorneys shortly file 1000’s of instances with relative ease.
Legal professionals will supply to settle bunches of lawsuits for a single sum, Carlson mentioned. That’s cheaper for insurers than litigating every case individually, even when some are winnable, as a result of the insurance coverage firms can move the prices of settlement to policyholders, in accordance with Friedlander.
However insurance coverage firms would somewhat not need to take care of the mass lawsuits in any respect. In a lawsuit filed by Allstate in opposition to Auto Glass America in 2019, the insurance coverage big known as the apply a “grasping scheme to extract as a lot cash as potential.” The mixed price of Auto Glass America’s claims and litigation in opposition to Allstate in 2017 and 2018 exceeded $600,000, in accordance with the lawsuit. “The impact of AGA’s illegal and inequitable conduct is substantial,” it added.
Jannet Mehmed, 76, had the glass changed on her 2017 Toyota Camry by Orange Blossom Auto Glass after discovering the corporate by means of a web-based search in August 2022. Mehmed’s State Farm agent later known as her with unhealthy information — she had been charged $1,812, properly over market price.
“Senior residents are very trusting,” Mehmed mentioned. “You give them the impression that you simply’re going to assist them, they usually’ll open their checkbooks.”
Some lawsuits by insurance coverage firms allege that harvesters solid signatures of drivers who turned down their presents. Others allege that tumbler retailers by no means made the repairs after accumulating the signatures, however nonetheless filed claims.
For years, the apply of submitting auto glass lawsuits has existed inside the authorized boundaries due to one-way legal professional’s charges and free insurance coverage rules. When the lawsuits spiked in 2019, a coalition of insurance coverage teams known as for modifications within the state’s legal guidelines by means of an initiative known as Repair the Cracks.
The initiative, led by the Private Insurance coverage Federation of Florida and funded by means of commerce associations by Allstate, Farmers Insurance coverage, Progressive and State Farm, helped move two legal guidelines supposed to close down Florida’s freewheeling auto glass trade and put an finish to “windshield bullies,” in accordance with its web site.
The primary measure, handed in December 2022, barred one-way legal professional’s charges for insurance-related claims. The second, handed in Might, prohibited the switch of project of advantages for auto glass repairs, making it more durable for glass-replacement firms to repair windshields with out first contacting the insurance coverage firms. The Might legislation additionally makes it unlawful for glass firms to supply free perks in change for companies.
However auto glass lawsuits proceed to roll in, courtroom information present. The assignment-of-benefits legislation applies solely to insurance coverage insurance policies renewed or reissued after Might 26, 2023, Kalifeh mentioned, leaving a six- to 12-month interval for attorneys to file as many lawsuits as potential earlier than all present insurance policies have been renewed — 46,059 lawsuits have been filed from January to August, in accordance with knowledge commissioned by the Florida Justice Reform Institute.
A few of the plaintiffs’ attorneys argue that insurance coverage firms nonetheless stand to revenue from the modifications in Florida’s legal guidelines. Imran Malik, a lawyer who filed over 7,000 glass lawsuits in 2022, mentioned insurers have used the price of litigation as a “handy scapegoat” for elevating charges however have but to decrease them because the new legal guidelines have been handed.
“Even with all of the modifications which have occurred within the legislation, not one insurance coverage firm has lowered their charges in any respect,” Malik mentioned.
The insurance coverage firms, Malik added, have lengthy had “soft relationships” with bigger glass retailers akin to Safelite, which smaller glass retailers take enterprise away from. Safelite didn’t immediately reply emailed questions on its relationship with insurance coverage firms.
“There’s not a whole lot of clear fingers on this trade,” mentioned Florida legal professional Zachary Hicks, who has labored on auto glass litigation instances since 2019. “The issue is that plaintiff’s attorneys will abuse the system when you allow them to. Insurance coverage firms will abuse the system when you allow them to. … Insurance coverage firms acquired precisely what they needed — they eradicated all of it — and charges are nonetheless up.”
Hicks added that he himself was lately dropped by Geico for not carrying minimal legal responsibility automobile insurance coverage, despite the fact that he pays for a Geico umbrella coverage.
The whole prices of claims made by glass retailers and their litigation prices are unknown, however Kalifeh estimates them to be “simply within the tens of thousands and thousands of {dollars} a 12 months.”
England and Hicks imagine, nevertheless, that the brand new legal guidelines will successfully finish auto glass litigation as an trade as soon as the grace interval for submitting lawsuits is over. When it does, it’s unclear by how a lot insurers will scale back premiums. State Farm, Allstate and Progressive declined to touch upon how the lawsuits have an effect on particular person charges.