Arizona Glass Bill Moves Forward through Stakeholders Meeting

Fotolia_40612719_MA stakeholders’ meeting was held Monday for Arizona House of Representatives Bill 2500, Unlawful Practices: Auto Glass Repair.” The bill passed the state House and the discussion now revolves around its approval in the Arizona Senate. A glass shop owner risks criminal penalties if he violates the bill’s requirements.

The legislation also would make it unlawful for automotive glass shops to “take an assignment of any claim relating to the repair or replacement of auto glass.”

With the assignment of claims, the glass company receives the contractual rights to receive payment from the insurer. The policyholder signs over his right to the post loss payment and this money goes to the glass company.

“In HB 2500, the Arizona House of Representatives proposes to reverse long-standing Arizona universal insurance law, and a policy that the legislature itself calls an unfair claims practice by making it illegal for automobile glass shops to accept an assignment of claims,” says Dennis Hall, attorney for the Arizona Auto Glass Association. “This rule, allowing assignments, is for the convenience of consumers who have insurance claims and want to allow the service provider to handle the claims work for them.”

In other industries, including the medical and collision repair, the service provider can take the assignment of claims, adds Hall. This bill would reverse this for the automotive glass industry, he says.

“The Arizona courts could not be clearer on this issue,” Hall says. “They stated that ‘[a]fter a loss has occurred and the rights under the policy have accrued, an assignment may be made without the consent of the insurer.’ (St. Paul Fire and Marine Insurance v. Allstate.)

Rex Altree, president of SafePro Auto Glass in Phoenix, Ariz., called the stakeholders meeting a disappointment.

“Every change that was suggested was rejected by the insurance and Safelite lobbyists,” says Altree. “House Rep. Livingston (who sponsored the bill) stated a few times that the bill was passed by a House vote of 53 yes and 7 no … and he expects that there will be a similar percentage of yes to no votes in the Senate.”

While glass companies such as Safelite AutoGlass and Thomas Auto Glass have spoken in favor of the bill, Altree and others remain opposed.

According to Hall, if the bill is approved and becomes law, an automotive glass replacement and repair company owner risks felony charges if he:

  • Represents to a policyholder or other person what automotive glass coverage is available under an insurance policy.
  • Waives a deductible.
  • Offers a value of more than $25 for referral or in connection with a repair or replacement.
  • Performs an insurance repair or replacement without the insured’s and insurer’s approval.
  • Repairs or replaces an insured’s glass without an inspection if the insurer requests.
  • Takes an assignment of claims.

“The speech restrictions here raise genuine commercial free speech issues,” Hall says.

Those in favor of the bill have said it helps to prevent industry fraud.

“We want to thank Rep. David Livingston for his efforts to bring all interested parties together. We continue to support the bill as a means to provide greater consumer protections in the Arizona VGRR industry,” says Scot Zajic, Safelite’s vice president of legislative affairs.

The bill is expected to go before the Senate Finance or Commerce and Workforce Development Committees for a vote within the next two weeks, says Altree. The bill is not on either committees’ agenda yet.

To see the language of the bill that passed the House, click here.

Stay tuned to glassBYTEs.com™ for more on this topic as it becomes available.

This entry was posted in glassBYTEs Original Story and tagged , , , , , , , , , , , , . Bookmark the permalink.

3 Responses to Arizona Glass Bill Moves Forward through Stakeholders Meeting

  1. Frank Thomas says:

    RIGHT IS RIGHT even if everyone is against it.
    WRONG IS WRONG even if everyone is for it !
    Cash spiffs & big rebates force SHORTCUTS with Materials & Workmanship.
    Arizona Automotive Consumers DESERVE SAFE windshield installations.
    I’m a Proponent for SAFETY and nothing is FREE.
    For the Glass Shops that oppose, just think of the funds you’d have to
    Advertise more, why Customers should choose your shop over another.

    • jeff says:

      Wow Frank you scare the hell out of me.I would be afraid to work for the types of Glass Shop you describe, you sound like every shop is evil though. In fact I believe the data on insurance fraud proves the exact opposite. You my friend are painting the majority of small shops with a very sweeping, negative, and broad brush which is just not acceptable.The truth is that the option of offering promos, discounts, rebates, or coupons has been the most standard small business practice since the beginning of business. It is a vital and fundamental and promotes business growth and competition, and is very healthy in any life activity.The funds, items, offers provided for these promos, etc, etc, come primarily from the small business owners profits, not at the added expense of any insurance co or other persons or glass manufacturing mega companies. And in conclusion since when did taking care of your customers become a bad thing. if they make a few bucks from the profit side of this mutually enriching transaction who is harmed? I will tell you who is harmed, the thousands and thousands of Arizonans who take that blessing and go and bless other people and even more small businesses. I have been around this business for a long time and the best part is hearing the appreciation in the customers voice when we tell them they have a gift coming.

  2. Dennis Hall says:

    Some additional information:

    * The Arizona Auto Glass Association, in 2004, promoted legislation that was adopted addressing fraud in the industry with regard to insurance claims. ARS 20-463.01. The current legislation amends that statute, but merely criminalizes marketing practices and exposes small business owners to prosecution for marketing activities. Fraud protections already exist.

    * The Arizona Auto Glass Association, in 2004, also had the legislature affirm the hornbook Arizona law that an insurance claim, post-loss, may be assigned by an insured. It is the proceeds of the claim that are assigned, and it is how the third party payment system works. Arizona law states that is it is an unfair claims practice for a property or casualty insurer to “. . . fail . . . to recognize a valid assignment of a claim.” A.R.S. §20-461(7). The new legislation contradicts this principle.

    * The proposed legislation contains no protection for consumers from steering.

Leave a Reply

Your email address will not be published. Required fields are marked *