Arizona Introduces Legislation to Eliminate ‘Zero Deductible’

Two Republican state legislators in Arizona are co-sponsoring legislation that would
eliminate the state’s “zero-deductible” law with respect to auto glass repair and replacement.

State Sen. Karen Fann and Rep. Noel Campbell are co-sponsors of the bill, SB 1169, which amends the language of the current law to read “may offer,” rather than “shall offer.”

Specifically, the bill reads: “Any insurer writing private passenger automobile insurance that includes comprehensive coverage for motor vehicle damage may offer coverage for the repair or replacement of all damaged safety equipment that may be subject to a deductible offered by the insurer and selected by the insured.

“For the purposes of this section, ‘safety equipment’ means the glass used in the windshield, doors and windows and the glass, plastic or other material used in the lights of a motor vehicle.”

Consumer groups and business owners in Arizona have been aware of the potential for such a bill for some time. In December, Rex Altree, owner of SafePro Glass in Phoenix, reportedly issued a statement in opposition of legislation – then only a rumor – that would eliminate the zero-deductible law.

“If a law like this were to pass, I may have to cut over half of my work force,” Altree said in a release distributed by WebWire. “Now, imagine if a majority of the auto glass companies in Arizona had to take the same action. We would be looking at potentially thousands of hard working employees, people with families who depend on them, losing their jobs.”

Other groups have also opposed the bill, including the Independent Glass Association.

Requiring deductibles could result in loss of business for glass shop owners and “unreasonable out of pocket expenses due to high deductible … policies,” according to a statement January 6 by the IGA to glass shops in Arizona.

Kerry Soat, CEO of Fas-Break, an Arizona automotive glass company, said the elimination of the zero-deductible hurts customers and businesses alike.

“This bill is directed at consumers, and that’s sad,” he said January 10. “The consumer is the real loser here, because they lose the right to choose.”

If deductibles become mandatory, consumers without the money to cover the deductible amount could conceivably forego windshield repairs, creating a safety hazard, Soat said.

Soat drafted a letter, a copy of which was provided to glassBYTES.com, that he intends to distribute to all members of the Arizona legislature.

“This bill, even though it affects the auto glass industry, affects the ‘Consumer’ directly,” the letter reads. “By making a small change in language to the law it carries a devastating blow to the Consumer, your constituents and ‘you’ personally. … This bill’s language change will eliminate the Consumer’s right to choose and allow the insurance company the right to ‘may offer’ – ‘may’ being the key word here which can mean NOT to offer.”

Altree has also issued correspondence. An email addressed to “All Arizona Auto Glass Shops” was sent January 19 from Carly Fleege, an associate with Hamilton Consulting in Phoenix, on Altree’s behalf and contained a link to a survey to gauge reaction to the proposed legislation.

Calls to the offices of Fann and Campbell were not returned.

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