Auto Glass Industry Reacts to Allstate’s Dealer Glass Parts Pricing Revision
April 27, 2011
Allstate’s announcement this week that it is changing the amount it will pay for dealer glass parts has led to an uproar in the industry. The country’s largest publicly held personal lines insurer says it will reimburse 90 percent of the dealer list price. For dealer purchased (usually OE) glass, Allstate further stated that this rule does not authorize shops to collect or require any additional amount from Allstate policyholders, other than the insured’s deductible.
The announcement went on to say, “Dealer glass parts and related costs must be authorized in advance of installation by contacting and obtaining such authorization from our program administrator, LYNX Services.”
Reaction has been swift and universally negative.
“I wouldn’t be happy with this revision for sure. It’s just one more thing where we are losing a little bit more money. We haven’t had it happen to us with Allstate yet, but we had another insurance company that only agreed to pay half for an expensive dealer windshield last week,” says Jerry Mauldin, president of Mauldin’s Auto Glass in Gainesville, Fla.
Others are not surprised about Allstate’s price revisions.
“Allstate has always taken advantage of the third party administrator veil that they use to short-change their policyholders. I’m surprised at the reaction of auto glass shops because this is nothing uncharacteristic from Allstate,” says Mike Russo, executive director for the Independent Glass Association (IGA). “Rather than address these issues directly with their policyholders they decide to put their shops in the position to advise the policyholders at the time the policyholder requests a purchase.”
“I would think it’s just another way to help them save money,” adds Mauldin.
With some vehicles requiring a dealer product, some within the industry feel this could be an inconvenience to policyholders who want to get their vehicle fixed properly the first time.
“We only use dealer parts when absolutely necessary, but some customers demand it and sometimes, there is no aftermarket that will fit properly. When fit is an issue, we have no choice, since it is our reputation and our headache when the job doesn't suit the customer,” says Donna Braden, president of Jack’s Glass in Allentown Pa.
“Customers will get a bit cranky when their door glass won't go up and down because the holes drilled by an aftermarket manufacturer don't line up, or when their moldings won't stay on because the aftermarket windshield doesn't properly fit their car. Sometimes it is a safety issue. It is imperative that the windshield fits properly.”
“Ultimately, what they are doing is screwing their policyholders, but they are counting on the shops to do their dirty work,” says Russo. “My recommendation to the shops is to take care of the customer,” says Russo.
“Allstate needs to revisit this decision,” says Braden. “Won't it end up costing Allstate more if the customer must go to the dealer when a dealer part is necessary because the glass shops can't do it profitably? Are dealers paid full list, along with their higher labor rates?”
glassBYTEs.com™ request for comment to LYNX Services was referred to Allstate which, at press time, had not responded.
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