Arizona Governor Signs Auto Glass Fraud Bill

April 29, 2010

Arizona Gov. Jan Brewer signed a bill addressing auto glass businesses and detailing several types of insurance fraud this week. The bill, which was introduced in the state's House and passed both branches of the state's legislature in recent weeks, was signed by the governor on Tuesday, April 27.

The legislation adds a section to the state's laws addressing auto glass shops and details a number of items that are "unlawful" for those "who sell or repair auto glass."

The final version of the legislation identifies the following items as illegal:

  • Submitting a false claim to an insurer for auto glass repair or replacement or for related services if the services were not provided, if the work appears on the invoice as being completed in an incorrect geographical area, resulting in a higher payment, if the work wasn't authorized by the owner or lessee of the vehicle, or if the invoice was mislabeled with such a date that insurance coverage might not have applied;
  • Advising a policyholder to "falsify the date of damage to the auto glass that results in a change of insurance coverage for repair or replacement of the glass;"
  • Misrepresenting the price of the repairs or replacement being billed to an insurer, or that the insurer has approved the repairs "unless the auto glass repair or replacement facility has verified coverage or obtained authorization directly from the insurance company or any other third party administrator contracted with the insurance company and the evidence has been confirmed by fax, e-mail or other written and recorded communication;"
  • Advising a customer that the work will be paid entirely by his/her insurer "unless the insurance coverage has been verified by a person who is employed by or is a producer contracted with the policyholder's insurer or is a third party administrator contracted with the insurer;"
  • Adding to the damage of the auto glass prior to the work being done, or to encourage a customer to do the same "to increase the scope of repair or replacement;" and
  • Performing work "clearly and substantially beyond the level of work necessary to repair or replace the auto glass to put the vehicle back into a safe pre-damaged condition in accordance with accepted or approved reasonable and customery glass repair or replacement techniques."

In addition, the legislation includes a section making it illegal for an auto glass business representative to "misrepresent the relationship of the glass repair facility to the policyholder's insurer."

The bill originally was introduced by Arizona Rep. Nancy McLain, who advised at a recent hearing that she introduced the bill "to try to get rid of some outright fraud that's going on in the windshield repair business." (CLICK HERE for related story.)

CLICK HERE for full text of entire bill as passed.

Need more info and analysis about the issues?
CLICK HERE to subscribe to AGRR magazine.