New TPA Company Launched; Works as Warranty Program
by Penny Stacey
National Glass Exchange (NGE) co-founder Jim Pruce says the new Trinidad, Colo.-based company could change the way the industry works. The company is set up to work as a type of third-party administrator, designed to take the insurance company out of the equation.
"[NGE] is a third-party administrator but the typical fees are not associated with the NGE TPA system, and the insurance companies wouldn't have any more windshield claims," Pruce says.
Rather than marketing its services as a third-party administrator, NGE has developed a warranty program to sell to insurance companies. If the insurance companies purchase the warranty program, called "Road Guardian," it can then offer a warranty program to its policyholders at a higher premium. The insured would not have a deductible for the glass claims that would fall under the warranty program, and its comprehensive insurance would be separate from the program.
"It's a $0 deductible so the intent is to allow the insurance company to sell a higher deductible for comprehensive insurance to the customer, thus saving the consumer money for better coverage," Pruce says.
As for glass shops, they would still have the opportunity to join the NGE, much like other networks, but Pruce says customer choice would still determine the end result.
"We'll be looking to sign up as many independents as possible to make sure we have the coverage insurance companies need, which will also give us better bargaining power with suppliers," he says.
When a consumer who has purchased the warranty needs a glass replacement, he/she can take the vehicle to any shop without involving his/her insurer.
"The way it's going to work is the insured would take [his] vehicle to a shop [and] identify the fact that they have a warranty program," he said. "The NGE shop would [then] log on to eDirectGlass and verify the customer as being a valid holder of the warranty. "
Pruce continued, "[The shop will] get the price through the eDirectGlass system, schedule and process the job, and then the paper is processed through the warranty company, payment is made, done deal. If the shop is not an NGE member, they simply call the warranty company call center and get the price from them."
Once the transaction is complete, Pruce said payment will be remitted to the glass shop in five days.
"All of the payments to the glass shop will be paid directly to the glass shop by the warranty company," he said. "The other issue we addressed is that the warranty company will be able to pay for the work within 5 business days. [Glass shops] typically have to wait 30-days plus for the payment, but this will speed that up and allow them to get paid right away for the work."
To join the NGE, Pruce said it will work much like joining a third-party administrator's network.
"There will be fees associated with the program, just like a TPA, but we're thinking of charging a nominal fee," he said. "Our goal is to get the independents together to work together. We'll be going after the suppliers for better pricing once we get the shops on board."
Pruce and his parter, Ken Keller, co-founded the business. Currently, they own their own auto glass shop, Keller Glass, which has two locations-one in Trinidad, Colo., and the other in Pueblo, Colo. They decided to form NGE when they realized other auto glass shops shared many of the problems they were enduring with networks, payment and pricing.
"We feel it's a win-win for everyone, especially the independents because now they'll get a fair price for their work," Pruce said.
He noted that because the insurance company will only be involved in purchasing the warranty program and selling it to consumers as part of their policies, he expects the pricing structure to change.
"I see the old insurance claims going away. We see a level playing field between the insurance claims and cash glass pricing," he said.
Currently, NGE has not signed up any insurance companies nor glass shops, but says it's seen interest from both sides. Pruce also noted that its partnership with eDirectGlass to provide the software for the new system was the step it needed to launch fully. This partnership was announced today.
"We have a number of glass shops that we have been talking with, but this really was the launch date for the glass shops to know more about what we're doing," he said. "We've certainly talked to a number of shops and the enthusiasm is there."
CLICK HERE for the full text of the press release regarding NGE's partnership with eDirectGlass.
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