Windshield suits wind down

Far fewer automobile glass shops taking action against insurers

The rising tide of lawsuits by car windshield replacement companies against auto insurers has apparently crested — a result, plaintiff ’s attorneys say, of pricing truces between insurers and independent glass shops.

After increasing for several years, the number of lawsuits against insurers by glass shops dropped sharply in the first half of the year, according to a Sun Sentinel analysis of cases against insurers that attorneys report to the state’s Service of Process Reports database as required by state law.

Lawsuits against auto insurance companies by windshield repair companies or companies known to handle billing on their behalf decreased by 37.4 percent — from 13,475 to 8,435 — between the first six months of 2017 and the same period in 2018, the analysis found.

Brian Motroni, attorney for one of the largest independent glass repair shops in the state, Auto Glass America, says lawsuits by independent glass shops are decreasing because more insurers have entered into pricing agreements with the shops after courts ruled the insurers improperly based reimbursement rates on deeply discounted prices available from industry giant Safelite.

Emilio Stillo, a Davie-based at-

torney who filed 1,758 windshield cases in the first half of 2017 and 605 during the same period this year, concurred: “The shops and the insurers have been agreeing to resolve their disputes out of court. We’ve gotten them to the point they don’t need us anymore.”

A spokesman for the insurance industry said he isn’t convinced the numbers in the state database indicating a sharp decrease in lawsuits by the glass shops are accurate. “We believe the number of lawsuits are being under-reported,” said Logan McFaddin, Florida regional manager for the Property Casualty Insurers Association of America, in a written statement.

The association’s spokeswoman, Brooke Kelley, said the organization did not have specific reasons as to why the number of lawsuits might be under-reported but added that even 8,000 suits over six months is too many in light of the fact that the number of suits increased from about 400 in 2006 to about 20,000 in 2016.

“We still have a long way to go toward fixing the Florida system and protecting consumers,” McFaddin’s statement said. “Thousands of cases are still being filed, which is evidence [of ] a real problem that must be addressed.”

Not all auto insurers have been willing to negotiate pricing agreements, Motroni said, but those who are coming to the table are likely motivated by the recent courtroom victories of shops that challenged insurers’ habits of tying reimbursement rates to Safelite’s high-volume pricing.

Courts are ruling that language in the insurers’ policies — obligating insurers to pay a “prevailing competitive price” for replacement windshields — cannot be satisfied by paying the lowest contracted price, he said.

As an example, Motroni pointed to an April 3 ruling by a Hillsborough County judge in a suit Auto Glass America brought against Geico General Insurance Co. Citing a March appellate court ruling, the judge sided with Auto Glass America, saying the evidence showed “the amount [the] Defendant paid [the] Plaintiff for the windshield replacement in this matter was established by [the] Defendant’s agreement with its third party administrator, Safelite — not what the services would cost in a competitive market in a normal, arms’ length noninsurance transaction.”

Motroni and other independent glass shops contend that Safelite has been willing to accept lower prices because the company’s claims services arm also has lucrative contracts to provide claims administration services for the nation’s largest auto insurers.

A Safelite spokeswoman rebutted that assertion in an email statement Friday, saying “it’s simply inaccurate.” In fact, said Keriake Lucas, “Safelight Solutions earns the opportunity to service insurance clients based on the services we provide and the high level of customer satisfaction that we deliver.”

Just as the number of lawsuits against home insurance companies fueled by “assignment of benefits” has been concentrated in South Florida over the past several years, the largest volume of assignment-related windshield suits have been in the western and central areas of the state.

Cases in Hillsborough County, where the trend has been most pronounced, have held steady, from 5,480 in the first half of 2017 to 5,260 so far this year. And in Orange County, suits increased from 2,116 to 2,861 over the two periods.

But what looked last year like an expansion of such suits into South Florida now looks like a retreat.

In the tricounty region, the number of windshield suits declined from 2,061 to 212 — a decrease largely attributable to the departure of one of the largest and most litigious independent companies, Auto Glass America, from the tricounty market last year. The company was responsible for 764 suits in Broward County in the first half of 2017 and none so far in 2018.

Motroni said Auto Glass America pulled out of the South Florida market because it was unable to hire “experienced installers” to provide “excellent customer service and quality work” as the company has in the Tampa area.

If the decrease in windshield suits continues across the state, the Legislature won’t need to enact laws to quell windshield suits as lobbyists for the insurance industry have been demanding, Motroni said.

“If the Legislature does nothing, the litigation is going to fizzle out on its own within a few years,” Motroni said. Statewide, suits filed by Auto Glass America decreased from 3,246 in the first half of 2017 to 2,138 so far in 2018, the state data shows.

Other independent glass companies filed fewer suits across the state as well during the period, including SmartRide Windshield Repair (from 927 to 326); Jaguar Glassworks (from 1,570 to 364) and Glass Replacements LLC (from 1,097 to 414).

Auto insurers’ most recent proposal to beat back the increase in lawsuits — requiring inspections to ensure windshields actually need to be replaced — died during last spring’s Legislative session.

By billing and suing insurers after persuading policyholders to sign over their claim benefits, the windshield repair companies follow in the footsteps of South Florida-based water damage repair companies, the insurers have said.

Armed with an assignment of benefits form and knowledge that state law requires insurers to replace cracked windshields at no out-of-pocket cost to policyholders, auto glass companies canvass parking lots for customers with cracked windshields, talk them into signing over their rights, then send inflated invoices to auto insurers and file lawsuits if the insurers deny or underpay them, insurers charge.

But Maitland-based attorney Imran Malik said the growing number of insurers willing to forge price agreements with the repair shops shows there’s no assignment of benefits abuse taking place. “When insurance companies realize their mistakes and make changes to the way they do business, independent owners are happy to work with them and do away with litigation,” he said in an email.

“We still have a long way to go toward fixing the Florida system and protecting consumers. Thousands of cases are still being filed, which is evidence [of] a real problem that must be addressed.” Logan McFaddin, Florida regional manager for the Property Casualty Insurers Association of America