Are you ready to trust your credit score to an auto glass technician? Your credit rating and future costs are at stake when you authorize an unknown service person to fix your windshield and “handle” the comprehensive insurance paperwork.
Like most of us, you are careful with items that can lower your credit score, but when you assign someone to act on your behalf for insurance claim benefits, you might be making an “assignment of benefits” blunder that can damage your financial future.
Having a technician “handle the insurance paperwork” may sound like a time-saving decision, but their interests are not always the same as your interests. You want the repair done quickly and at low or no cost to you. The glass technician wants a substantial profit for his repair business. The insurance company wants the repair done at reasonable cost. There may be a way to make progress on all three goals, but it is not through an assignment of your insurance benefits.
If the technician and insurance company fail to agree on a price, the technician may sue the insurance company, turning a few hundred dollars of claim into a court settlement with thousands of dollars in attorney costs. Clearly, a settlement in court is worth avoiding, but favorable litigation rules leave little incentive for the glass technician to settle for a reasonable cost. Remember, you will have no say in the settlement amount once you have assigned your benefits.
However, the eventual settlement can become a financial disgrace when you next apply for auto insurance. It will tell the insurance underwriting departments that you acted in a manner to increase an insurance company’s cost of settling a claim. You may get a repair done for zero cost this year, but you are likely to pay for it over and over in years to come.
There is a particularly loathsome version of the assignment of benefits practiced by some auto glass shops. In those, for committing to an assignment of benefit, the customer is offered a pre-paid credit card or a similar bribe. From that point on, the settlement proceeds at a cost increased by the amount of the customer bribe.
The Florida Justice Reform Institute issued a study revealing that 90 percent of auto-glass assignment of benefit lawsuits have come from just 15 companies. To the extent that bribing customers can be thought of as a crime, this looks more like organized crime.
The good news is that two Florida senators introduced the Motor Vehicle Insurance Coverage for Windshield Glass legislation to fix this problem. The bill promises to ban these customer bribes, as well as set up a pre-lawsuit process between repair shops and insurance companies. That mediation may help avoid the costly attorney fees that are driving up the cost of repairs that should be simple.
Florida has among the highest automobile insurance rates in the country, and it seems every time you turn around a handful of attorneys have figured out another way to profit on the business of “sue and settle.”
Motor Vehicle Insurance Coverage for Windshield Glass looks like a welcome aid to Floridians.