TALLAHASSEE – A bill aimed at putting the brakes on excess litigation related to alleged fraudulent practices in the auto glass industry failed to pass a key Florida Senate panel earlier this month.
Senate Bill 312, authored by Sen. Linda Stewart (D-Orlando), failed to pass the Senate Banking and Insurance Committee on a split 4-4 vote on Dec. 10. Stewart’s bill would have ended the practice of using gift cards to entice consumers to sign over their auto insurance benefits to third parties in return for quick repairs to windshields.
Insurers have complained that such assignment-of-benefits (AOB) practices have led to inflated claims from auto shops and increased civil litigation and expenses to resolve disputes.
“I think there was a lot of misinformation given out at the hearing,” Stewart said. “... That contributed to the way the vote was going even though I made a lot of amendments to take out some of the information (opponents) were most concerned about at the last meeting.”
Stewart described SB 312 as a consumer bill with common-sense provisions, such as requiring that AOB forms have larger type and that consumers be informed by repair shops about whether replacement windshields for newer cars would be calibrated so that safety sensors continue to operate.
“Hopefully, we can get this heard in the House, or we will get this heard again next year,” Stewart said.
The deadline for filing new bills in the legislature is Tuesday, Jan. 14.
Ashley Kalifeh, a consultant with the Florida Justice Reform Institute (FJRI), said SB 312 contained elements of property-insurance AOB legislation passed earlier this year.
“Sen. Stewart took some of the noncontroversial provisions of the property AOB bill, and chief among those noncontroversial provisions are that customers get an estimate and that they’re notified that they’re signing an assignment of benefits,” Kalifeh said.
Many consumers who signed AOB forms were later surprised to see their names attached to lawsuits against insurers, she said. Stewart’s bill would have given insurance companies notification about the repairs so that they could work to resolve windshield issues before a lawsuit is filed, according to Kalifeh.
“It’s disheartening to see something that had so much support on the property side fail,” she said.
A recent FJRI report found that auto-glass AOB lawsuits in recent years have been filed by a small number of law firms, with most of the litigation taking place in Orange and Hillsborough counties. Such lawsuits have resulted in higher auto insurance premium costs for Florida drivers, the study said.
The Florida Justice Association called the Senate panel’s vote a rebuke of special-interest attacks on the civil justice system.
“The Senate Banking and Insurance Committee dealt a potentially fatal blow to auto glass replacement legislation,” the trial attorney group said in a Twitter post.
Some independent auto-glass shops in Florida have complained that insurers have been lowering reimbursement rates for windshield repairs in recent years and that the AOB claim system is needed to ensure the shops are not being lowballed.
“Their argument is, if I understand it correctly, that you should pay me more even though an insurance company can get the same thing for a better price,” Kalifeh said.
Insurers often turn to the auto-glass company that dominates the market, Safelite, for discounted windshield repairs. The companies are simply looking to get quality service and value at the best price, Kalifeh said.
The Consumer Protection Coalition, which is affiliated with the Florida Chamber of Commerce, praised Stewart’s work to advance SB 312.
“While we are grateful for Sen. Stewart’s efforts and that the Senate Banking and Insurance Committee took up the issue … we are disappointed they did not approve much-needed consumer protections and disclosures which could go a long way to ending AOB abuse in auto glass,” chamber Spokeswoman Edie Ousley said in a statement. “We remain optimistic these provisions will ultimately pass the full legislature in 2020.”
Bad actors in the state continue to take advantage of unsuspecting consumers by enticing them to seek windshield repairs when such repairs are not needed, according to the National Insurance Crime Bureau. And Florida auto-glass AOB lawsuits are on track to reach 17,000 by the end of 2019, according to the FJRI report.