Open letter to Surperintendent of Insurance for New York State
Jan 26, 2009
Below is an open letter sent to Eric Dinallo, Surperintendent of Insurance for New York State from Michael P. Russo, controller for Thru-Way Autoglass. Though sent as a private citizen, Mike Russo also serves on the IGA's Board of Directors.
January 26, 2009
New York State Insurance Department
Mr. Eric Dinallo, Surperintendent of Insurance
25 Beaver St.
New York, NY 10004
Dear Superintendent Dinallo:
I have read the news release of January 21, 2009 from your office as it pertains to the investigation of insurers and the auto body repair industry. Let me begin by saying the points raised and the conclusions reached are very troubling to me.
I am the controller of Thru-Way Autoglass Distributors, Inc., located in Syracuse, New York, and we have been in business since 1957. We pride ourselves in serving the motoring public in need of auto glass repair and replacement services with uncompromised quality and service.
While the scope of your investigation was limited to the auto body industry, many of the issues addressed parallel those that we are confronting within the auto glass repair and replacement industry. Therefore, I would like to address some of the points raised by your investigation and integrate them with the auto glass repair and replacement industry.
Consumers do have the right to choose where they would like to have their cars repaired and therefore, insurance companies should not have the right to discuss any matters with them that may cause them to reconsider that choice. Consumers are intimidated by their insurance companies with concerns from increased premiums to cancellation of policies. While the auto glass industry is excluded from Section 2610 of the insurance law, we lose customers every day to tactics utilized by third party administrators that discourage our customers from having their vehicle serviced in our shop. A few years back, we had a policyholder remove his vehicle from our parking lot after talking to a third party administrator while reporting a claim.
Within the auto glass industry, consumers do have the right to choose. However, because auto glass is excluded from Section 2610 of the insurance law, insurance company representatives can recommend alternative service providers. Since auto glass is excluded, the right to choose is inhibited during the claim reporting process when the customer service representatives of third party administrators (TPA) advise the claimant that they may incur out of pocket costs or in many cases, some other untruth. You may be aware that the largest third party administrator (owned by a foreign corporation) owns the largest chain of auto glass repair and replacement shops in the United States. Our customer must call our competitor to report a glass claim. Therefore, that TPA has a financial incentive to influence the policyholder to use one of their own shops.
Once the policyholder learns of the “sway” points raised by the TPA, they reconsider taking their vehicle to the original shop of their choice, and many times do. Therefore, allowing the insurer to discuss any matters that may cause a policyholder to second guess the shop of their choice should be disallowed. The insured should be allowed to report the claim, select the shop, and proceed to have their vehicle restored without any feedback by the insurance company. Only then will the insured have the true right to choose, consistent with New York State Law.
Superintendent Dinallo, consumers are being harmed and possibly defrauded. The insurance company is not the customer and should not be privy to commerce transacted between the buyer (policyholder) and seller (shop). The extent of the insurance company’s involvement should be limited to paying the bill. Perhaps full disclosure regarding pricing caps should occur at the time the policy is purchased, so the insured does not learn about it at the time they file a claim, especially from our competition.
For your review, I am enclosing a copy of “Don’t Get Steered,” a publication produced by the Independent Glass Association. This publication was produced by the IGA at the urging of Mr. Ralph Nader who labeled the current state of affairs within the auto glass repair and replacement industry as “bizarre.”
Mr. Dinallo, we appreciate the efforts taken by the New York State Department of Insurance in the name of protecting consumers. Whether the consumer is enlisting the services for auto glass or collision, they want to be confident that the repair is safe.
Thank you for your time and consideration. I would welcome the opportunity to meet with you or a representative of your office to discuss matters within the auto glass repair and replacement industry.
Sincerely,
Michael P. Russo
Controller
cc: Honorable Joan Christensen, NYS Assemblymember
Honorable John DeFrancisco, NYS Senator