Three’s A Crowd: Experts Weigh In On TPAs
Many auto glass shop owners have expressed increasing frustration with third-party administrators (TPAs), including the language TPA representatives use to direct customers.
One source, who prefers to remain anonymous for fear of retribution, offers unique insight having worked at a large company that owns a TPA and an auto glass chain that did not.
He says that TPAs have the best luck convincing customers when they do not have a preference for whom they use for their auto glass service. He’s found the key to retaining the customer is having an excellent sales team set their preference beforehand so that they want to give business to your company whether they’d get a warranty through an “in-program” company or not.
Addressing a scenario in which a collision repair shop claimed it lost a customer because of a TPA, Kristen Felder of Collision Hub pointed out that the language the TPA used was technically within the bounds of the insurer’s policy.
“It’s not steering,” she says. “It’s an ‘accurate’ statement of their policies.”
Another strategy to keep the job at your shop is to educate customers about the issue. Patricia Smiley, president of Quackt Glass in North and South Carolina, recommends this method.
According to Smiley, Quackt Glass shops are “preferred” or “in-program” for many TPAs, but she’s still had TPAs recommend customers go elsewhere. Safelite Solutions is one of the most common TPAs, so she uses them as an example.
“Often their script will include, ‘Well, we’ve got a Safelite shop near you that we can get you scheduled with,’ while we’re on the phone with the customer or with the customer physically in our presence,” Smiley says. “That’s when we’ll have to step in and very nicely state, ‘This policyholder already has a shop of choice.’”
Smiley says Quackt Glass informs customers that they aren’t required to choose a shop a TPA recommends for their insurance claim to be processed. This goes double for South Carolina, where legislation gives customers the right to choose.
Smiley says it’s also crucial for a customer to understand what a TPA is.
“I basically explain the way that it works,” she says. “So I’ll say, ‘They’re a glass company, … , but we call into them to get our claims processed,’”
Dismissal Stands in State Farm Vehicle Value Suit
While admitting she didn’t properly consider State Farm’s arguments, a federal judge upheld her denial of State Farm’s proposed lawsuit dismissal.
In December 2023, State Farm asked an Illinois District Court to dismiss a lawsuit against the company for allegedly using an illegal formula to calculate the value of a totaled vehicle. At the time, Judge Virginia Kendall had denied the dismissal.
According to court documents, she said the defendant should have brought up the grounds for dismissal early in the case to avoid delaying proceedings. State Farm asked the judge to reconsider, claiming she had previously allowed them to submit additional arguments. Kendall acknowledged their point but said her denial still stands.
“Upon a review of the record, the Court did err in denying State Farm’s arguments on procedural grounds and now reconsiders State Farm’s fraud arguments,” court documents say. “But even upon their merits, State Farm’s motion to dismiss is still denied.”
Plaintiffs from multiple states first filed the suit in 2022. According to court documents, they claim that State Farm misled them by saying it would pay “the actual cash value of the vehicle minus any applicable deductible” when the company used a formula to calculate the worth of their totaled vehicles.
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