State Targets Steering with New Auto Glass Insurance Bill
A bill prohibiting auto glass insurance steering practices was introduced in February in the South Carolina House. If it becomes law, the bill would strictly regulate the language insurance companies and third-party claims administrators (TPA) could use with consumers.
If passed, the bill would prohibit insurance companies, agents, adjusters and TPAs from requiring policy-holders to use a specific auto glass repair or replacement shop.
Insurance companies and TPAs couldn’t “state that choosing a facility other than a glass shop participating in an automobile safety glass repair or replacement work program established by such company will or may result in delays in or a lack of guarantee for the automobile safety glass work.”
Insurers and TPAs would also have to clearly inform customers that they can choose any licensed shop they prefer. “In the initial contact with the insured, [a TPA or insurance] representative or claims administrator must state or disclose to the insured a statement substantially similar to the following: ‘You have the right to choose a licensed glass shop where the damage to your motor vehicle will be repaired. If you have a preference, please let us know,’” the bill says.
Insurance and TPA representatives would also be prohibited from scheduling appointments or even recommending an auto glass shop owned by the insurer, TPA or their parent companies. According to the bill, violations would be an “unfair trade practice under the South Carolina Unfair Trade Practices Act.”
Violators would also be subject to the administrative penalties outlined in the state’s insurance regulations. Based on those regulations alone, insurance companies or TPAs could be fined up to $30,000 and have their license to do business in South Carolina revoked.
The anti-steering bill has been referred to the House Labor, Commerce and Industry Committee.
“Claims Avoidance” Drove Lower Belron Sales, Officials Say
The D’Ieteren Group, which is the majority shareholder of United Kingdom-based Belron, announced its 2024 financial results on March 10. Executives reported that Belron’s North American results remained relatively flat. Safelite comprises Belron’s business in the region.
According to the D’Ieteren Group’s financial report, Belron had an almost $0.6 billion profit before tax in 2024 and just over $7 billion in sales. The D’Ieteren Group’s chief financial officer, Edouard Janssen, told investors that Belron’s North American sector only delivered 0.2% organic sales growth.
“There was some claim-avoidance behaviors that we saw in some consumers,” he said in an investor call, explaining that higher auto insurance premiums have been driving customers to avoid making claims that would drive up insurance costs. This means many consumers were using cash.
“The work may not have come to us because we’re stronger with insurance work than with cash,” Janssen said.
Multiple investors on the call expressed concern about this phenomenon, and Janssen told them D’Ieteren is tracking insurance prices in North America, and the group doesn’t anticipate premiums climbing anymore.
State Farm Shifts California Fire Costs to Auto Insurance Arm
State Farm plans to absorb the cost of California fire property damage into its auto insurance arm, officials say.
The insurer is trying to get California Commissioner Ricardo Lara’s approval of an interim rate increase after paying out over $1 billion in California fire-related insurance claims. Officials say State Farm’s property and home insurance arm, State Farm General Insurance Company (SFG), has already paid about $1.75 billion on 9,500 claims for the California fires alone.
“State Farm General will ultimately pay out significantly more, as collectively these fires will be the costliest disasters in the history of State Farm General,” officials say.
The interim rate increase won’t go toward the California fire claims. Instead, officials say State Farm Mutual Automobile Insurance Company “serves as the primary reinsurer for SFG and will assume the majority of losses related to these fires ceded by SFG under its reinsurance contracts.”
State Farm is asking for a 22% average interim rate increase for California homeowners to “restore the company’s financial strength.”
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