The Florida legislature is taking another look at assignment-of-benefit (AOB) contracts by way of House Bill 541 and Senate Bill 1002. The former would bar vehicle insurance policyholders from entering into AOB contracts with repair shops, including auto glass repair and replacement shops. Its companion legislation in the Senate goes one step further by barring such contracts for re-calibrations as well.
Daniel Seltser, president of Signature Shield in Florida, says those proposals are harmful to Floridians and is asking for the industry’s support in communicating that point to the legislature.
HB 541, introduced by Rep. Philip Griffitts and filed on January 27, would prohibit policyholders from entering into such agreements starting with issuances on or after July 1, 2023.
“Any attempt by a policy owner to enter into such assignment agreement is void and unenforceable,” the legislation reads.
The legislation pertains to “inspecting, protecting, repairing, restoring, or replacing the motor vehicle or mitigating against further damage to the motor vehicle.”
Filed on Tuesday, February 21, Senator Linda Stewart’s (D – Orlando) SB 1002 would prohibit companies from offering “items of value” to customers for making insurance claims for glass replacements and repairs. It would also prohibit consumers from entering into assignment-of-benefit contracts for re-calibrations as well as auto glass repairs and replacements. There’s also HB 837, which addresses civil remedies with respect to insurance claims.
Insurance-related windshield repairs and replacements account for most of Signature Shield’s business, which Seltser argues is the case for many auto glass shops.
The impacts on auto glass shops aren’t the only concerns addressed by Seltser in his letter, however. He says the passage of such legislation would have negative implications on consumer safety as well.
“The AOB allows Florida drivers with comprehensive insurance to schedule the prompt repair/replacement with an auto glass shop in exchange for the post-loss benefits from the insurance policy,” he writes. “Glass shops will all but cease to provide the timely repairs to keep our roads safe without the payment protections afforded by AOBs.”
Furthermore, he argues that AOBs are not the cause of the increase in auto glass litigation in Florida. Seltser says the blame falls on insurance companies and their implementation of fixed pricing.
“In sum, prohibition of auto insurance AOBs for auto glass and ADAS calibration services will create more problems than solutions. Although drafted with the best of intentions, each of these bills will cause irrevocable harm to communities across the state,” Seltser writes. “Hundreds of small businesses will close, thousands will lose their jobs, and competition will dwindle. History has revealed time and time again that less competition ultimately leads to higher prices and inferior services. For the small businesses barely eked out of the pandemic intact, passing this bill will almost certainly be the final nail-in-the-coffin for independent glass shops.”
This is the first of a two-part story. The next installment will examine alternative points of view.