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Industry Reacts to State Farm Changes
April 13, 2009

The recent changes to the State Farm Offer and Acceptance program announced last week have been on the minds of many in the days following since the announcement. Late last week, the Bloomington, Ill.-based insurer announced that effective April 16, effective April 16, the company's policy will now read: "You agree that replacement glass need not have any insignia, logo, trademark, etching, or other marking that was on the replaced glass."

The possible, resulting out-of-pocket charges that insureds may incur if they choose OEM glass are one concern.

"I think customers will lose their minds when they realize this," said one shop owner who wished to remain unidentified. "I would expect a lot of upset customers screaming to their agents, the agents getting upset and then, they will get told no by Bloomington. I would expect some to defect from State Farm as a result of this."

Neil Duffy, owner of Auto Glass Menders in San Jose, Calif., agrees-noting that the customer's outlook is his biggest concern.

"Every owner or installer out there has his or her own opinion on the subject of OE versus aftermarket," Duffy says. "My position starts with asking the customer what they want first. Pleasing my client becomes my primary concern." (CLICK HERE to read a blog from Duffy on this subject.)

Clyde Stephens, owner of Visions Auto Glass in Perham, Minn., suspects there are many customers who will continue to request glass with particular logos, too.

"If the truck is only a couple of years old and it has a super-duty F-150 logo in the third-fit visor, [the customer is] going to want it put back just the way they had it," he says.

He adds, "For a lot of people it won't matter. But there's going to be the few rare occasions where the person has an Audi, Lexus or Mercedes that's 3 or 4 years old and they're going to want it, and it's the consumer's right to choose what he wants."

Others have guessed whether other insurers will follow suit.

"Well, if you look back at when State Farm stopped paying for chip repairs, all the hype was that the insurance industry as a whole was going to stop paying for chip repairs," says this shop owner. "You can see it's been a few years and no one has followed suit on that one. I think that on this topic of dealer glass, you will see more people lean toward this. I would expect the next one to follow through on this to be AIG (21st Century) as they are already having financial problems."

At press time, State Farm officials had not responded to repeated attempts to be reached by AGRR magazine/™ for comment on the new policy.

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