Farmers Suit a Scare Tactic?

Farmers Insurance Exchange, which operates in 41 states, has been very aggressive about promoting its efforts to stamp out fraudulent billing by glass shops. Its recent suit against Legacy Auto Glass International has received a lot of publicity.

But some in the industry are starting to question the motives of Farmers Insurance in filing this suit. Why, they ask, did the company pick a shop that has been out of business for some months, which they had to have known because they were not getting any claims filed from the company anymore?

The Farmers Insurance press material on the case makes it clear that it wants the ARG industry to know it is watching and actively seeking out instances of what it sees as fraud.

In discussing the Legacy Auto Glass suit Doug Ashbridge, director of special investigations for the company, stated "Farmers wants to not only recover the money taken and prevent further phony claims, but the goal is also to make others think twice before submitting false claims."

Sources familiar with the complaint question whether what is being alleged by Farmers Insurance is even fraud. They question the insurance company's method of determining what area rate should be paid for a job when so much of work today is mobile, particularly in California which is where the service in the suit took place.

For more information see GlassBYTES article (1/13/04) and GlassBYTES article Farmers Taking Action Against Windshield Claim Fraud (1/21/04).

No reproduction, in print, electronic or any form without the expressed written permission of
Key Communications Inc. 540-720-5584.