Tuesday, December 27, 2005
Busted: State has 360,000 windshield claims a year
Broken windshield glass - and the fraud that often surrounds its repair - drives up your car insurance
B. POOLE
Tucson Citizen
More than 360,000 claims a year for chipped and broken windshields are one reason Arizona car insurance premiums average about $115 more per year than the national average.
Arizona has the nation's highest rate of insurance claims for glass, and for at least a decade has been one of the worst states for auto theft.
Both factors drive up the cost of insurance, said James Frederikson, director of the Arizona Insurance Information Association, an industry-funded organization that informs the public on insurance issues.
"If the theft issue and the glass issue were resolved, chances are we would be right at the national average," Frederikson said.
In 2003, the latest year for which the National Association of Insurance Commissioners has statistics, the national average for car insurance was $940. The Arizona average was $1,055. New Jersey had the highest average at $1,365, and Iowa had the lowest at $679, the NAIC said.
Laws, theft keep rates up
About 360,000 auto glass claims are filed in Arizona every year, leading to a rate 61 percent higher than the national average, Frederikson said.
Statewide, the claims total $75 million to $100 million annually, said Allstate spokeswoman Pat Elliott.
Between 4,000 and 5,000 times per year, the staff at Maverick Glass, 7381 E. Broadway, strips off the trim and yanks out the cracked windshields of Tucsonans' cars and trucks, said manager Steve Hoeffner.
"About 80 percent of our business is insurance-referred," he said.
Several factors, including state laws, help create the huge demand for new car windows here.
Fraud in the auto glass industry - which Elliott called "a major, major problem" - is a key contributor to the cost to consumers, in part because Arizona law lets glass companies bill insurance companies without customers seeing bills, she said.
"They gain access to the customer's insurance information, then they may bill for repairs or services that are not performed," she said.
The best way to avoid fraud when dealing with glass companies is to get a referral from an insurance agent, Elliott and Hoeffner said.
"The agents are going to know who the reputable companies are," Hoeffner said.
State law also requires insurance companies to offer no-deductible glass replacement, which many drivers have as part of their comprehensive coverage. The "free" glass lures customers, though Elliott warns that we all pay in the end through higher premiums.
Another factor is our busy construction industry. States with a lot of construction - which a growing Arizona has - have more glass claims than states with less construction, likely because there are more trucks on the road kicking up rocks and more rocks to kick up from construction sites, Frederikson said.
These factors combined with glass company marketing help keep the customers coming back for more, Frederikson said.
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