It\'s time

[StarQuest]

Time to do what most of you would ask? It's time to get ready for additonal insurance work. I recently received a 2005 NAGS book and from what I've seen so far indicates repair will dictate insurance claims this year. Why? Because the new pricing structure will eliminate high discounted deductibles on replacement.

Good for repair and very bad for replacement;)

[paintlessplus]

Good post Starquest- nice to have someone who knows all areas of the glass biz onboard. For those of you who don't quite understand the relevance of this post, the insurance industry has slowly and steadily over the years put a price cap or ceiling on what independent replacement shops can charge to install a windshield. What was once a super lucrative business is now a competitive and cut throat one. With the prices that are dictated now by the insurance companies, there is very little, if any room for trying to save the customer his deductible on replacements. The bottom line is if your customer waits to get a chip fixed.....I hope his deductible is small.

[Lee]

This might be a two edged sword here. I also have a copy of the new NAGS prices and if this goes into effect there will be a lot of people out of work. NAGS is taking the barganing power of higher prices away from the shops that replace glass. This will push them into repairing glass and the people that are let go will be looking into it also. Here in So Cal there are areas that have nothing but auto glass replacement shops for blocks(Mission Rd. in LA, Alameda in So Gate). The lowest price gets the job (Imagine if repair was like this). The Insurance Co's have been playing nice with the Repair people because repair saves them $. If there are more repairers out there the Ins Co's could change the rates they pay. I don't think it will go up. So hang on it's going to get bumpppppppppppy.

[maxryde]

Interesting thread!! I recently had a customer who came through that went to a local replacement shop to get a replacement shield. He inquired about price and was given a quote and proceeded from there. He allowed the shop to bill his Ins. Co. and they in turn sent him a notice reflecting the price charged by the glass Co. It was very much higher than the quote given for a cash sale (like 4 times the amount!!) He was very upset and confronted the store OWNER about the discrepency. The owner said they just charged what the Ins. Co. would pay. He, the customer told the owner off and now swears he'll never do business with that shop again!! Anyone on the forum had an experiance like this? / opinions? I believe this guy was telling me the truth but it still leaves me wondering... Scott

[mafsu]

I don't think it unusual. I charge the insurance company what they will pay for a repair. Though I doubt I would have many takers on a cash job for $60.

[StarQuest]

Lee,

I suppose some could look at this as a double edge sword. Could this possibly lead to more competition in the repair industry? I'm sure it will. I personally welcome that competition as long as we're all playing in a game with the same set of rules. Up until now we haven't had that opportunity. Mainly because either the glass owned networks have been steering jobs away or your local shops been waiving up to $100-$150 off deductibles and replacing 4 out of 10 shields that could have been repaired. Just wait and see the future reaction from consumer when they suddenly find out they'll have to pay a deductible for glass replacement;) That in itself should boost our insurance repair ratio by 15-20% or higher. Which for many of us could yield an extra $10,000-$15,000
per year in sales. Wouldn't that be nice?

[0hunter]

How much affect will this change have on areas like Phoenix, AZ, where a large percentage of people have full glass coverage?

[Coitster]

First off let me clarify something. There are two different prices in the replacement industry. The cash price and the insurance price. Absolutaly a company should charge an insurance company more then just a straight cash sale. The reason is the insurance company is keeping the money from the glass company for up to a month a times. The glass company has to play the recievable game. As for cash quotes, this can sometimes get obsurd. For example is someone paying for an aftermarket glass or a OEM glass (Original Equipment Manufacturer).

The trend in the glass replacement now is to get a large warehouse and buy pallets full of glass. I am not talking 1 shield at a time, I am talking thousands. They stack these things to the ceiling and they get ussualy substandard glass from overseas. So those are the companies that are selling glass for dirt cheap sometimes, they will even sometimes sell glass at a lose to just get rid of inventory. So yes, if you are doing a job for an insurance company you are going to charge more. They are after all the ones who set the price of what they will pay. Gone are the days where you just bill an insurance company for whatever you want to bill them for.
David
Coitster

[Lee]

It used to be NAGS set the list prices and labor times. The shops and ins cos agreed to a discount on parts & a labor rate. The shops and the distributors agreed on a discount factor for glass. You did the job and sent the ins co a bill(direct billing). You got paid and paid your costs and made a profit. Now the insurance cos want to keep all of their money. With the NAGS pricing now a glass shop can still make a fair profit on most jobs. When they change the pricing ,glass shops will have to charge enough to be profitable so they can stay in business. The billing will have to go to a cost plus plan. Cost of part + markup+labor+sealant+mlds/clips. Nags will go away because the glass manufactures will not follow their lead. The cost of making a piece of glass will not go down by 2/3 if the list does. The distributors will just change the discount factor so they can still make the same $ if they use NAGS. If all of the glass shops said no to the ins cos absurd pricing they could negotiate fair prices. Why should they set the prices? We all know they don't want to pay anything, ask around a few body shops. But as usual someone will agree to their pricing. As to substandard glass PPG, LOF/Pilkington have been latley bringing in glass with made in China labels. FYG is standard on the new GTO. The manufs are going to the countries with the lowest labor costs. Also the manufacturers are selling to nonmainstream distributors and they are undercutting the mainstream distributors. PPG,Mygrant and Pilk have all adjusted their pricing to compete with them. Glass has never been so inexpensive. So hang on it's going to get bumpy. Thanks for letting me vent.
Oh yah the ins cos want all of the money so they can but a new 50 story building the old one is dirty.

[StarQuest]

David,

Could this explain why insurance company's want out of the glass biz and are lowering pricing? The actually reason why most glass shops offer two different prices is because with a insurance replacement claim they already know they'll have to waive part of or all of the deductible to get the job sold. Really has nothing to do with waiting 30 days for payment from insurance. They simply subtract $100-$125 to cash customer from what insurance would pay prior to waiving deductible. Common practice by many glass shops is to always make at least $90-$125 profit on every replacement. Regardless if it's through insurance or cash.

OEM glass vs. Aftermarket glass? Because I still replace glass daily I can honestly say there's really not much difference between OEM these days and aftermarket. All aftermarket glass can't be labeled as cheap and lower in grade. They're all subject to the same US required standards and test. This may be a shock to you but one of my aftermarket suppliers actually manufactures glass for one of the big three and just stamps the manufactures name to it! Is it OEM? No.... but sure looks like it, so what does that tell you? I personally always give the customer a choice before installing any shield. If they want OEM....I give it to them. Price difference is normally only $15-$30. Some will pay for it and others simply don't care as long as I warranty it. I personally haven't had one aftermarket shield fail so far;)