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GlassChoice Launches Petition Drive for Law To Prohibit Insurance Steering

21 October 1999

GlassChoice Launches Petition Drive for Law To Prohibit Insurance Company Steering
    FARMINGTON HILLS, Mich., Oct. 21 -- GlassChoice,
an association of automobile glass shops, has launched a statewide petition
drive seeking legislation to guarantee Michigan automobile owners the right to
select auto glass repair shops of their choice without any steering by their
insurance company.  Steering is the process of diverting consumers to
particular repair shops.
    Thus far, some 38 states in the United States have anti-steering bills on
the books or have issued guidelines banning steering practices.  Michigan
is one of the few who does not.
    Attorney Jay Schwartz of Farmington Hills, who represents 48 auto glass
repair shops throughout Michigan, said, "It would be in the best interests
for the citizens of this State to have legislation which would prohibit
insurance companies from steering consumers to specific facilities without
the consumer being aware of the totality of the circumstances."
    Petitions will be circulated throughout the State.  Its preamble simply
provides that Michigan citizens should "be able to freely use the
automobile glass repair facility of their choice."
    The petition asks the Michigan Legislature to enact a law which would
guarantee that insurance companies licensed to operate in Michigan, or their
agents:
    -- Shall not restrict policy holders' access to auto glass repair or
replacement facilities.
    -- Shall not require that automobile glass repair or replacement work be
performed by a particular facility, individual or business as a condition
of paying a claim.
    -- Must disclose to policyholders that they have the right to choose a
glass shop of their choice.
    -- May not intimidate, coerce, threaten or in any way try to divert or
steer claimants to a particular shop.
    -- Must promptly provide payment to the facility based on a fair and
reasonable market value (one that is applied to all glass shops).
    In an ironic twist, Minnesota based Harmon AutoGlass has specifically
cited the lack of a Michigan law in this area to assist it in a lawsuit
pending in Wayne County Circuit Court.  The lawsuit involves a challenge by
numerous Michigan auto glass repair shops and two Michigan consumers to the
implementation of an agreement between AAA and Harmon.  In exchange for
operating AAA's call
center and rendering other services, AAA gave Harmon the right to refer a
specific percentage of AAA vehicle glass repair or replacement claims to
its own (Harmon AutoGlass) shops.  In a court document, Harmon claims:
    "While over 30 States have adopted statutes that allow insureds a right to
choose the glass company that repairs or replaces the individual's auto
glass, the State of Michigan has not enacted such a statute.  Consequently,
insurance companies operating in Michigan, including AAA Michigan, are not
obligated by statute to provide a right to choose an automotive repair
replacement shop to their insureds."
    The lawsuit seeks to halt deceptive trade practices and protect the
consumer's right of choice.  According to the lawsuit, when a consumer
calls AAA with a glass claim, the call center routinely recommends Harmon
AutoGlass as the repair shop to be used.  The call center representative
does not inform the caller that they are a Harmon employee.
    Media outlets in the State, including one investigative reporter who was
actually recommended by the AAA/Harmon call center to one of Harmon's
shops, have reported on this practice.  Reporters and staff members from
the Grosse Pointe News made numerous calls to the AAA/Harmon call center
and were consistently referred to Harmon repair shops.
    Petitions may be picked up at independent glass shops throughout Michigan
or signed directly over the internet by going to the web site
http://www.glasschoice.com