The Auto Channel
The Largest Independent Automotive Research Resource
The Largest Independent Automotive Research Resource
Official Website of the New Car Buyer

Farmers Sues Auto Glass Business for Submitting Phony Windshield Claims

LOS ANGELES--Jan. 1, 20053, 2005--Farmers Insurance Exchange has begun serving civil summons and complaints upon a nationwide auto glass company and its president, accusing them of taking part in a scheme designed to defraud Farmers and its policyholders. The civil complaint, which is similar to prior successful lawsuits against body shops who submitted false insurance claims, seeks not only damages for the fraud committed, but seeks injunctive relief, where the courts are asked to order a halt to these deceptive practices.

The lawsuit alleges a pervasive scheme where the glass company deliberately over-billed Farmers for services on 1,211 occasions. As alleged in the complaint, the defendants created sham offices in remote areas, so they could manipulate their billing. Under national guidelines, automobile glass claims are paid at a premium if the shop is located in less densely populated areas. The complaint further alleges that Defendants created documentation that their shops were located in the remote areas, so they could charge significantly more.

"This is a national issue, not a local problem. By secretly manipulating the system, this type of scheme leads to millions of dollars in false claims. This is not simply a billing error; our Special Investigative Unit has developed concrete evidence that this was a deliberate effort to defraud Farmers and its policyholders," said Doug Ashbridge, Director of Special Investigations. "When faced with evidence of fraud, Farmers will take proactive measures to stop such scams. 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. If you try to submit fraudulent claims, you risk being sued for your actions. This is part of our commitment to our policyholders to offer the best product at the lowest premiums possible."

Farmers developed evidence finding that at least 99% of the claims submitted by DKN Industries, Inc. DBA Legacy Auto Glass International and its President, David Nibarger, involved fraud. Farmers' Special Investigations Unit interviewed witnesses and documented the fraud. The locations where Legacy Auto Glass claimed to have shops were found to be shams. In one location, there was no glass business, but simply a painted advertisement on the side of another business. The second location was merely storage space. No glass work was done from these addresses. By pretending to have shops at these addresses, defendants were able to falsely charge more for their work.

Mr. Ashbridge went on to state: "Farmers has teams that are designed to detect precisely this type of fraudulent activity. Similar investigations are proceeding nationwide in an attempt to curb these windshield scams."

<-templates/news.footer"-->