Questions raised about the limits on a repairer’s ability to assume the role of the insured in handling an insurance claim under Florida law will not be resolved, with the settlement of a Lawsuit in 2018 by Allstate Insurance against Auto Glass America.
The settlement between the insurer and the store was reached on September 29 after an informal eight-hour conference in U.S. District Court for the Central District of Florida. The terms of the settlement have been disclosed and a redacted version of the transcript is due by December 20. The court has since dismissed the case.
None of the attorneys representing the plaintiffs or defendants responded to an email from Repairer Driven News seeking comment.
In its initial lawsuit, Allstate claimed that Auto Glass America (AGA) of Florida and its owner, Charles Islay, had devised and implemented “a large and complex plan” that interfered with the carrier’s contracts and led to the unjust enrichment of the store.
Allstate alleged that AGA “pressured” its policyholder to hire the store for windshield replacement, obtained Assignments of Benefit (AOB) from policyholders, submitted invoices to Allstate for amounts “Excessive and unreasonable” and has filed over 1,400 lawsuits since January 1. , 2015, to recover these amounts in “an effort to illegally obtain payment of its excessive and unreasonable charges from Allstate.”
“When Allstate pays AGA amounts equal to or greater than competitive and prevailing market rates for windshield replacements, but less than the total amount of AGA’s invoices, AGA sues Allstate in small court. claims to recover the remaining amounts of its sky-high prices, “Allstate wrote.” These lawsuits designate Allstate’s policyholders as cedants without the policyholders’ knowledge or their consent, “the insurer said.
The store acted with the knowledge that its charges “would far exceed competitive and prevailing market rates for them and that Allstate was not required under its auto policies to pay such inflated amounts,” he said. asserted the lawsuit.
Allstate said that between January 1, 2015 and September 30, 2018, AGA’s bills for windshield replacement averaged around $ 900, more than double the $ 350 average submitted by other Florida glass suppliers during the same period. He also argued that AGA opted for replacement in all cases, “when at least some of the damaged windshields could have been repaired properly and safely at a much lower cost”.
Allstate also alleged that AGA violated its contractual agreements in tort by preventing it from inspecting damage, exercising the appraisal clause and failing to report claims to the carrier before making repairs. He wrote that Auto Glass America knew the terms of the policies but blocked them anyway.
AGA denied the allegations and stressed in a February motion to dismiss the lawsuit that out of “1,185 cases identified to date, approximately 600 have been resolved on terms favorable to AGA and the rest remain unresolved.” In other words, all cases so far have been resolved in favor of the store, without going to trial.
“Overall, AGA is not aware of a single instance in which Allstate has responded to a complaint or made affirmative defenses or counterclaims (mandatory or not), although it clearly had that option. . Instead, Allstate settled for a once defeated settlement on its reject / review motions, ”AGA lawyers wrote. Likewise, Allstate has not filed any answers, defenses or counterclaims in the outstanding cases, of which more than 150 involve the same under-salary scenario described above and the remainder involve the failure of Allstate to pay interest on appraisal indemnities on older claims on which AGA has voluntarily submitted to the appraisal process.
In the context of the non-DRP insurer-client-store type relationship, there is in fact no relationship between the insurer and the store. The insurer owes the customer, and the customer owes the shop. The insurer and the customer have a contract, and the store and the consumer have a contract. So when an insurer refuses to pay the costs of a repairer’s bill, they are in effect refusing to reimburse the consumer – who still owes this item to the store and in theory cannot get their vehicle back until the bill is cleared. not paid.
As part of the assignment of benefits, the store can step in to take on the role of the insured, assuming the capacity to recover whatever the insurer is considered by the courts to owe to the policyholder. Thus, the customer does not need to go to court to recover the money he owes to the repairer.
Florida law allows a successful assignee to recover legal costs, while insurers do not. This has resulted in a boom in AOB auto glass litigation, what the American Property Casualty Insurance Association calls “AOB abuse.”
In a court record, Allstate claimed that between December 20, 2014 and July 31, 2020, it paid a total of $ 2,935,488.20 in legal fees to AGA and its attorneys, as well as to Broward Insurance Recovery. Center and his attorneys, who have secured assignments. AGA’s claims and subsequently sued them. This amount exceeds the $ 2,382,246.43 that would have been paid on AGA invoices.
The settlement ends two years and 9 months of litigation that saw 343 separate filings in court, without resulting in a decision that could guide stores, insurers or customers.
Featured Image: Settlement means a lawsuit in Florida over auto glass benefit assignments will not go to federal court. (dmf87 / iStockphoto)
Through the assignment of benefits, the store can step in to take on the role of the insured, assuming the ability to collect whatever the insurer is considered by the courts to owe to the policyholder. miljko / iStockphoto
Allstate sues auto glass store in Florida, reports success in AOB