South Carolina Auto Insurance – According to critics in the insurance industry, a new bill that would provide consumers with a larger number of options for the prevention of what are being referred to as unfair trade practices by the bill’s sponsor, could lead to higher auto coverage premiums.
The primary sponsor of this bill regarding windshield replacements is Senator Jake Knotts, R-West Columbia.
Just as HMOs give preference to certain doctors, auto insurers have their own networks of repair shops that they prefer, and to which they send their customers. These repair shops have agreed to offer those insured customers discounted rates, which are paid by the insurance companies, in exchanged for the referrals.
In order to minimize the paperwork and time it takes to make a claim, some windshield replacement companies can function as third-party administrators. Therefore, some policyholders with large national insurance companies need only call a single toll-free number in order to obtain a windshield replacement. It is the third party that handles these calls, not the insurance companies themselves. Then, the third party recommends the businesses that can complete the work and they submit the paperwork to the insurer.
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According to Senator Knotts, this is the center of the problem, as third parties are able to direct policyholders to their own windshield replacement businesses. The new bill would label this activity as an unfair trade practice.
Senator Knotts said that it is alright if a customer doesn’t have a certain windshield replacement company in mind and asks for a recommendation from the insurer. However, he added that “But I think it’s my right as a customer to choose my local glass person that I want to do it,” and that the new bill will eliminate this attempt to establish a monopoly.
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