Recently, in response to a request for a short payment that I had initiated, the insurance company representative responded that the company already pays a “competitive price” for auto glass replacement and could not justify paying any more. I thought to myself, “Interesting, the insurer pays a competitive price.”
But just what is that “competitive price” to which he refers and how is it determined? Does “competitive price” mean paying the lowest price for “like kind and quality?” In other words, there is no apparent difference in the quality of the glass and the level of service provided by Shop A and Shop B, but Shop A charges less, so Shop A has set the “competitive price.” Well, I guess I could swallow that as being reasonable. But we certainly know this not to be the case.
And then another question comes to mind: why is the “competitive price” established by this particular insurance company so much less than the “competitive price” established by other companies? Are they operating within a different marketplace? Do they use different variables in calculating this “competitive price?” Throw standardized pricing and standardized labor hours for each job into this mix. Does a certain percentage off a list price allow us to conclude that there is any industry confidence in the established list price? Does a certain figure per labor hour allow us to conclude that there is any confidence in the book times established for each installation? All valid questions, don’t you agree?
On November 3, glassBYTEs reported that a shop’s AGRSS registration absolved it for removing a windshield and not reinstalling a new one because it would not be safe to do so. The article reported that the windshield that was removed was installed with bathtub caulking. Imagine that, installed with bathtub caulk. And if this was an insurance job, just how much do you think this shop was paid? Without a doubt, and let’s say it together, the prevailing “COMPETITIVE PRICE.” So it was not only a creative install, but in the eyes of the insurance company, a competitive install. I will go one step further and bet that this shop has its own certification program and is subject to self audit.
Folks, let’s get real. This is not an isolated incident. This happens frequently. However, we operate in an industry that is loosely regulated and subjected to arbitrary numbers. Include in this equation third-party administrators with major conflicts and we get shops that install windshields with bathtub caulk.
So I feel it is my professional responsibility to offer a solution. In my estimation, we need tiered pricing. First, we should have a “competitive price.” And then we should have a “creative price.” I think we can all agree that at the very least, insurers should not be paying a competitive price to shops using bathtub caulk. A shop using bathtub caulk should be paid a “creative price.” After all, the standardized price on bathtub caulk should be less than urethane, allowing insurance companies to pad their bottom lines even more.
