Release Date:   Claims News Service, July 3, 2007 9:31a.m. EDT

The arrest of several windshield repair technicians in Arizona for insurance fraud has led one glass industry association to issue an alert asking its members to be vigilant for instances of “claim harvesting.”

According to the National Glass Association (NGA), claim harvesting involves the filing of fictitious insurance claims for windshield repairs that are never performed, or charging insurance companies for more repairs than were actually delivered.

The alleged fraud occurred when consumers were approached for windshield repair service at car washes in Phoenix, according to the NGA. While this kind of activity isn’t common in all parts of the country, it has become fairly widespread in the Southwest.

“Windshield repair at car washes and other automotive service centers is a perfectly legitimate and workable business model when executed with properly trained technicians doing legitimate repairs,” said Leo Cyr, NGA’s vice president, in a release. “The problem is not windshield repair or where those repairs are performed. The problem stems from the actions of a few people that tarnish a legitimate industry populated by dedicated professionals.”

Paul Gross, who is a member of the board of directors for the National Windshield Repair Association and president of Harmon Solutions Group, agreed with Cyr — to a point.

“Windshield repair certainly can be legitimately done from a car wash,” said Gross, who said many quick lubes and car washes sublet space to glass repairers. “However, it is clear that the industry trend is to abuse that business model. We have strong statistical data to demonstrate that many proprietors operating from this platform tend to abuse the billing practices afforded to the industry.”

Gross went on to say that Arizona has become a hot bed for this type of activity, and said that signs point to its spread into Southern California. To fight this kind of fraud, he recommends that insurance carriers track the average number of rock chips repaired per windshield using a group’s federal tax ID number. This can expose companies who consistently bill for the same amount of chips regardless of what was actually repaired.

“Insurers need to have their guard up, particularly in these two markets,” said Gross. “Windshield repair is a great product for the carrier and policyholder. But this great product has been exploited by unscrupulous proprietors who use the fact that the deductible gets waived. And the policyholder doesn’t know that this is going to be on their lost record since there is no out of pocket.”

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Harmon Solutions Group is an independent Third Party Administrator (TPA) providing auto and property claim administration services for insurance and fleet customers.  Our independent operating structure allows us to provide a neutral operating platform which ensures our customers are provided the ultimate product and service offering without bias or corporate self-interest. HSG offers reductions in overall severity and administrative costs by providing competitive pricing and delivering superior value and excellent service to policyholders and drivers. To learn more, please visit www.harmonsolutionsgroup.com or call 715-830-6000.