by James A. Castleman, Esq.
Recently, I have had a number of telephone calls and e-mails regarding insured auto glass claims. I have also been doing some consulting work for a new entrant into the auto glass business in Massachusetts As a result, I have come to realize how different and unregulated the settlement of glass claims is in this state, at least in practice, if not in the law.
Statutes and regulations, on their face, do not treat glass claims very differently from other auto damage claims. And, the statutes and regulations tend to be quite specific about how insured auto damage claims are to be handled.
On the other hand, the standard Massachusetts private passenger insurance policy does treat glass claims differently from other damage claims. Further, in practice, insurers settle glass claims very differently from other types of auto damage claims. Yet, when it comes to trying to figure out the legal principles allowing for these insurance policy and claims settlement distinctions for auto glass claims in Massachusetts, welcome to the wild, wild West and frontier justice, because the distinctions are hard to find in the governing laws.
Massachusetts insurance statutes say very little about auto glass claims. There is no specific reference to glass claims in the statute governing collision insurance coverage. And, the only reference to glass claims in the comprehensive coverage statute says: “Insurers shall also make available, at the option of the policyholder, a one hundred dollar deductible applicable to damage to glass of any motor vehicle covered under the comprehensive coverage” - with no real context for this provision, and no other distinction as to applicable deductibles or any other coverage issue. Yet, if an insured is making a claim for a auto windshield replacement or other independent glass repair, that person is treated very differently from someone making a claim for auto body repairs.
A major question is why there is usually no deductible for glass claims. Unless a person is making a third party claim against someone that hit them, or unless a person has “waiver of deductible” coverage, almost all body damage claims are subject to a $500.00 deductible (or, in a limited number of cases, a different deductible if purchased by the vehicle owner). Yet, for a broken windshield, there is usually no deductible at all, and the insurer pays from dollar one. The reason for this distinction cannot be gleaned from the governing statutes. Nor, to the best of my knowledge, is there any regulation that governs this issue either.
The standard Massachusetts auto policy, however, does treat glass claims differently. If you have “collision” coverage, an insurer will pay for “any direct and accidental damage to your auto caused by a collision.” Yet, all glass breakage, unless involving other damage to the vehicle, is considered to be covered only under “comprehensive” coverage. The policy says: “We consider glass breakage when not involving other collision loss . . . to be Comprehensive and not Collision losses.”
Both collision coverage and comprehensive coverage are optional endorsements on an auto insurance policy; you can purchase either or both. But, if you just buy collision coverage, then a glass loss will not be paid for, unless it is accompanied by other damage to your car. On the other hand, if you have comprehensive coverage, then all glass loss not related to other damage will be covered.
Further, the standard deductible that an insured has to pay on a comprehensive coverage loss is $500.00. Yet, the policy specifically provides: “Your deductible does not apply to glass breakage.” In other words, despite there being no exception in the governing statue, the Massachusetts Insurance Policy generally requires an insurer to pay for the full cost to replace a broken windshield, unless an insured opts to pay a somewhat lower premium and get a $100.00 glass deductible.
It is important to note that the application of these principles applies only to a glass loss when it is not part of an incident that causes other damage to a vehicle. If you are involved in a collision with another vehicle, and the front end of your car is smashed in and your windshield is broken, then the total claim is handled as a collision claim, and the windshield replacement is not treated as a separate comprehensive loss. Your $500.00 deductible applies, and all other laws and regulations regarding collision losses apply.
The point is, that glass losses are treated very differently from other first party losses in the Massachusetts auto insurance policy; yet, there is no statutory or regulatory basis for this difference.
Settling a Glass Loss
There are very strict regulations governing how auto body damage losses are to be settled. Appraisals are required by licensed auto damage appraisers on behalf of insurers. Repair shops are required to have appraisers in their employ, who must negotiate with the insurance appraisers. Insurers are required to have referral repair shops, and are required to have at least five such shops geographically convenient to a claimant. Insurers must guarantee repairs done by their referral shops. Insurers are required to have “direct payment” programs for settlement of auto damage claims, and must follow very strict rules under the “direct payment” regulations.
So, glass claims are required to be settled in the same way as other auto damage claims, right? Apparently not. Yet, I am not sure why, or what the legal basis is for the difference in the way that glass claims are settled.
M.G.L. c. 26 §8G governs auto damage appraisers. There are strict rules in the statute for the appraisal of auto damage claims by licensed appraisers. There is no exception in the statute for glass claims.
The Auto Damage Appraiser Licensing Board regulations govern appraisals of auto damage in significantly more detail. The regulations require an insurer to automatically assign an appraiser upon receipt of any claim for motor vehicle damage. There is no exception for glass claims. The regulations require all repair shops to maintain one or more licensed appraisers in their employment. There is no exception for glass shops. The regulations further require an appraiser to personally inspect damaged motor vehicles and to photograph each of the damaged areas; they require appraisers to specify in detail all elements of damage attributable to an auto insurance claim; they require presentment of the appraisal to the claimant and/or their chosen repair shop; they define a “claimant” as “any person making a claim for damage to a motor vehicle for either first or third party damages”. There are no exceptions anywhere in the regulations with regard to any of these issues for glass claims.
In fact the ADALB regulations specifically state: “All appraisals written under 212 CMR 2.00 shall include the cost of replacing broken or damaged glass within the appraisal”. There seems to be some wiggle room in a subsequent sentence of the regulation that provides: “When there is glass breakage that is a result of damage to the structural housing of the glass then the cost of replacing the glass must be included in the appraisal.” This is certainly not a definitive exclusion of glass claims from other requirements of the regulation, however.
So, if a stone kicks up and breaks a windshield, it appears from the statutes and regulations that an insurer providing coverage must assign an appraiser to inspect the damage, that the damage must be appraised before an insurer pays for it, that the glass shop hired to do the repair must have a licensed appraiser in its employ who will negotiate with the insurance appraiser, etc. Yet, I am unaware of any of this ever occurring.
In fact, while the ADALB regulations require all repair shops to have a licensed appraiser in their employ, and while the Division of Standards generally requires repair shops to list their licensed appraisers in their registration applications, there is a specific exception from this requirement for glass shops. According to the Division of Standards, glass shops do not need to have licensed appraisers. And, as far as I know, most glass shops do not employ licensed appraisers.
Notably, there is a striking difference in how glass claims are treated under insurer Direct Payment programs. Today in Massachusetts, the vast majority of auto damage claims are handled under insurers’ Direct Payment plans. When a claim is made, the insurer appraises the damage through a licensed appraiser; they give the claimant a copy of the appraisal with a list of all registered repair shops, indicating which shops are the insurers’ referral shops; they give the claimant a disclosure regarding registered shops and referral shops, as required by the Commissioner of Insurance; they pay the claimant “directly” for the appraised damage, allowing him to make whatever deal he can with his chosen repair shop; they are required to reappraise damage when supplements are requested; and they are required to negotiate with the claimants chosen repair shop. All of these things are required by the Division of Insurance Direct Payment regulations; yet very few of them occur for glass claims.
The Direct Payment regulations do have a quirk in their definition of a “repair shop”. Under the regulation, a repair shop is defined to be a shop registered under M.G.L. c. 100A § 1, “but not including glass specialty shops and shops which primarily sell tires or audio equipment.” This exclusion appears to be in the regulation only to allow insurers not to be required to have referral glass shops, however, not to allow them to otherwise ignore the regulation for glass claims.
But, insurers appear to have wildly interpreted the glass shop exclusion in the regulation. Insurers do have referral glass shops, and appear to go well beyond what is otherwise allowed by law for referral of their claimants to these shops.
The ADALB statute still says: “No appraiser or insurer shall request or suggest that repairs be made in a specified repair shop.” Yet, most insurers seem to do everything in their power to encourage claimants to use one of their referral glass shops. Indeed, if a claimant calls in a glass claim, some insurers automatically transfer the call directly to a glass company with which they contract to administer their glass claims. The referral shop programs outlined in the Direct Payment regulations were meant to be an exception to the general Massachusetts anti-referral rule; but insurers have turned the exclusion of glass shops from the referral shop rules on its head, using it to implement broader referral programs for glass claims, while limiting the number of glass shops they allow onto their glass referral lists, and pushing claimants to their referral glass shops.
And, where is the excuse not to appraise glass damage or not to give a claimant a copy of an appraisal? Where is the excuse to treat payment of glass claims differently, and not to make payment directly to the claimant? Where is the excuse not to give the required disclosures as to registered shops and referral glass shops? It is nowhere!
I am a lawyer who has been advising auto damage repair shops and related businesses for decades. A primary part of my job is to read and interpret the statutes, regulations, and case law pertaining to how those businesses are required to operate. But, I am at a loss to be able to give good legal advice regarding glass claims. The words are in the books, but nobody seems to be following them.
The above describes the state of glass claim settlements in Massachusetts. This is what insurers, glass shops, the Division of Insurance, the Division of Standards, the Attorney General’s consumer protection division, and insured claimants in Massachusetts allow to continue as the way to handle these claims. Insurers appear to be able to run rough shod over claimants and glass shops when handling auto damage glass claims, without limitation and without penalty. Enforcement of the laws on the books appears to be nonexistent.
I hope that you are all loading up your six shooters and hiding away your women and children, so that you can enforce the frontier justice that covers glass claims in Massachusetts, and so that you can properly protect yourselves and your businesses when handling them.