View From The Trenches

Okay readers, may I have your attention? Can anyone tell me what the word “oxymoron” means?

For many of you 99 percenters, it is defined as: a combination of contradictory or incongruous words (as cruel kindness); broadly: something (as a concept) that is made up of contradictory or incongruous elements. (Thank you Merriam-Webster.)

Next question: Can anyone give me an example of a term often heard in auto glass repair and replacement that can be labeled as an oxymoron?

If you can’t, may I suggest “fair and reasonable?” If there is a term that is any more contradictory … and whenever I read or hear it, I secure my wallet, count my fingers and toes and try not to assume a defensive pose knowing that the people who most use that ubiquitous phrase are neither and never try to be.

I had that phrase read back to me just a few days ago. A client contacted me with a Corvette that had a HUD DW1371 in it. I have done several and told him I would need to research pricing and availability before giving a bid. Within a day, I got a call from Allstate’s TPA and I refused to accept any pricing limits on the taped phone call. I still received a work order via email. I proceeded to look around and find out my acquisition cost is north of $600. The customer wants me to drive 40 miles for a mobile install. Call me a weak sister, but I wanted a qualified tech to help. I contacted a buddy of mine and he wanted $125 in compensation for lost earnings and the 80-mile round trip.

Now I ask you: What is a fair and reasonable profit? What amount do I need to charge to adequately compensate me for my costs and liability?

“Fair and reasonable” to Allstate and their TPA was a 15 percent mark-up on glass and $150 labor. That total amount would have been less than one third of my glass cost. My bid would have at least covered my liability in case the glass or my workmanship had issues. Obviously what was “fair” to me was considered excessive by others.

I suggested to the customer to have the TPAs installation arm do the windshield. After all, who is better positioned to maximize profit or to pay out liability claims for a botched job?

While Safelite has to do the installation, for what I would presume contractual reasons, the sad fact is that there are far too many “glass services” in my region that would jump at the chance to earn the $200+ gross profit that was “reasonably” offered to me. Which of course is what makes it “fair” for Allstate or any other insurer to act in the manner that they do which is “take it or leave it.”

Another oxymoron of itself is National Auto Glass Specification (NAGS) pricing. Once a benchmark used at both the wholesale and retail level, it has now become solely a pricing point to use as a starting basis in demanded discounts from insurers or their slave attendant TPAs. How many industries can you think of that accept a universal list price for parts so discounts off that list can be demanded or bid upon?

Within health insurance billing, for providers, the trick is “all in the code.” A certain surgery may pay at a stated level; add in support services and practices at the proper code and your remuneration grows. However, there is no benchmark list for a heart transplant procedure then discounts shopped or demanded from that price point.

I wish car manufacturers would accept that. Think of a benchmark price of $15,000 for all four-door sedans. That would mean certain Kia and Mercedes would cost the same. Would Mercedes then accept giving a 45 percent discount off of the price for a 600S?

Is NAGS pricing proof that all glass is of identical quality? The “fair and reasonable” folks at insurers and TPAs profess with a straight face that it is. However, it is fact that a GAI is not NAGS-based in any shape or form. The axiom of “whoever makes the rules, wins” is never more in play when it comes to the insurance sector of auto glass repair and replacement.

I cringe now whenever I hear the term “reasonable.” What it has come to mean for me is not what is fair and equitable for both parties but what saves the bigger, more powerful side money. Looking at my bank account, I know my company does not possess any sustainable financial advantage.

The other irony exists when insurer CEOs get on TV and promote the “free market.” I have also read interviews where our largest glass corporation’s American and international executives rail against regulation as well as wax rhapsodically about the virtues of capitalism. That sounds reasonable and expected.

In the real world, however, what these pronouncements mean is that they want the ability to act unfettered and amorally—write a policy, set rates or pay claims that are one-sided. Dominate a marketplace, crush your opposition or make competitors bill through your TPA. All of these practices are commonplace today and are deemed “fair and reasonable.”

I hope you have now learned a new term and how to view it. Watch your backside whenever you hear or read that term because it is never a good sign for your bottom line … only theirs’.