Facing fewer insurance referrals, local auto glass shops seek legal relief

The cluster of single-story, aluminum buildings on Hilton Head Island's north end is nearly abandoned.

The only soul in sight is a solitary man piling scraps from inside one of the structures into the bed of his pickup. The buildings just off U.S. 278 are about to be torn down, he said.

But a decade ago, the site was one of 11 bustling locations for Southern Glass & Plastics, a Columbia-based auto glass repair shop.

Its owner, Alan Epley, said he's had to shutter six of them in recent years because he receives fewer referrals from insurance companies -- and he's spearheading a campaign to halt what he says are the unfair practices of his larger competitors.

The problem, Epley said, is that Ohio-based Safelite AutoGlass serves as a third-party administrator in negotiations with insurance companies, steering customers toward its own installers and away from independent businesses like his.

"Having our direct competitor being in the middle of the claims transaction has been devastating to many in our industry," he said.

A bill that has already passed the state House of Representatives would prohibit companies with an interest of 10 percent or more in a glass-repair business from acting as a third-party administrator for related insurance claims. An identical Senate version will be discussed at Wednesday's meeting of the S.C. Senate Committee on Banking and Insurance.

"The sole purpose of (the bill) is to eliminate Safelite as an option for South Carolinians," company spokeswoman Melina Metzger wrote in a statement. "If (the bill) becomes law, consumers are hurt with fewer choices and higher insurance premiums."

Epley disagreed, saying "this bill would only put them on the same level playing field as every other legitimate company in this state."

Metzger maintained the company's Solutions division -- which acts as an administrator -- operates independently and without bias toward its installers.

Randy Browning, who owns Glass Express in Beaufort, said the bill would remedy a legal loophole that's been exploited at disastrous cost to local businesses.

"It's strangling independent glass shops in Beaufort County," he said, adding the competition has contributed to a 25 percent decline in sales last month from January 2011.

Browning added he hoped he could count on the support of Sen. Tom Davis, R-Beaufort, part of the committee set to consider the bill next week.

"I've spoken and listened to a couple dozen independent glass retailers from around the state," Davis said. "They've raised issues on a lot of levels. But I need to exercise due diligence."

Paul Heinauer owns nine Glasspro shops statewide, including one in Bluffton, and said his company recently began instructing customers to call them first before contacting their insurance agencies the next time they need glass replaced.

"If they don't, we're not going to get the work," he said.