Inside the Auto Glass Fraud Crisis

Auto glass fraud has ballooned into a multibillion-dollar drain on insurers and policyholders alike. Fraudsters target unsuspecting drivers—often at car washes or gas stations—offering ‘free’ windshield fixes in exchange for an Assignment of Benefits (AOB) signature. Once signed, repair shops file inflated or entirely fabricated claims, driving up premiums for everyone.

In response, carriers such as USAA and GEICO have rolled out pre-inspection initiatives, verifying damage before approving repairs. Early data from USAA’s five-state pilot suggest these programs can cut questionable claims by up to 70%, saving insurers millions and reducing consumer pressure. Yet fraudsters adapt quickly, and state legislatures are scrambling to keep pace.

Florida has become ground zero for this battle, with lawsuits over glass claims surging from just 400 in 2006 to nearly 35,000 in 2019. Two landmark cases illustrate the challenge: in Gov’t Employees Ins. Co. v. Glassco Inc., the Florida Supreme Court ruled insurers must pay compliant claims even when repair shops skip procedural safeguards; and in State Farm v. At Home Auto Glass LLC, a federal ruling favored the shop, citing lack of customer harm. These decisions underscore legal hurdles in combating deceptive practices.

Kentucky has since modeled its new auto glass law on Florida’s framework, imposing stricter penalties and mandating written estimates. However, as long as there’s money to be made, fraudsters will innovate. Consumers can protect themselves by questioning ‘free’ repair offers, consulting their insurer before signing any forms, and reporting suspicious activity—one step at a time toward breaking the cycle of fraud.