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New York Car Insurance Agents Penalized For Accepting Kickbacks

Forty-three car insurance brokers and agents from across central and western New York have been fined for taking kickbacks. Some were also fined for failure to supervise members of their staff who also accepted the incentives. In exchange for the kickbacks, the agents recommended two specific auto glass repair shops to their customers. Working at more than 24 car insurance agencies across the region, the agents are charged with taking gift cards from grocery and department stores in return for their recommendations. State law forbids agents from accepting any kind of gifts for pointing customers to certain auto repair shops. While the law does not forbid the repair shops from offering incentives, it does specifically address the forbidding of agents to accept them.

While the values of the cards were between $30 and $60 each, some payments accepted by agents reached as much as $1000. The fines for accepting these incentives, however, came to much more. Car insurance agents and brokers found guilty were fined a total of $42,650. Individual agent fines ranged from $250 to $5000. When the repair shops reported their inability to continue the incentives, lawmakers were alerted to the situation and began their investigation.

This particular business practice between car insurance agents and repairs shops appears to have been going on for some time. Many shops have continually complained of car insurance agents’ repeatedly sending their customers to particular shops, a clear violation of state law, which allows consumers to choose where they want their work done. Under the law, car insurance providers must cover the repairs regardless of where they are performed. Sending customers to certain repair shops is illegal, and according to lawmakers, taking gifts or kickbacks for this makes the situation much worse. Ultimately, it sends a clear message to the community regarding the agents’ practices.

The two repair shops in question are Bison Glass, which operates in Western New York and Pat’s Glass Inc. in Wyoming County. Both businesses were being financially burdened by the gifts. Eventually, the pay offs to the agents became too much for many of the auto repair shops to handle. And, if the shops did not provide the requested kickbacks, they did not receive the necessary business for the recommendations to keep themselves afloat in the tough economic community. One employee compared it to being held for ransom. Agents had even reached the point of determining what type of kickback they would receive. Bison Glass remains in business, happy the investigation is finally over. Pat’s Glass folded but still helped in the investigation.

With it all behind them, those still around can finally move on and hope for a better future when it comes to New York car insurance.

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