Safelite AutoGlass recently negotiated a large cash settlement to resolve two insurance fraud lawsuits filed by a former employee. The lawsuits, brought by a former product development and strategy manager, accused Safelite of misleading insurance providers and overcharging for certain replacement parts and services.

The former employee filed complaints in California and Illinois in January 2023. He claimed the company submitted false and misleading bills to insurers for windshield replacement parts and cleaning services. According to the complaints, these practices led to significant financial losses for insurance companies and policyholders.

The California lawsuit alleged that Safelite falsely billed insurers for OEM replacement parts while using cheaper, lower-quality materials. 

The company reportedly allowed technicians to install universal molding at will instead of vehicle-specific parts. Universal molding is a generic rubber or plastic strip that is less expensive and easier to install than manufacturer-approved parts. However, the former employee claimed it may not be suitable for all vehicles.

While the customer-facing invoice billed for the OEM part number and its suggested retail price, the technician could replace the part number with “FLEXIMOLD” on the backend without changing the customer-facing invoice, the complaint alleges.

The Illinois complaint expanded on these claims, stating that Safelite’s billing practices had been in use for upwards of 20 years, resulting in millions of dollars in overcharges, Repairer Driven News shared.

The lawsuit suggested that these costs were likely passed on to Illinois policyholders in the form of higher insurance premiums.

It also alleged that Safelite technicians had the option to choose which parts to use, often selecting universal molding for convenience. Furthermore, the company reportedly lacked standardized training, leading to inconsistent practices across locations.

The former staff member’s lawsuits argued that these actions violated insurance fraud prevention laws in both states. He also claimed that Safelite charged insurers for cleaning services that were only provided to a small number of customers during the COVID-19 pandemic.

His second amended complaint in California also included alleged threats from a former colleague to stop looking into the flagged problems. The former manager said that after he began presenting his findings to his superiors, Safelite furloughed him without pay for months during the pandemic. He said he found out that he was the only management position furloughed at his level in the company’s org chart.

After returning, he says Safelite moved him to a different manager, who told him to stop working on that project. He questioned the directive and ultimately continued looking for solutions to Safelite’s overbilling practices after discussing the project with other leaders. However, he said that after years of presenting his internal findings to company leadership without an effective response, including the reported backlash he suffered while working on the project, he resigned.

To resolve the disputes, Safelite and Williams reached a $31 million settlement agreement

The company agreed to pay $31 million to avoid prolonged legal battles. However, Safelite denied any wrongdoing or liability. According to the settlement terms, the company did not admit to engaging in fraudulent or improper conduct.