The California Insurance Fraud Prevention Act (IFPA) is designed to protect both consumers and the integrity of the insurance industry within the state. Its primary goal is to combat and prevent fraudulent activities that exploit insurance systems, ensuring that trust and fairness remain central to these services.

What helps make the IFPA effective are its whistleblower provisions. Individuals who uncover fraudulent activities have the opportunity to file litigation against violators and receive a share of recovered funds as a reward for their courage.

An recent IFPA case filed in California involved serious allegations of unethical billing practices by Safelite Group Inc., Safelite Fulfillment inc., dba Safelite AutoGlass, a leading company in auto glass repair and replacement. A former employee, Brian Williams, stepped forward as a whistleblower, filing insurance fraud lawsuits in California and Illinois. He was last employed by Safelite as aproduct development and strategy manager

The Illinois Insurance Claims Fraud Prevention Act (IICFPA) was also central to the Safelite case. This Illinois law also allows whistleblowers to file lawsuits on behalf of the state against entities suspected of submitting false claims to insurers.

According to the allegations contained in Williams’ Second Amended Complaint filed in the San Mateo Superior Court last July, to recover damages and civil penalties on behalf of the People of the State of California, arising from an alleged insurance fraud scheme planned and carried out by Safelite.

According to Williams, Safelite consistently billed insurance companies for high-quality OEM (Original Equipment Manufacturer) parts – components trusted for their durability and performance. However instead of using these premium parts, Williams alleged Safelite often replaced them with cheaper, generic alternatives known as “universal molding.” Moldings are a rubber or plastic trim, most commonly black in color, that usually run along either the top or the top and sides of, and at times even around, the glass of a vehicle. Molding provides insulation and noise reduction while holding the window in place securely and safely.

The complaint contained examples of invoices sent to Safeco, Farmers and State Farm Insurance, charging for a higher grade molding than the universal moulding. And went on to allege that from “at least 2015 through 2020, Safelite engaged in this practice of using universal molding but charged insurance companies and others for part-specific molding on over 1 million vehicles. In 2019 and 2020 alone, Safelite charged insurance companies and others for part-specific molding, but used universal molding to outfit the vehicles, for over 255,000 vehicles, over 13,850 of which were for vehicles whose glass was replaced in California.”

“Safelite AutoGlass was systematically billing for OEM or aftermarket parts when universal moldings were actually used in their place. Furthermore, the data showed that this sort of billing was happening across all insurance clients and customers billed via account, including government agencies, commercial accounts, and fleet accounts.”

Another alleged scheme involved additional charges imposed by Safelite during the COVID-19 pandemic. Customers were reportedly billed for cleaning services intended to ensure safety and hygiene. However, the lawsuits alleged that these services were inconsistently applied and offered to only a small fraction of customers, raising questions about the company’s billing practices.

According to news sources SafeLite has agreed to a $31 million settlement to resolve the claims. Safelite did not admit to any wrongdoing.