Infotech Consulting’s Expert Analysis helps Geico Insurance battle Auto Glass Shops

Florida has a unique auto insurance law that allows those insured to have the windshield of their vehicle repaired or replaced without triggering their deductible.  In other words, insured drivers can get their windshield replaced with no out of pocket cost. There are only four other states with this unique provision: Arizona, Kentucky, Massachusetts and South Carolina. This has created a unique market whereby those insured are not involved financially in the transaction, leaving just the insurance company and the auto glass shop.  Auto glass shops have the insured assign their benefits to the glass shop upon completion of the installation or repair, which allows the auto glass shop to pursue any litigation against the insurance company without involving the insured.

Why is that important?  Why would the auto glass shop need to litigate against the insurance company over a windshield replacement?  Because auto glass shops in Florida are claiming insurance companies are not paying the full amount on the invoice.  Suit after suit by auto glass shops allege that insurance companies, like GEICO, are underpaying on the invoices for windshield replacements by relying on a reduced retail rate.  This issue has increased dramatically with about 400 Assignment of Benefit (AOB) lawsuits filed against multiple auto insurers statewide in 2006 to a peak of about 24,000 in 2017.  There was a reduction in the number of cases filed in 2018 and 2019 – with around 17,000 filed each year – but that is still quadruple the number filed a few years back.  

In 2018, Infotech was hired by GEICO to analyze GEICO’s windshield replacement prices throughout the state of Florida to determine if GEICO was paying auto glass shops the prevailing competitive price. In GEICO’s auto insurance agreements, there is a limit of liability provision stating, “Although you have the right to choose any repair facility or location, the limit of liability for repair or replacement of such property is the prevailing competitive price, which is the price we can secure from a competent and conveniently located repair facility.” Over the last five years, Dr. Jim McClave has testified in numerous cases that the GEICO transaction data show GEICO was regularly able to secure its price from glass shops throughout Florida.  

The crux of these cases come down to whether GEICO pays a prevailing competitive rate for windshield replacement or whether the invoice amount from the glass shops represent the prevailing competitive price.  Infotech analyzed over 140,000 GEICO windshield replacement transactions between 2013-2018 involving over 1,200 auto glass shops in Florida. After analyzing the data, Dr. McClave and the Infotech Consulting team determined the claims data reveal GEICO’s payments for windshield replacements are consistent with prevailing competitive prices.  In every year of analysis, a majority of glass shops are commonly charging a rate at or near the agreed-upon GEICO price.

Dr. McClave has offered his expert opinion in nearly 100 cases on this issue.  In each instance thus far, Dr. McClave and his team have analyzed the invoiced prices submitted by the glass companies for the claims at issue and found that they were out of line with the prevailing competitive price charged in the market.  He has testified in multiple depositions and several trials, with the most recent trials last spring.  In fact, the GEICO trials in April 2021 represented Infotech’s return from a year-long hiatus of trial appearances due to Covid-19.  In the trial on April 13th and 14th of 2021, Superior Auto Glass argued that GEICO did not fully pay Superior’s invoiced amount for a windshield replaced on an insured car in 2015.  The jury returned a verdict in favor of the Defense, finding that GEICO paid a prevailing competitive price and that the auto shop had knowledge of the GEICO rate before accepting the work and invoicing GEICO far in excess of that rate. 

As Infotech Consulting President Dr. Jamie McClave Baldwin recently said, “When the jury came back with a finding in favor of our client, it confirmed the effectiveness and irreplaceable value of in-person court appearances. How gratifying it was to see our client get a favorable result in a case that has been litigated since 2016 and has gone up and down the appeals circuit.”

Until there is Florida legislative action or higher court authority on this matter, the Infotech Consulting team will continue to provide statistical analysis to this evolving market of litigation.

1 Florida Statute §627.7288 (2021)

Infotech Businesses Aid in $101.35 Million Settlement for West Virginia DOT

Infotech houses two distinct operating businesses, Systems and Consulting. However, both businesses were born out of one request by the Florida Attorney General 42 years ago: can computerized statistical techniques be developed to detect bid rigging in public procurement?  The answer was yes, and Systems has been working with individual states ever since to make the highway construction industry more efficient and competitive while Consulting has been successfully helping states estimate damages when bid rigging is detected. This collaboration between businesses is still making an impact today, most recently in West Virginia. 

In 2014, the Assistant Director of the West Virginia Department of Highways felt there were significant issues in their bidding process. After a preliminary analysis in 2015, Infotech began a thorough analysis of West Virginia AASHTOWare Project BAMS/DSS™ data going back to 1996. Infotech also obtained comparison data with cooperation from surrounding states including Ohio, Kentucky, Virginia, Pennsylvania and Maryland. 

Data revealed that certain parts of the state were not competitive and, as a result, the West Virginia Attorney General and the Department of Transportation filed suit in 2017 against big name asphalt companies. Defendants attacked the reliability of the BAMS/DSS data and the subsequent analysis, but expert statistical consultant and Infotech co-founder Dr. Jim McClave, and Jeff Derrer, Infotech Senior Business Analyst, vigorously defended the data through multiple depositions and held steadfast in their knowledge that the data could only be explained by collusive behavior. After years of litigation, the case settled for $103,500,000, the largest antitrust settlement in West Virginia history. This was a victory for West Virginia and for both businesses of Infotech.

State of West Virginia, ex rel. Patrick Morrisey, Attorney General and Paul A. Mattox, Jr. in his Official Capacity as Secretary of Transportation and Commissioner of Highways, West Virginia Department of Transportation, v. CRH Plc, Oldcastle Inc, et al. Case No. 17-C-41, Cir. Ct of Kanawha County, WV (2017)

Infotech Consulting Upholds Statistical Standards in Construction Defects Sampling

Infotech Consulting Upholds Statistical Standards in Construction Defects Sampling

Infotech Consulting was retained on behalf of Beazer Homes in a class action suit filed by Heritage Commons Townhome Association alleging breach of implied warranty, violation of Florida building codes, and negligence in construction of an 89-unit townhome project in Seminole County, Florida. Plaintiffs maintained that defects observed in their homes’ exteriors, windows, and architectural elements were due to systematic issues in the original design and construction of the buildings. The class claimed that as a direct and proximate result of Beazer’s negligence, large sums of money would be required to repair the defects and deficiencies and to maintain the property and buildings going forward.

The Plaintiffs retained a statistical expert who collected the results from the destructive testing performed on the buildings in the townhome project, then designed a sampling methodology and performed analyses intended to determine the likelihood of systemic defects contributing to the observed defects, as well as the need for repair or replacement. Dr. Jamie McClave Baldwin was hired by the Defendant to evaluate the methodology employed and conclusions drawn by the Plaintiff’s expert. Dr. McClave Baldwin conducted a rigorous review of the opposing expert’s sampling methods and thoroughly evaluated the data used in his calculations of confidence intervals and estimated defect rates. Infotech Consulting’s attention to statistical standards of reproducibility and reliability demonstrated that the Plaintiffs’ expert analyses were biased and not based on sound statistical principles, thus rendering his conclusions unreliable. The case was settled in a manner favorable to defendants in February 2020 for an undisclosed amount.

Heritage Commons Townhome Association, Inc v. Beazer Homes Corp., No. 2016-CA-002447-11E-W (Circuit Court for the Eighteenth Judicial Circuit in and For Seminole County, Florida)

To P-Value or To Not

To P-Value or To Not

Dr. Jamie McClave Baldwin

Dr. Jamie McClave Baldwin

In an article enumerating the dos and do nots of statistical significance published in The American Statistician, Dr. Ronald Wasserstein et al. said the following:

“We summarize our recommendations in two sentences totaling seven words: ‘Accept uncertainty. Be thoughtful, open, and modest.’”

Seems like simple advice — applicable to anything and something most people would agree with. So what’s all the fuss and why does this need to be stated by the uppermost authorities in the statistical world?

The heart of that debate goes like this. Many academic journals have long required a study to show statistical significance, associated with a low p-value (typically less than .05) in the results to qualify for inclusion in the journal. This seemed reasonable on the surface — a study needed to show some sort of important effect to be included in the body of knowledge for that field. Unfortunately, this led to abuse. Authors would “p-hack” and manipulate results to get statistical significance in order to get published. So now these academic journals face a conundrum. 

If they drop the statistical significance requirement, do they run the risk of letting in junk science and irrelevant material? Or if they continue the requirement, are they encouraging bad scientific practice, potential false positives, and a myriad of other scientific problems? The answer suggested by the statistics community, and practiced by Infotech since its inception, is that those choices fall into the fallacy of the false dilemma. Neither extreme is right and those extremes are not the only choices. Context is essential; honesty is crucial; and integrity is everything. The statistician is not just a person pressing a magic button that produces mysterious results that only he or she can unlock. Statistics is a toolbox and the statistician is the handywoman.

Wasserstein’s ultimate advice is right: accept uncertainty. The p-value may shed light on the amount of uncertainty, but it does not eliminate it full stop.

Throwing out p-values as a whole is inappropriate and would disregard hundreds of years of statistical theory. Recognizing that p-values have limitations and must be considered in context – how large is the sample, are the results also practically significant, do other tests confirm the results – is also a necessary part of science. Studying new and improved tools for evaluating hypotheses has its place as well. In the end, if the effect doesn’t reach statistical significance, that may still provide direction for future research or different avenues to travel. It may tell you that you have another statistical problem, such as multicollinearity, too little information, confounded effects, omitted variables. Or it may tell you that there is no relationship between the variables of interest. No news is neither good news or bad news; but it is news.

Advantages to Modeling

Advantages to Modeling

Janese Nix, Statistical Analyst

What questions can be answered with statistical modeling? We say, “All of them!” And our colleagues around the world agree.

Want to know what basketball team will win March Madness this year? Model it!

Want to know if your bidders are acting competitively? Model it!

Want to find out if our elections were hacked? Model it!

All you need is the right data. That’s where Infotech Consulting comes in. Collecting, mining, sorting, testing, verifying, understanding, and extracting information from data is what we love to do. With quadrillions of bytes of data produced daily, there is certainly no shortage of information. The efficient processing of overwhelming amounts of information is essential to our practice.

We specialize in not only finding and utilizing relationships within data but also finding data resources to expand that understanding. We find the signal in the noise and make the complex simple.