"All recommendations being made are being derived from information collected from the industry surveys HABA disseminated a few months ago," said James Brown with HABA.
In the 70 Page report, one of the items that specifically pertains to collision repair in TX can be found on page 39 of the report:
"Direct Repair Facilities:
• TDI conducted a survey in May, 2010 of the top five personal automobile insurers in Texas to obtain current information relating to automobile claim payments.
• Of the insurers surveyed, all had some sort of contract/agreement with direct repair facilities or had selected repair facilities to be on a preferred list (preferred shops).
• Based upon the survey responses, for calendar year 2009 the percentage of initial automobile claims with repairs made at direct repair facilities ranged from approximately 18% to 50%.
• The Insurance Code specifically addresses prohibited acts in connection with the repair of motor vehicles.
• The Texas Administrative Code addresses notice requirements and claimants’ rights regarding motor vehicle repairs.
TDI HAS RECEIVED COMPLAINTS that insurers improperly “steer” claimants to particular repair shops (direct repair facilities/preferred shops). Such action can restrict consumer choice. TDI has also received complaints that insurers are informing claimants that they may be responsible to pay for certain repair costs if the claimant selects a repair facility that is not on the insurer’s list of direct repair facilities.
Current law does not provide consistent regulation among insurers. For example, county mutual insurers, which represent approximately 45% of the Texas personal automobile insurance market, are not required to comply with the statutes and rules regarding the repair of motor vehicles.
Additionally, there may not be a clear understanding among the participants of the requirements to become a contracted direct repair facility with an automobile insurer.
82nd Legislative Session RECOMMENDATIONS:
Amend Texas law as follows:
• Require insurers to provide written notice to claimants outlining its policies and procedures for claims and repair processes performed at direct repair facilities and non-direct repair facilities, including how those procedures, processes and claims payments may differ. This should provide claimants with a better understanding regarding the repair/claim process under an automobile insurance policy.
• Make county mutual insurers subject to Insurance Code §§1952.301-307. This would allow all claimants the right to select an automobile repair person or facility and the type of parts or products used to repair their vehicles.
• Require insurers to provide a written disclosure upon request to automobile repair facilities outlining the requirements to become a contracted direct repair facility. This would allow all automobile repair facilities an equal opportunity to understand the requirements of becoming a contracted direct repair facility."
The full report can be viewed at http://www.tdi.state.tx.us/reports/documents/finalbie11.pdf
The impact of these recommendations on Texas state law remains to be seen.
For more information about the Houston Auto Body Association please visit www.habaonline.org.
