The Auto Body Association of Texas (ABAT) is hosting its third Collision Day at the Capitol today at 10 a.m. CT in Austin. The event is designed to rally support for two state bills that have been introduced to ensure safe vehicle repairs and require evaluation clauses in auto insurance policies.
HB 1321, sponsored by Rep. Travis Clardy (R-District 11), would prohibit insurers from restricting where or from whom parts are purchased and labeling parts as type and quality unless the insurer or OEM designated it as such “conclusively proven”. proving it “meets fit, finish and quality criteria…same weight and metal hardness…and tested to the same crash and safety test criteria” as OEM parts.
The bill would also amend current law to further prohibit insurers and their employees from directing policyholders to specific repair facilities. Carriers would be prohibited from suggesting in any way that a particular workshop or facility would offer quicker repair times, quicker service, or more efficient claims processing.
Carriers “could not disregard a repair operation or cost identified by an estimating system, including the system’s procedure pages and any repairs, processes, or procedures recommended by the original equipment manufacturer of a part or product.”
HB 1437, also sponsored by Clardy, and its companion Senate bill, SB 554, would amend the state’s insurance code to ensure the accuracy of repair estimates within Texas auto policies, consistent with the recommendations of the Texas Office of Public Insurance Council in the January agrees (OPIC) that the right to assess insurance claims will be made a mandatory part of policies.
Many auto insurance policies include an appraisal clause that policyholders can invoke to have a third party appraise them if they disagree with their carrier’s appraisal of their vehicle or damage. Low ratings often lead to improper compensation for losses and, in some cases, can result in total write-offs on vehicles that could otherwise be repaired. Both the carrier and the policyholder engage an independent assessor and if the assessors cannot agree an arbitrator will be chosen to make the final decision.
The purpose of the invoice is to ensure that the insurance company’s estimates reflect the actual repair costs. According to the bill, insurers and policyholders would be able to invoke the appraisal clause within 90 days of proof of damage, and both the vehicle owner and carrier would be required to appoint “competent adjusters.”
ABAT President Burl Richards told Repairer Driven News the purpose of Collision Day at the Capitol is to bring lawmakers’ attention to the bills they support and other safety or insurance issues related to auto repairs in the state.
“We tell them we’re trying to get some legislation passed that would significantly improve the safety of Texas consumers and drivers on the road,” he said. “We’re bringing them light on some issues that we believe are emerging, whether by the insurance companies or by the Texan Department of Insurance that we believe need to be addressed. …it’s about drawing attention to them [bills] but also so lawmakers can see that there are citizens who care, there are small businesses here in the state that care, and we want them to help us.”
The event is primarily attended by collision repair groups and garages, but also includes OEM lobbyists, the Texas Auto Dealers Association (TADA) and Texas Watch. Insurance carriers don’t typically attend the event, Richards said.
“Insurance companies are interested in making a profit,” he said. “Unfortunately, we need these invoices because the body shops are responsible for it, and not only responsible, we are responsible for the repairs. When these vehicles leave our workshops and are not properly repaired, it is a major liability on us, not an insurance company. Insurance companies don’t repair vehicles, but unfortunately they mandate the repair and shouldn’t be. You are the bill payer, you should foot the bill; Have the vehicle repaired by a specialist. We’d love to work with them on that, but so far we haven’t had much success there.”
ABAT has worked with lawmakers during previous sessions to introduce similar legislation. Richards said they have “a lot of steam going now” with representing one of the bills on both sides of the chamber and because of the Texas DOI’s attention to the valuation issues.
“The Texas Department of Insurance believes that legislation needs to be passed that says it needs to be mandatory,” he said. “That’s really big, because the way I see it, the Texan Department of Insurance is just one arm of the insurance companies. …that’s a fair calculation… because insurance companies repeatedly invoke the right to appraisals. Why shouldn’t the consumer be able to, especially on the repairability of the vehicle? Because there are many safety issues at stake.”
Photo credit: Auto Body Association of Texas logo provided by ABAT.
Expert: Unfair insurance policies could be “coffin nail for safe roads”.
ABAT and Texas Watch are working together to help undercompensated auto policyholders and push for a mandatory appraisal clause law