The Auto Body Association of Texas (ABAT) will host its third “Collision Day at the Capitol” in Austin today at 10 a.m. CT. The event is to drum up support for two state bills that have been filed to ensure safe vehicle repairs and mandate appraisal clauses in auto insurance policies.
HB 1321, sponsored by Rep. Travis Clardy (R-District 11), would prohibit insurers from limiting where or from who parts are purchased, and calling parts like kind and quality unless the insurer or OEM has “conclusively demonstrated” it as such by proving that it “meets the fit, finish, and quality criteria… is the same weight and metal hardness… and has been tested using 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 steering policyholders toward certain repair facilities. Carriers would be barred from suggesting in any way that a particular repairer or facility will provide faster repair times, service, or more efficient claims handling.
Carriers wouldn’t be able to “disregard a repair operation or cost identified by an estimating system, including the system’s procedural pages and any repair, process, or procedure recommended by the original equipment manufacturer of a part or product.”
HB 1437, also sponsored by Clardy, and its Senate companion bill, SB 554, would amend the state’s insurance code to ensure the accuracy of repair estimates within Texas auto policies, which is consistent with recommendations in January from the Texas Office of Public Insurance Council (OPIC) that the right to appraisal on insurance claims be made a mandatory part of policies.
Many car insurance policies include an appraisal clause that policyholders can invoke to have a third-party appraisal done when they don’t agree with their carrier’s valuation of their vehicle or damages. Low valuations often lead to improper indemnification for loss, and in some cases can lead to total loss determinations on vehicles that could otherwise be fixed. Both the carrier and the policyholder hire an independent appraiser and if the appraisers can’t agree, an umpire is selected to make the final decision.
The bill aims to ensure insurance estimates are a true reflection of the actual cost of repairs. Under the bill, insurers and policyholders could invoke the appraisal clause within 90 days of the proof of loss and both the vehicle owner as well as the carrier would be required to appoint “competent appraisers.”
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’re supporting and other auto repair safety or insurance issues in the state.
“We explain to them that we’re trying to get some bills passed that would greatly enhance the safety of Texas consumers and drivers that are on the road,” he said. “We bring light to them on some issues that we feel like are happening whether it be from the insurance companies or the Texas Department of Insurance issues that we feel need to be addressed. …it’s about bringing attention to them [bills] but also for the legislators to see that there’s constituents that care about it, there’s small businesses here in the state that care about it, and we want them to help us.”
Mostly collision repair groups and repairers participate in the event but OEM lobbyists, Texas Auto Dealers Association (TADA), and Texas Watch attend as well. Insurance carriers typically don’t participate in the event, Richards said.
“Insurance companies are interested in making profits,” he said. “Unfortunately, the reason that we need these bills is because body shops are responsible and, not only responsible, but we own the repairs so when these vehicles leave our shops, if they’re not repaired properly, then this is a big liability on us, not an insurance company. Insurance companies don’t repair vehicles, but unfortunately, they’re dictating the repair and they shouldn’t be. They’re the billpayer, they should be paying the bill; let the professional repair the vehicle. We would love to work with them on it but so far we haven’t had a lot of success there.”
ABAT has worked with legislators during previous sessions to introduce similar legislation. Richards said they have “a lot of steam going now” with representation of one of the bills on both sides of the Chamber and because of the Texas DOI calling attention to the appraisal issues.
“The Texas Department of Insurance believes that legislation needs to pass saying that it needs to be mandatory,” he said. “That’s really big because, from my perspective, the Texas Department of Insurance is just an arm of the insurance companies. …this is a fair bill… because insurance companies invoke the right of appraisal all the time. Why should the consumer not be able to do it, especially on repairability of the vehicle? Because there’s a lot of safety issues that are involved.”
Featured image credit: Auto Body Association of Texas logo provided by ABAT.