Texas Department of Insurance Issues Anti-Steering
Bulletin to State's Insurers
August 24, 2010
The Texas Department of Insurance (TDI) recently issued an anti-steering
bulletin to the state's insurers reminding them of the state's anti-steering
law as it applies to automotive repair facilities.
"The purpose of this bulletin is to remind insurers of their
responsibilities to claimants regarding payment for damage to a
motor vehicle and the selection of a repair person or facility in
accordance with Subchapter G, Chapter 1952 of the Texas Insurance
Code (TIC) and Title 28, Section 5.501 of the Texas Administrative
Code (TAC)," writes the state. "The Department has received
information which causes it to be concerned that insurers may be
providing claimants with additional notice regarding motor vehicle
repairs that may be in conflict with the TIC and TAC."
According to the August
2 bulletin, the Texas insurance code specifies that insurer's
cannot limit its coverage by:
- "specifying the brand, type, kind, age, vendor, supplier,
or condition of parts or products that may be used to repair the
- "limiting the beneficiary of the policy from selecting
a repair person or facility to repair damage to the vehicle."
The TDI goes on to advise insurers that neither insurers nor related
agents may "suggest, either orally or in writing, to a beneficiary
that the beneficiary must use a specific repair person or facility
or a repair person or facility identified on a preferred list compiled
by an insurer for the damage repair or parts replacement to be covered
by the policy."
In addition, the TDI reminds insurers in the bulletin that they
must notify claimants that they have a right to choose an automotive
"The notice also specifies that an insurer is not required
to pay more than a reasonable amount for such repairs and parts,"
adds the TDI.
TDI is requesting that the state's insurers review its notices
and "to ensure the notices are not in conflict with the TIC
Examples of violations cited by the TDI include "providing
notice to a claimant, either verbally or in writing, that implies
the claimant may be responsible for paying for certain repair costs
if the claimant chooses a repair facility that is not on the insurer's
list of preferred repair facilities
TDI also points out in its bulletin that it is "concerned
that setting reimbursement rates artificially low for specific motor
vehicle repairs and parts that are used to make the repairs may
lead to substandard repairs, which may also impact the warranty
on a vehicle."
"The majority of personal automobile insurance policies require
insurers to pay the amount necessary to repair or replace the property
with other(s) of like kind and quality," writes TDI. "It
is an unfair claim settlement practice for insurers to pay claimants
an amount for the repair of the vehicle, including parts, that is
not a reasonable amount for repairing or replacing the property
with other of like kind and quality or is not sufficient enough
to make the repairs necessary for the manufacturer to honor the
The TDI says it will investigate allegations of unfair claims settlement
practices, "both in the context of individual cases and general
business practices, and will take appropriate enforcement action
when evidence of unfair claim settlement practices is demonstrated."
At press time, officials from the TDI were unavailable for comment
as to the origins of the bulletin.
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