by Chasidy Rae Sisk
Texas drivers deserve safe vehicle repairs, and that means that insurers should be properly indemnifying them in the event of a loss. But as collision repairers across the Lone Star State are well aware, that’s not always the case.
As the 88th legislative session opens up in Austin this month, ABAT is hitting the ground running with two pieces of key legislation, designed to benefit consumers and the shops that serve them.
“ABAT’s two bills for 2023 mirror the legislation we filed in 2021, and we’re feeling pretty good about this coming session,” shares ABAT President Burl Richards. “Near and dear to my heart is the Safe Repairs bill that ABAT has diligently been pursuing since shortly after this association began, and I’m convinced that the fourth time will be the charm! We’re also urging policymakers to make the Appraisal Clause mandatory in all insurance policies to ensure consumers have a reasonable way to seek proper indemnification from their carriers.”
“We’ve spent this past year preparing for the legislation we’re hoping to pass this session,” explains ABAT Executive Director Jill Tuggle. “Each session, we learn more, build on that knowledge and progress a little further. We invested a lot of time in 2022 educating our membership, so we all understand the process a little better and have a better grasp on what is needed from us both individually and as an organization.”
“We’ve tried other routes to achieve these goals,” Richards adds. “But each time we call upon the Texas Department of Insurance (TDI) to address shops’ challenges with insurers, we’re told that TDI has no jurisdiction or authority. ‘You’ll have to pass legislation,’ they tell us. So, that’s what we’re going to do.”
The Safe Repair legislation seeks to require proper repairs based on OEM-recommended processes as ABAT attempts to eliminate the “gray” areas as to what a proper repair is and how insurers indemnify policyholders, in addition to addressing the differences between original and aftermarket parts. “We hope to prevent insurers from disregarding certain procedures recommended by vehicle manufacturers and help provide a safer repair, while ensuring that consumers are properly indemnified,” Richards urges.
This bill was first introduced in 2017, and although the House Insurance Committee approved the amended version by a six-to-three vote, the session ended before the House voted on it. When it was reintroduced in 2019, the 86th legislative session ended before it received a second hearing; it was defeated by the clock.
The most recent iteration of the Safe Repair bill stalled in the House last session, but ABAT isn’t discouraged, Richards insists.
“When we first began this journey, we heard that it often takes three or four legislative sessions to move a bill through, and despite the insurance industry’s vast bank accounts working against us, we’ve made progress at every turn. Vehicle owners deserve to be indemnified sufficiently to ensure their safety, and the shops following OEM procedures deserve to be compensated adequately, so we’re going to keep fighting to protect Texas consumers by preventing insurers from discouraging safe and proper repairs using OEM processes, procedures and parts.”
Once again, Representative Travis Clardy (R-Nacogdoches) is sponsoring the newest iteration of this bill as well as ABAT’s second pass at an Appraisal Clause bill, which would require insurers to include Right to Appraisal in all policies. Although the 2021 version of this bill didn’t quite make it to the finish line (the House voted 91 to 50 in favor of the bill, but it died in a Senate committee), ABAT took hope from the fact that a first-year bill passed the House and reached the Senate, though the session ended before the bill received a Senate hearing. “We’re very optimistic about getting it passed this time around,” Richards says.
“The Right to Appraisal is important because it puts the consumer back on equal footing and gives the consumer an opportunity to have their car repaired properly,” he continues. “The insured’s rights all come down to the policy language, and although the TDI is charged with protecting Texas drivers, they allow these egregious policies that basically state insurers can dictate the entire repair. TDI does absolutely nothing to help consumers – they’re as useless as tits on a boar hog!”
“The Right to Appraisal solves problems in an amicable way,” Robert McDorman (Auto Claim Specialists) offers, insisting, “We have to talk about the problems if we’re ever going to fix them.”
Representative Clardy agrees, “The process works. It’s fair and levels the playing field…and that makes insurance companies very uncomfortable. They don’t like the concept of ‘loser pays,’ but what could be more fair than going to an independent umpire who makes the decision and the loser pays expenses? Everyone has equal risks.”
Richards and McDorman laid the groundwork for the Right to Appraisal bill by voicing the need for consumers to receive proper indemnification on claims without being subject to lengthy and costly litigation during the Texas House Committee on Insurance’s public hearing this past September.
“This appraisal issue is 100 percent a safety issue,” McDorman stressed to the committee. “Appraisal is about getting it right; it’s about finding the number. The Right to Appraisal should be mandatory. If there’s a loss dispute, it should be subject to appraisal. My unwavering position is that removing the Right to Appraisal on repair procedure disputes will be the enemy of a safe repair and become the stake in the coffin for safe roadways for us all.”
Their testimony appears to have made some impact. In the Texas House Insurance Committee Report, the committee wrote, “A consumer’s right to invoke appraisal in disputes regarding the cost of repairs or the amount of a total loss has been the market standard in Texas for both personal automobile and residential property insurance. The Committee will continue to monitor this situation.”
Additionally, TDI included Right to Appraisal in its 2022 Biennial Report under policy considerations, suggesting legislators “establish policy form appraisal guidance,” though unsurprisingly, TDI neglected to actually offer any recommendations on the matter. (Richards weighs in on what this inclusion means to him on page 4.)
While ABAT’s undertaking is not a small one, association leadership expresses a lot of faith in their ability to move the needle this time around.
“We’ve been strategically planning for this session, and I believe we have a really good plan in place. This is the earliest we’ve ever filed,” Richards reports. “We’ve worked hard to make sure the language is written in black and white to eliminate any loopholes, and we’re gearing up to spend the first half of the year focused on passing this legislation to protect Texas consumers. Passing this legislation is our main goal for 2023, and I’m optimistic that we’ll get one, if not both, bills passed. And once they DO get passed, we just hope the TDI will do their jobs and make insurance companies abide by the new laws.”
ABAT Lobbyist Jacob Smith (Longleaf Consulting) shares Richards’ optimism. “I have a lot of hope for the Right to Appraisal bill as well as the Safe Repair legislation. ABAT members did a great job in 2021; they showed up to support the association’s efforts by testifying and contacting their policymakers…and the results showed their efforts. We’ve spent the interim talking with legislators and educating them on the issues, and by starting the filing process a lot earlier this session, we believe we’ll be able carry our legislation across the finish line!”
“Heading into the new session, I’m even more hopeful than I’ve been in the past because we’re not going down there alone,” Tuggle points out another reason ABAT believes in its imminent success. “We’ve got the support of the Texas Auto Alliance and the Texas Auto Dealers Association who are also submitting legislation that we can get behind, and we’re working with public insurance adjusters on the Right to Appraisal bill. We say it all the time, and it’s true here too…We’re stronger together.”
Texas Watch is again lending their support to bring awareness to these bills by involving the public (get more information at texaswatch.org/safe-repairs) as well as through the “Call Kelly” consumer complaint initiative with ABAT (learn more on page 8 or file a complaint at texaswatch.org/appraisal-form.)
Richards also offers continued praise for Representative Clardy who has been “championing and sponsoring ABAT’s bills since 2017. He is truly committed to helping Texas consumers receive indemnification for safe and proper repairs, and we appreciate all his efforts and support.”
Still, ABAT needs YOU, the collision repair professionals, to get involved NOW.
“Can you imagine getting paid for all OEM recommended procedures? Can you imagine using parts that all fit correctly and have been safety-tested and really are of like kind and quality? Can you imagine the Right to Appraisal for partial loss being included in every policy again?” Tuggle asks. “For too long, our industry has convinced ourselves that we don’t stand a chance against the insurance industry because they’re so much bigger than us, but our voices MATTER. Nothing trumps the constituents’ voices!”
“We’re facing a giant, but every session, we’ve gotten better and outworked them. We’ve just been beaten by the clock,” Smith seconds that notion. “We must protect consumers…and that means we need to hear from all of y’all…Legislators want to hear from you, their constituents. But if they don’t know about your issues, they cannot help. We are voters and real businesses here in Texas, and we need to call and email them so they know what you’re going through because it’s their job to take care of you.”
“If they don’t hear our needs, how can they help us?” McDorman questions, urging. “If you want to see change, you have to be involved in change. We need our entire industry to come together.”
Want more? Check out the January 2023 issue of Texas Automotive!