Moving Legislative Mountains: Overcoming Hurdles and On the Way to Austin

by Chasidy Rae Sisk

Since the last legislative session ended in 2021, ABAT has been diligently working on its plans for the 88th legislative session, which includes two vital bills designed to protect consumers and collision repair facilities alike: their Safe Repair and Fair Appraisal bills. (Get the full scoop on ABAT’s 2023 legislative agenda at grecopublishing.com/txa0123coverstory.)

The association dedicated its time to educating auto body professionals, consumers and legislators; they explained their challenges and concerns with insurers’ egregious actions that negatively impact Texas drivers in order to garner support, and they have partnered on initiatives to increase public awareness with consumer-focused groups like Texas Watch through their Call Kelly campaign.

Among those many endeavors, one of the most fruitful may have been the testimony related to the Right to Appraisal that ABAT President Burl Richards and Robert McDorman (Auto Claim Specialists) provided at the public hearing held by the Texas House Committee on Insurance in September 2022. As a result of that hearing, the committee wrote in its report, “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.”

Further, the Texas Department of Insurance’s (TDI) 2022 Biennial Report identified the need for legislators to “establish policy form appraisal guidance” under its policy considerations (though true to ABAT’s experience with TDI, they did not actually offer any actionable recommendations on the matter); however, most recently, ABAT leaders were further encouraged last month when the Office of Public Insurance Counsel (OPIC) released its Report to the 88th Texas Legislature – a report which included the recommendation that Right to Appraisal be included as a mandatory part of all insurance policies!

According to Texas Insurance Code, OPIC has been given the ability to “recommend legislation to the legislature that the public counsel determines would positively affect the interests of insurance consumers,” as the department clarified in its report before going on to recommend legislation that would “require personal auto and residential property insurers in Texas to preserve the insurance consumer’s right to invoke appraisal in disputes regarding the cost to repair or the amount of a total loss.”

OPIC expressed increasing concern with “restrictions on appraisal in policy forms filed by top insurers [which] can adversely impact consumers, who buy insurance to make sure damage to their property will be repaired or replaced. Without appraisal, they may be forced to choose between accepting the insurer’s offer and paying out-of-pocket for any disputed amount, or taking on the costly and time-consuming burden of going to court.”

In addition to listing the cases in which insurers have attempted to limit Right to Appraisal in their policies, the report also identified insurers’ three justifications for limiting or eliminating appraisal, offering rebuttals to each and providing a strong rationale for their recommendation: “The fact remains that appraisal still does what it is intended to do – resolve the amount of loss.”

The report further emphasized the value of appraisal by explaining, “Restrictions on appraisal can remove an important consumer protection that saves the parties and the judicial system time and resources. Appraisal is usually the consumer’s only economically realistic option for challenging the amount an insurer offers to repair or replace property. Filing a lawsuit is expensive – often more expensive than the amount of an auto repair claim. Eliminating appraisal leaves the consumer stuck in the middle of a dispute between the insurer and providers over the amount of loss.” (Read OPIC’s 2023 Recommendations Report in its entirety at
bit.ly/OPIC2023.)

“OPIC’s recommendation that the Appraisal Clause become mandatory is very important news,” Richards stressed. “Our bills are filed and have support on both sides of the political spectrum, so everything is trending well and our odds are looking great for getting both pieces of legislation passed this year.”

“This is a great step in the right direction,” ABAT Executive Director Jill Tuggle agreed. “OPIC’s support strengthens our fight, and I’m certain we’re going to make even more progress leading up to Collision Day at the Capitol at the end of February – and we hope that Texas shops will be encouraged by this news and join us in Austin to help ensure we carry these bills across the finish line this year.”

The progress ABAT has made so far is great, but as Tuggle pointed out, the fight isn’t over yet…

En Route to Collision Day at the Capitol!

Next up: On February 23, ABAT members will head to Austin for Collision Day at the Capitol, an association-sponsored event designed to educate legislators on the association’s two initiatives for this legislative session, both being sponsored by Representative Travis Clardy (R-Nacogdoches):

    •  House Bill 1321, the most recent iteration of ABAT’s Safe Repair legislation, which seeks to require proper repairs based on OEM-recommended processes, in addition to addressing the differences between original and aftermarket parts. The bill (available in its entirety at bit.ly/ABAThb1321) also attempts to eliminate the “gray” areas as to what a proper repair is and how insurers indemnify policyholders.

    •  House Bill 1437, ABAT’s second pass at an Appraisal Clause bill, which would require insurers to include Right to Appraisal in all policies. (The bill is available in its entirety at bit.ly/ABAThb1437.)

Industry members who attend Collision Day will receive educational materials to share with lawmakers to help them explain the two proposed bills. ABAT hopes that auto body professionals from all corners of the Lone Star State will make the trip to the state Capitol to lend their support to this important initiative and make this year’s event even more successful than its inaugural occurrence in 2019 which drew nearly 100 industry professionals (and maybe Texas repairers could stand to show that everything really IS bigger in Texas by outdoing Massachusetts’ labor reimbursement rate reform rally last May which drew over 300 collision industry professionals; read more at grecopublishing.com/near0722coverstory).

“We need everyone to get involved,” urged Tuggle, who provides more thoughts about ABAT’s 2023 Collision Day at the Capitol on page 6. “We need to talk with legislators and let them know the struggles we face every day just to fix cars safely and be paid fairly for what we do. It’s going to take all of us meeting with legislators, educating them on repair safety issues and passing out information on our proposed bills to move the needle, but I truly believe we’re got what it takes to get our Safe Repair bill and our Appraisal Clause bill passed this year if we all come together to make our needs known!

“We need every collision repair professional in Texas to take action – call your legislators, email them or SHOW UP in Austin at the end of the month to let them know how important these bills are to their constituents…you and your customers,” she continues. “Until we raise awareness of our problems and concerns and really make some noise to get their attention, we’re never going to see the change we need, the change we deserve. Stand up for your customers. Stand up for your industry. Stand up for yourselves – by showing up and making a difference.”  

 

Want more? Check out the February issue of Texas Automotive!