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Texas Department of Insurance Issues Warning to Insurers on Steering


The Texas Department of Insurance (DOI) recently issued a bulletin to insurance companies reminding them of their responsibilities to claimants regarding payment for damage to motor vehicles and the selection of a repair person or facility in accordance with the law.

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Section 1952.301 of the Texas Insurance Code (TIC) specifies that an insurer may not directly or indirectly limit the insurer’s coverage under a policy covering damage to a motor vehicle by:

1. Specifying the brand, type, kind, age, vendor, supplier or condition of parts or products that may be used to repair the vehicle; or

2. Limiting the beneficiary of the policy from selecting a repair person or facility to repair damage to the vehicle.

Section 1952.302 of the TIC specifies that an insurer, an employee or agent of an insurer, an insurance adjuster or an entity that employs an insurance adjuster may not state or 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.


Section 5.501 of the Texas Administrative Code requires an insurer to provide a notice to the insured or third-party claimant who makes a claim regarding damage to a vehicle. The required notice specifies that a claimant has the right to select where a motor vehicle is repaired and the parts used for repairs. The notice also specifies that an insurer is not required to pay more than a reasonable amount for such repairs and parts.

The bulletin also mentions that the DOI 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,” the bulletin reads. “It’s 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 vehicle warranty.” 

More information: 

Read the bulletin

Texas Department of Insurance


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