In his Biennial Report of the Texas Department of Insurance given to the state legislature, Texas Insurance Commissioner Mike Geeslin called for increased regulation of insurer-shop DRP relationships.
In his report, Geeslin says the Texas Department of Insurance (TDI) has received complaints that insurers improperly steer claimants to "preferred" or DRP shops and that insurers are informing claimants that they may be responsible to pay for certain repair costs if the claimant selects a repair facility that is not on the insurer’s list of direct repair facilities. A 2010 survey of the top five auto insurers in Texas showed that all had some kind of DRP or preferred shop program in place.
Further complicating matters, Geeslin noted that Texas law does not consistently regulate auto insurers. County mutual insurers, which make up roughly 45 percent of the auto insurance market in the state, are not required to comply with regulations regarding vehicle repair.
Due to these issues, Geeslin recommended the legislature make the following amendments to Texas law:
Require insurers to provide written notice to claimants outlining their policies and procedures for claims and repair processes performed at direct repair facilities and non-direct repair facilities, including how those procedures, processes and claims payments may differ. This should provide claimants with a better understanding regarding the repair/claim process under an automobile insurance policy.
Make county mutual insurers subject to Insurance Code §§1952.301-307. This would allow all claimants the right to select an automobile repair person or facility and the type of parts or products used to repair their vehicles.
Require insurers to provide a written disclosure upon request to automobile repair facilities outlining the requirements to become a contracted direct repair facility. This would allow all automobile repair facilities an equal opportunity to understand the requirements of becoming a contracted direct repair facility.