USE OF AFTER MARKET PARTS FOR VEHICLE REPAIRS IN TEXAS

Car Repair.jpgIf you car is damaged in a accident and you file a claim with your insurance company, you may be told that you have to have the vehicle repaired at a certain facility or that you must use certain types of parts to repair the vehicle. If this happens to you, your insurance company could be in violation of Sections 1952.301 through 1952.307 of the Texas Insurance Code.

These sections provide that under an automobile insurance policy that is delivered, issued or renewed in this state, an insurer may not directly or indirectly limit the insurer’s coverage under a policy covering damage to a motor vehicle by specifying the brand, type, kind, age, vendor, supplier, or condition of parts or products that may be used to repair the vehicle; or limiting the policy holder from selecting a repair person or facility to repair damage to the vehicle.

These sections also state that, in settling a liability claim by a third party against an insured for property damage claimed by the third party, an insurer may not require the third-party claimant to have repairs made by a particular repair person or facility or to use a particular brand, type, kind, age, vendor, supplier, or condition of parts or products.

These sections prohibit the insurer, an employee or agent of the insurer, an insurance adjuster, or an entity that employs an insurance adjuster from:
(1) soliciting or accepting a referral fee or gratuity in exchange for referring a policy holder or third-party claimant to a repair person or facility to repair the damage;
(2) stating or suggesting, either orally or in writing, to a policy holder that the policy holder must use a specific repair person or facility or a repair person or facility identified on a preferred list compiled by the insurer for the damage repair or parts replacement to be covered by the policy; or (3) restricting the right of a policy holder or third-party claimant to choose a repair person or facility by requiring the policy holder or third-party claimant to travel an unreasonable distance to repair the damage.

Under these sections an insurer may not prohibit a repair person or facility from providing a policy holder or third-party claimant with information that states the description, manufacturer, or source of the parts used and the amounts charged to the insurer for the parts and related labor.

These sections provide that a contract between an insurer and a repair person or facility, including an agreement under which the repair person or facility agrees to extend discounts for parts or labor to the insurer in exchange for referrals by the insurer, may not result in a reduction of coverage under an insured’s automobile insurance policy.

At the time a motor vehicle is presented to an insurer, an insurance adjuster, or other person in connection with a claim for damage repair, the insurer, insurance adjuster, or other person must provide to the policy holder or third-party claimant notice of the provisions of these sections.

A policy holder, third-party claimant, or repair person or facility may submit a written, documented complaint to the Texas Department of Insurance to report a violation of these sections.

At the Law Office of Stephen O’Rear, P.C. we help people with insurance disputes.