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Tuesday, 19 May 2015 00:00

Controversy Erupts Over TX Senate Bill 1628

A controversial bill was recently passed by the Texas Senate that has possible implications for those in the collision repair industry. Some say Senate Bill 1628 is aimed to end “frivolous” lawsuits filed against insurance companies. Others warn that it will become harder to recover certain damages from insurers.

According to an article written by Repairer Driven News on May 1, the bill would make it more difficult for property owners to sue insurance companies for unpaid claims as well as limit the amount they can collect.

“The bill was inspired by a boom in property damage lawsuits over insurance claims following hailstorms in Texas, and collision repairers having their own battles with comprehensive insurers over hail might be able to relate to homeowner’s frustrations,” Repairer Driven News wrote in the article titled, “Texas homeowner hail lawsuit-restriction bill should worry collision repairers.”

The bill would establish a two-year time limit on seeking claims. The Texas Tribune wrote in a recent article that policyholders would have to provide advance written notice, sign a statement attesting that damages occurred and show proof of damages before being allowed to sue for deceptive acts or unfair claims handling. The newspaper said the bill would also offer certain new immunity protections to insurance agents and adjusters who are named in lawsuits and lower the penalty that insurance companies face for late payments.

“Democrats and trial lawyer-backed groups have adamantly opposed the measure, arguing that it takes away property owner rights that have been enshrined in Texas insurance law for decades,” Jay Root and Julián Aguilar wrote in The Texas Tribune article, “Senate Bill Makes it Harder to Sue Insurers.”

Those against the legislation warn that filing an insurance claim could become much more cumbersome if the bill becomes a law, according to Brett Crandall of valleycentral.com.  

In an article written by Alex Winslow in the Houston Chronicle, he said, “Unbelievably, this bill could also grant full legal immunity to adjusters, agents and other insurance-company representatives, even when they have made intentional misrepresentations to policyholders. That means insurance employees will be free to lie and cheat without fear of legal action. In other words, when it comes to protecting Texans from big insurance, your state's taxpayer-funded courtroom doors will be closed."

The Houston Auto Body Association (HABA) is encouraging shops to contact the House Insurance Committee members and ask them to vote against passing the bill. “Its title of bill is misleading and the real intent is to restrict our rights andprotect the insurance industry,” HABA recently said.

The website listing the Texas House of Representatives committee members is: http://www.house.state.tx.us/committees/committee/?committee=320

Currently, Texas has the third highest homeowner insurance rates in the country.

Sponsored by State Senator Larry Taylor, the bill was introduced to the Senate Business and Commerce Committee on March 12. It was approved by the Senate on April 30 and sent to the House Insurance Committee on May 4. Before the bill becomes law, it must be debated, passed in the state House of Representatives and signed by the governor.

Autobody News will keep readers posted on new developments with this bill.

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