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Thursday, 24 March 2011 16:25

Bills Introduced in TX Require Full Disclosure About DRP Policies

Texas Representative Craig Eiland introduced House Bill 2276 to the Texas House of Representatives on March 10; the bill is aimed at restricting insurers from limiting the parts, labor charges and repair shop the insured may choose to use.

“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) specifying maximum labor charges for the repair of the vehicle; or (3) limiting the beneficiary of the policy to selecting a repair person or facility to repair damage to the vehicle from a list provided to the beneficiary by the insurer,” the bill states.

The bill also addresses full disclosure of an insurers repair policies and processes for claim payments through a direct repair facility and a non-direct repair facility to the insured. According to the bill insurers must also disclose to non-direct repair shops the processes and requirements to gain the DRP contract with that insurer.

Eiland, who is Vice Chair of the House Insurance Committee, introduced the bill to the House, while Senator Mike Jackson introduced a companion bill to the Senate.

That bill, Senate Bill 1300, has been filed but not assigned to a committee.

According to Larry Cernosek with the Houston Auto Body Association (HABA), the bill will “level the playing field for all shops. It will not nor is it intended to do away with direct repair shops.”

“The HABA is in full support of HB 2276. This Bill is not only protects the Collision Industry but more importantly protects the rights of consumers in Texas on several different levels,” said James Brown, HABA’s President, “The main challenges we face ahead will be educating all of our State Legislators on ... how important it is that they support this Bill.”

Both bills would go into effect September 1, 2011 if passed..

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