TEXAS INSURANCE COMPANIES GIVEN WARNING OVER DUBIOUS PRACTICES

TEXAS INSURANCE COMPANIES GIVEN WARNING OVER DUBIOUS PRACTICES

Texas insurance companies are under the spotlight with the state’s insurance commissioner, Mike Geeslin, unhappy over the propensity of certain companies to limit their policyholder’s choice of repair shop.

The state’s insurance code doesn’t allow insurance companies to dictate terms such as type and condition of auto parts used as well as the policyholder’s choice of repair company.

Giving extra notice regarding vehicle repairs to consumers is strictly forbidden by state statutes yet some companies are doing precisely that.

According to the Texas Insurance Code (TIC), no insurance company has the power to suggest or demand a consumer to choose a particular repair shop. Any company that does this is in breach of Chapter 1952, subchapter G of the TIC.

The Texas Administrative Code (TAC) states that an insurance company must specify

to their clients that they are allowed choose whichever repair shop they like so long as they are not forced to pay unreasonable amounts.

Interestingly, Geeslin believes that this gives some insurance companies the impression that they can charge the policyholder more if they don’t have the repairs carried out by a company on the insurer’s approved list. This could be against the rules of the TIC and TAC because it violates the consumer’s right to choose their own repair company.

Also, certain companies only pay out extremely low reimbursement rates which means that policyholders are forced to have low quality repairs done which renders their vehicle unfit for the road.

Generally, personal auto insurance policies should force the insurer to pay an amount that equates to high quality repairs or a replacement vehicle of a similar standard. The current practice of insurers paying less than what they should has been blasted by the state Insurance Department as it can lead to substandard repairs which are dangerous. The Department has been put on record as stating that it will pursue any insurance companies that don’t pay out the requisite amount.