BILL ANALYSIS |
C.S.H.B. 3804 |
By: Clardy |
Insurance |
Committee Report (Substituted) |
BACKGROUND AND PURPOSE
Interested parties have expressed concern over restrictive automobile insurance policies. C.S.H.B. 3804 seeks to address this issue by providing for certain prohibitions on insurer practices, including limiting coverage, with respect to the repair of motor vehicles. |
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CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
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RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
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ANALYSIS
C.S.H.B. 3804 amends the Insurance Code to prohibit an insurer, an employee or agent of an insurer, an insurance adjuster, or an entity that employs an insurance adjuster, under an automobile insurance policy that is delivered, issued for delivery, or renewed in Texas, from directly or indirectly limiting the insurer's coverage under a policy covering damage to a motor vehicle by intimidating, coercing, or threatening the beneficiary to induce the beneficiary to use a particular repair person or facility or by offering an incentive or inducement, other than a warranty issued by the insurer or a repair person or facility, for the beneficiary to use a particular repair person or facility. The bill extends to an employee or agent of an insurer, an insurance adjuster, and an entity that employs an insurance adjuster the prohibition against directly or indirectly limiting the insurer's coverage under such a policy by limiting the beneficiary of the policy from selecting a repair person or facility to repair damage to the vehicle, specifies that such limitation is a limitation on the beneficiary of the policy from selecting a repair person or facility to repair damage to the vehicle to the vehicle's condition before the damage occurred in order for the beneficiary to obtain the repair without owing any out-of-pocket cost other than the deductible, and removes the exception to such prohibition as provided by rules adopted by the commissioner of insurance. The bill extends to an employee or agent of an insurer, an insurance adjuster, and an entity that employs an insurance adjuster the prohibitions against, in settling a liability claim by a third party against an insured for property damage claimed by the third party, requiring 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 and specifies that such use is to repair damage to the vehicle to the vehicle's condition before the damage occurred. The bill prohibits an insurer, an employee or agent of an insurer, an insurance adjuster, or an entity that employs an insurance adjuster, in settling such a claim, from intimidating, coercing, or threatening the third‑party claimant to induce the claimant to use a particular repair person or facility or from offering an incentive or inducement, other than a warranty issued by the insurer or a repair person or facility, for the third‑party claimant to use a particular repair person or facility.
C.S.H.B. 3804 prohibits an insurer, an employee or agent of an insurer, an insurance adjuster, or an entity that employs an insurance adjuster, in connection with the repair of damage to a motor vehicle covered under an automobile insurance policy, from disregarding a repair operation or cost identified by an estimating system, including the system's procedural pages, selected by the insurer for use in writing the automobile repair estimate for the motor vehicle. The bill, for purposes of the prohibition against an insurer, an employee or agent of an insurer, an insurance adjuster, or an entity that employs an insurance adjuster restricting in connection with the repair of damage to a motor vehicle covered under such a policy the right of a beneficiary or third-party claimant to choose a repair person or facility by requiring the beneficiary or third-party claimant to travel a certain distance to repair the damage, replaces the specification of such distance from an unreasonable distance to a distance considered inconvenient by a beneficiary or third-party claimant.
C.S.H.B. 3804 excludes from the term "repair person or facility," for purposes of policy provisions and forms for automobile insurance regarding the repair of motor vehicles, a person who exclusively provides automobile glass replacement, glass repair services, or glass products. The bill applies only to an insurance policy that is delivered, issued for delivery, or renewed on or after January 1, 2018.
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EFFECTIVE DATE
September 1, 2017.
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COMPARISON OF ORIGINAL AND SUBSTITUTE
While C.S.H.B. 3804 may differ from the original in minor or nonsubstantive ways, the following comparison is organized and formatted in a manner that indicates the substantial differences between the introduced and committee substitute versions of the bill.
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