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Texas Insurance Code - Not Codified - Article 5.07-1. Repair Of Motor Vehicles; Disclosure Of Consumer Information

Legal Research Home > Texas Laws > Insurance Code - Not Codified > Texas Insurance Code - Not Codified - Article 5.07-1. Repair Of Motor Vehicles; Disclosure Of Consumer Information

Art. 5.07-1. REPAIR OF MOTOR VEHICLES;  DISCLOSURE OF 
CONSUMER INFORMATION.  

Article repealed effective April 1, 2007
	(a) Except as provided by rules duly adopted by the 
commissioner, under an auto insurance policy that is delivered, 
issued for delivery, or renewed in this state an insurer may not, 
directly or indirectly, limit its 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 by limiting the beneficiary of the policy 
from selecting a repair person or facility to repair damage to the 
motor vehicle covered under the policy.
	(b)  In connection with the repair of damage to a motor 
vehicle covered under an auto insurance policy, an insurer, an 
employee of an insurer, an agent of an insurer, a solicitor of 
insurance for an insurer, an insurance adjuster, or an entity that 
employs an insurance adjuster may not:
	(1)  solicit or accept a referral fee or gratuity in exchange 
for referring a beneficiary or third-party claimant to a repair 
person or facility to repair the damage;
	(2)  state or suggest, either orally or in writing, to a 
beneficiary that a specific repair person or facility or a repair 
person or facility identified on a preferred list compiled by an 
insurer must be used by a beneficiary in order for the damage repair 
or parts replacement to be covered by the policy;  or
	(3)  restrict a beneficiary's or third-party claimant's 
right to choose a repair person or facility by requiring the 
beneficiary or third-party claimant to travel an unreasonable 
distance to repair the damage.
	(c)  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 the insured's auto insurance policy.
	(d)  An insurer may not prohibit a repair person or facility 
from providing a beneficiary 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.
	(e)  At the time the vehicle is presented to an insurer or an 
insurance adjuster or other person in connection with a claim for 
damage repair, the insurer or insurance adjuster or other person 
shall provide to the beneficiary or third-party claimant notice of 
the provisions of this article.  The commissioner shall adopt a rule 
establishing the method or methods insurers shall use to comply 
with the notice provisions in this subsection.
	(f)  Any beneficiary, third-party claimant, or repair person 
or facility may submit a written, documented complaint to the 
department with respect to an alleged violation of this article.
	(g)  In the settlement of liability claims 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.
	(h)  The commissioner may exercise the rule-making authority 
under Article 21.21-2 of this code with respect to any fraudulent 
activity of any party to an agreement described by Subsection (c) of 
this article.
	(i)  Any rules adopted by the commissioner to implement this 
article shall include, but not be limited to, requirements that:
	(1)  any limitation described in Subsection (a) of this 
section is clearly and prominently displayed on the face of the 
policy or certificate in lieu of a policy;  and
	(2)  the insured give written consent to such a limitation, 
following both oral and written notification of any limitation at 
the time the policy is purchased.

Added by Acts 1991, 72nd Leg., ch. 242, Sec. 2.11, eff. Sept. 1, 
1991.  Amended by Acts 1997, 75th Leg., ch. 399, Sec. 1, eff. Sept. 
1, 1997.

Last modified: August 11, 2007