In response to the Texas Department of Insurance (TDI) labeling more than 500 consumer complaints submitted through the Auto Body Association of Texas (ABAT) as coming directly from consumers, ABAT has partnered with the advocacy group consumers, Texas Watch, to “revamp” its consumer complaint process.
The complaints were that policyholders were “unfairly undercompensated by their insurance companies during the collision repair process,” ABAT executive director Jill Tuggle said on Tuesday.
“We started submitting them to TDI and we’ve had roadblock after roadblock and they keep changing the rules of the game,” she said. “We’ve been forced to play by their rules many times and it just hasn’t gotten us where we need to be.”
The complaints were originally filed by ABAT on behalf of consumers with permission from TDI, according to Tuggle. She said TDI then backtracked and said ABAT could not submit consumers’ personal information and changed the name of each complaint to Tuggle’s.
“When they sent the complaints to the insurance companies, first, they kind of let them self-check, saying, ‘Hey, this person had a problem. What happened?’ …The answers we get are that I’m not a party to the claim and they don’t have to respond to the complaint. It stopped us dead in our tracks.
However, Tuggle added that ABAT will not stop fighting the issue and that she believes Taft has found the answer to making progress with TDI by working directly with consumers to file complaints and speak to their lawmakers. TDI did not respond within the publication deadlines to questions from Repairer Driven News regarding the complaints filed by ABAT.
Alongside ABAT’s issues with TDI, there is also a legislative issue that ABAT has advocated for – the mandatory right to evaluation.
Many auto insurance policies include an appraisal clause that allows policyholders to invoke it to have third-party appraisals performed when they disagree with their carrier’s appraisal of their vehicle. Low appraisals often result in total losses on vehicles that could have been repaired. The carrier and the policyholder hire an independent appraiser and if the appraisers cannot agree, an arbitrator is chosen to make the final decision.
That was the general norm for years in auto insurance claims litigation until 2014, when State Farm sought TDI’s approval to remove the clause from its policies. Approval was granted in 2015. Only one other insurer, GEICO, has sought permission to remove the clause since then in 2021, to which the Texas Office of Public Insurance Council (OPIC) filed an objection with TDI . The insurer’s request was rejected in July for failure to respond to questions from TDI.
“We’re concerned that if GEICO does this, all insurance companies will,” said Kelly Taft, organizing director for Texas Watch, who will handle consumer outreach for ABAT and Texas Watch.
The Texas House Insurance Committee held a public hearing in September on the issue of undercompensation and the right to invoke the assessment clause. Among the comments made, committee chair Dr. Tom Oliverson (R-District 130) said he saw an opportunity to conduct a study of the nearly eight years of data from the insurer that suppressed its evaluation clause.
During the last Texas legislative session, lawmakers considered HB 2354 by Rep. Travis Clardy (R-District 11) and SB 1706 by Senator César Blanco (D-District 29), who, according to ABAT, “would have streamlined the evaluation process and made it fair”. HB 2354 passed the House but stalled in the Senate. Tuggle said on Tuesday that similar, if not identical, assessment legislation would be tabled in the 2023 session.
“We’ve worked so hard over the last two and a half, three years to build momentum on this bill and educate lawmakers on these bills, so when you have all this momentum and you’ve passed all this time and all those resources to explain it, it’s hard to get away from it,” said ABAT President Burl Richards.
The issue has “really come to a head and really become a problem for a lot of consumers and stores” over the past year, Tuggle said. “We’re trying to get ahead of that and make sure the valuation clause…becomes state law and not just a recommendation from the Texas Department of Insurance.”
Initially, Tuggle said, insurance companies fought to have an appraisal clause in their policies “because it benefits them,” but now want to remove them.
“It’s important for insurance companies to pay claims on time and in full to get cars repaired safely,” Taft said. “If they don’t have that [appraisal] process in the policies and then their [policyholders’] the only other option is to go to small claims court, essentially, to try to get their insurance companies to pay.
Repairer Driven News asked TDI for comment on Tuggle’s explanation of its dealings with the department when filing consumer complaints through ABAT. TDI spokesman Ben Gonzalez replied: “When we receive a complaint, we always contact the relevant insurance company, agency or agent. We followed the same process with every complaint submitted by the Auto Body Association of Texas. If someone who is not the insured makes a complaint, particularly about reimbursement rates, there is often little we can do to help them obtain additional payment. It should be noted that TDI contacted a sample of policyholders in complaints submitted by ABAT; some consumers said they were unaware that complaints had been filed regarding their complaints.
He recommended that consumers who have a problem with a complaint follow the steps listed here, which include how to file a complaint with TDI.
The heart of the #nomoregames campaign is connecting with collision repair customers who have been undercompensated and advocating for safe and appropriate repairs, which starts with an online form for customers to complete. Repairers can direct their customers to texaswatch.org/saferepairs for more information about the campaign and to complete the form. Hard copies of it can be requested by contacting Taft at email@example.com. The form can also be used to call attention to insurance management complaints.
Each person who completes the form will be contacted by Texas Watch and offer assistance in filing a TDI complaint and contacting their legislator about their issue.
The objectives of the #nomoregames campaign are to:
- “Call all activists who have submitted the form[s] with ABAT to help them file a complaint with TDI;
- “Collect information on insurance misdeeds from 1,000 consumers;
- “Organize 1,000 consumers to contact their legislators; and
- “Identify the best stories to share with the media.”
“You have a lot of untapped political power in the form of your customers,” Taft told auto body repairers on Tuesday. “Every one of your clients who has had a problem with an insurance company is a voter of a legislator. I’m here to help your clients have their voices heard in Austin. If you can get your clients to us, we can. take it from there. … We can’t do this without you. Your role in connecting with your customers is critical in fighting for the mandatory review. Once you connect us with your customers, we will can help them file a complaint with the Texas Department of Insurance and also contact their legislators.
She added that each consumer’s contact information, including address (to put them in touch with their legislator) as well as the amount offered by their carrier to repair the vehicle and the repair estimate amount, are very important details on the form to be completed.
Once information about “insurance wrongdoing” is collected from 1,000 Texas auto insurance policyholders, Texas Watch will present the data to the legislature “so it can do what ‘There should and should be mandatory appraisal in Texas for auto insurance policies,’ Taft said.
Texas Watch will contact the more than 500 consumers who filed complaints through ABAT to file complaints directly with TDI.
“It’s now or never,” Tuggle said. “Sessions start in January and that doesn’t happen for another two years, so if this assessment bill doesn’t pass, we’ll have another two years for insurance companies to remove them from their policies and this can be a really big problem that will get worse in that time frame.
Featured image credit: ABAT/Texas Watch