Bill Text: TX SB1538 | 2021-2022 | 87th Legislature | Engrossed

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Bill Title: Relating to insurer restrictions and duties regarding repair of a motor vehicle covered under an insurance policy.

Spectrum: Slight Partisan Bill (Democrat 2-1)

Status: (Engrossed - Dead) 2021-05-06 - Referred to Insurance [SB1538 Detail]

Download: Texas-2021-SB1538-Engrossed.html

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By: Menéndez, Alvarado, Campbell S.B. No. 1538

A BILL TO BE ENTITLED
AN ACT
relating to insurer restrictions and duties regarding repair of a
motor vehicle covered under an insurance policy.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1952.301, Insurance Code, is amended to
read as follows:
Sec. 1952.301. LIMITATIONS AND DUTIES REGARDING REPAIR OF
MOTOR VEHICLE [LIMITATION ON PARTS, PRODUCTS, OR REPAIR PERSONS OR
FACILITIES PROHIBITED]. (a) In this section:
(1) "New motor vehicle" has the meaning assigned by
Section 2301.002, Occupations Code.
(2) "Non-original equipment" means a part, product, or
repair process used in the repair of a motor vehicle that is not
made by or for or used by that vehicle's manufacturer or
distributor.
(b) Under an automobile insurance policy that is delivered,
issued for delivery, or renewed in this state, for damage to a motor
vehicle that has been owned by the insured for 36 months or less and
that was a new motor vehicle when delivered to the insured, the
insurer:
(1) shall require that a part, product, or repair
process used to repair the vehicle be the original equipment
manufacturer's or distributor's part, product, or repair process,
unless the insured opts to use non-original equipment in accordance
with Subsection (f); and
(2) may not limit the beneficiary of the policy from
selecting a repair person or facility to repair damage to the
vehicle.
(c) Under [Except as provided by rules adopted by the
commissioner, under] an automobile insurance policy that is
delivered, issued for delivery, or renewed in this state, an
insurer may not directly or indirectly limit the insurer's coverage
under a policy covering damage to a motor vehicle that has been
owned by the insured for more than 36 months by:
(1) specifying the brand, type, kind, age, vendor,
supplier, or condition of parts or products or the repair process
that may be used to repair the vehicle; or
(2) limiting the beneficiary of the policy from
selecting a repair person or facility to repair damage to the
vehicle.
(d) In settling a liability claim by a third party against
an insured for property damage claimed by the third party for damage
to the third party's motor vehicle that has been owned by the third
party for 36 months or less and that was a new motor vehicle when
delivered to the third party, an insurer:
(1) shall require that a part, product, or repair
process used to repair the vehicle be the original equipment
manufacturer's or distributor's part, product, or repair process,
unless the third-party claimant opts to use non-original equipment
in accordance with Subsection (f); and
(2) may not require the third-party claimant to use a
particular repair person or facility to repair damage to the
vehicle.
(e) [(b)] In settling a liability claim by a third party
against an insured for property damage claimed by the third party to
a motor vehicle that has been owned by the insured for more than 36
months, an insurer may not require the third-party claimant to have
the motor vehicle 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 or a particular repair
process.
(f) An insured or third-party claimant may opt to accept the
use of non-original equipment in the repair of the insured's or
claimant's motor vehicle by signing a written disclosure. The
disclosure must:
(1) be signed before repair of the vehicle begins;
(2) be delivered as an attachment to a written
estimate provided for the repair of the vehicle;
(3) be written in at least a 12-point font; and
(4) include the following language:
"I am opting to accept the use of a non-original equipment
manufacturer's or distributor's part, product, or repair process in
the repair of my vehicle, and I understand and agree that:
1. the attached repair estimate is based on the use of
a non-original equipment manufacturer's or distributor's part,
product, or repair process that is supplied by a manufacturer or
distributor that is not my motor vehicle's manufacturer or
distributor; and
2. the warranty for the non-original equipment
manufacturer's or distributor's part, product, or repair process is
provided by the manufacturer or distributor of that part, product,
or repair process and not by my motor vehicle's manufacturer or
distributor."
(g) An insurer that delivers, issues for delivery, or renews
an automobile insurance policy in this state may not require or
request that a repair person or facility use any specific
percentage of non-original equipment in the repair of a motor
vehicle.
SECTION 2. The change in law made by this Act applies only
to an insurance policy that is delivered, issued for delivery, or
renewed on or after January 1, 2022. A policy delivered, issued for
delivery, or renewed before that date is governed by the law as it
existed immediately before the effective date of this Act, and that
law is continued in effect for that purpose.
SECTION 3. This Act takes effect September 1, 2021.