Texas Organization Calls for Investigation into Insurer's Repair Practices

Aug. 11, 2017
Texas Watch, a non-partisan citizen advocacy organization dedicated to ensuring that insurance companies and other corporations are accountable to their customers, requested Thursday that the Texas Department of Insurance (TDI) investigate the insurance industry’s corner cutting automobile repairs.

Aug. 11, 2017—Texas Watch, a non-partisan citizen advocacy organization dedicated to ensuring that insurance companies and other corporations are accountable to their customers, requested Thursday that the Texas Department of Insurance (TDI) investigate the insurance industry’s corner cutting automobile repairs.

In its release, Texas Watch references a federal lawsuit that is accusing State Farm Auto Insurance of forcing John Eagle Collision Center in Dallas to cut costs by using a dangerous, untested adhesive to replace a hail damaged steel roof. The complaint blames the defective car repair for crushing and burning the owners of a used 2010 Honda Fit when their car was struck in an accident.

The Texas Watch request urges TDI to take vigorous enforcement action to discourage the practice and uphold the agency’s statutory duty to “protect and ensure the fair treatment of consumers.”

Deputy director Tori Sommerman released the following statement:

“The purpose of insurance is to have our property, safety, and lives restored after a crash. When insurers prioritize the bottom line, and pressure body shops into unsafe, shoddy repairs, Texans’ lives are put at risk.

“Recent reporting demonstrates the tragic consequences of insurance companies pressuring drivers into using industry-preferred body shops where insurers can push for cheap, substandard repairs. We hope that TDI will crack down on these industry wrongdoers and ensure Texans’ safety as they get back on the road after a crash.

“Texans can ensure their vehicle is repaired safely by asking the body shop to use Original Equipment Manufacturer (OEM) parts and put the repairs made and parts used in writing.”

Here is Texas Watch's official request:

                                                August 10, 2017

Via electronic mail ([email protected])

Texas Department of Insurance
Attn: Deputy Commissioner Mark Einfalt
Compliance Division
P.O. Box 149104
Austin, Texas 78714-9104

         Re: Investigation of insurance industry’s auto repair practices; threats to public safety

Dear Mr. Einfalt,

Texas families face threats from the insurance industry’s corner cutting on automobile repairs. We
request that the Texas Department of Insurance (TDI) mount an immediate and thorough investigation
into industry practices, taking vigorous enforcement action in order to uphold the agency’s statutory
duty to “protect and ensure the fair treatment of consumers.”

In 2011, TDI noted its “concerns that setting reimbursement rates artificially low for specific motor
vehicle repairs and parts that are used to make the repairs may lead to substandard repairs.” 1 Recent
reporting demonstrates that these valid concerns are all-the-more relevant today. 2 When insurers steer
the public to their preferred body shops, whether directly or indirectly through financial pressure tactics,
and then push body shops to make cheap, substandard repairs, the consequences are devastating.

Texas laws intend for the public to be protected from these practices, but laws are just ink on paper
until they are enforced through our courts and agencies. 3 We ask TDI to hold industry wrongdoers
accountable through all available means and without delay given the many lives at stake.

Respectfully,

Ware Wendell
Executive Director

1
  “Commissioner’s Bulletin # B-0026-11,” Texas Department of Insurance, 6/20/11,
http://www.tdi.texas.gov/bulletins/2011/cc25.html.
2
  See, e.g., “Dallas lawyer: State Farm directed shoddy hail damage repair that trapped couple in burning car,”
Tracy M. Cook, Dallas Morning News, 8/5/17, https://www.dallasnews.com/business/autos/2017/08/04/dallas-
lawyer-state-farm-directed-shoddy-hail-damage-repair-trapped-couple-burning-car; “Hidden car repair led to
disfiguring injuries, couple claims,” Jason Whitely, WFAA, 7/26/17, http://www.wfaa.com/news/local/dallas-
county/hidden-car-repair-led-to-disfiguring-injuries-couple-claims/459811762.
3
  See, e.g., TEX. INS. CODE § 1952.301, et seq.; 28 TEX. ADMIN. CODE § 5.501; & TEX. PEN. CODE § 32.42.
    2121 E. 6TH ST, SUITE 201, AUSTIN, TEXAS 78702 | (512) 381-1111 | WWW.TEXASWATCH.ORG

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