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COMMISSIONER'S BULLETIN # B-0050-98

Automobile Series Letter No. 721

July 15, 1998


To: ALL INSURANCE COMPANIES, CORPORATIONS, EXCHANGES, MUTUALS, RECIPROCALS, ASSOCIATIONS, LLOYDS, OR OTHER INSURERS WRITING AUTOMOBILE INSURANCE IN THE STATE OF TEXAS AND TO THEIR AGENTS AND REPRESENTATIVES AND THE PUBLIC GENERALLY


Re: Commissioner´s Order No. 98-0715, adoption of 28 TAC § 5.501.

The Commissioner of Insurance, by Commissioner´s Order No. 98-0715, Docket No. 2354, has adopted for the Texas Administrative Code a new Section 5.501 (28 TAC § 5.501) on procedures an insurer must follow to give the required notice to an insured or third-party claimant regarding motor vehicle repair rights under the Insurance Code, Article 5.07-1, as amended by House Bill 423, 75 th Texas Legislature, 1997. The new rule is quoted below.

§5.501. Notice Requirements To Claimants Regarding Motor Vehicle Repairs.

(a) The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

Business day-a day other than a Saturday, Sunday, or holiday recognized by the State of Texas.

Insurer-an insurer or any person authorized to act on behalf of an insurer regarding damage to a vehicle, regardless of whether employed by the insurer.

(b) An insurer must give the notice prescribed by subsection (h) of this section (hereinafter referred to as the written notice) to any insured or third-party claimant who makes a claim regarding damage to a vehicle. If a claimant presents the vehicle to the insurer in connection with a claim for damage repair, or otherwise makes the claim in person, the written notice must be given to the claimant at that time.

(c) If the claim is made instead in writing (including e-mail or FAX), an insurer must mail the written notice to the claimant within three business days of receiving notice of the claim, unless the insurer otherwise delivers the claimant the written notice within those three business days.

(d) If the claim is made by telephone, an insurer must:
(1) mail the written notice to the claimant within three business days; or
(2) give the verbal notice prescribed by subsection (i) of this section (hereinafter referred to as the verbal notice) to the claimant at the time of the claimant´s telephone call and mail the written notice to the claimant within 15 business days of receiving notice of the claim.

(e) An insurer, if it chooses to address the liability issue initially, may send or deliver its own letter along with the written notice. The written and verbal notice may include the Optional Provision. The written notice must be on a separate page from any letter or other material, except as otherwise provided in this section.

(f) Notwithstanding any other subsection of this section, no insurer is required to furnish more than one written notice to the insured or third party claimant in regard to the claim.

(g) These notice requirements do not apply to towing and labor costs coverage.

(h) The written notice must be printed in at least ten point type, must be attached to, or printed on the reverse side of, a copy of the Insurance Code, Article 5.07-1, and must read as follows:

[OPTIONAL PROVISION]

THIS NOTICE IS REQUIRED BY LAW. IT DOES NOT CONSTITUTE AN ADMISSION OF LIABILITY BY THE INSURANCE COMPANY.

REQUIRED NOTICE TO INSURANCE CLAIMANTS FOR MOTOR VEHICLE REPAIRS

BY LAW, YOU HAVE THE RIGHT TO SELECT WHERE YOUR MOTOR VEHICLE IS REPAIRED AND THE PARTS USED FOR REPAIRS. HOWEVER, AN INSURANCE COMPANY IS NOT REQUIRED TO PAY MORE THAN A REASONABLE AMOUNT FOR SUCH REPAIRS AND PARTS. YOUR RIGHTS REGARDING MOTOR VEHICLE REPAIRS ARE EXPLAINED IN THE COPY OF THE INSURANCE CODE, ARTICLE 5.07-1, PRINTED ON THE REVERSE SIDE OF THIS NOTICE OR ATTACHED TO THIS NOTICE. IF YOU ARE INSURED BY THE COMPANY FOR THE DAMAGE, YOUR RIGHTS ARE EXPLAINED IN MORE DETAIL IN YOUR INSURANCE POLICY.

IF YOU HAVE ANY QUESTIONS ABOUT YOUR MOTOR VEHICLE REPAIR RIGHTS, CONTACT THE TEXAS DEPARTMENT OF INSURANCE AT:

TELEPHONE: 1-800-252-3439
MAILING ADDRESS: TEXAS DEPARTMENT OF INSURANCE
P.O. BOX 149091
AUSTIN, TX 78714-9091
FAX NUMBER: 512-475-1771
WEB ADDRESS: www.tdi.state.tx.us

(i) the verbal notice at a minimum must consist of the following:

BY LAW, YOU HAVE THE RIGHT TO SELECT WHERE YOUR MOTOR VEHICLE IS REPAIRED AND THE PARTS USED FOR REPAIRS. HOWEVER, AN INSURANCE COMPANY IS NOT REQUIRED TO PAY MORE THAN A REASONABLE AMOUNT FOR SUCH REPAIRS AND PARTS. YOUR RIGHTS CONCERNING MOTOR VEHICLE REPAIRS ARE EXPLAINED IN THE INSURANCE CODE, ARTICLE 5.07-1, A COPY OF WHICH WILL BE MAILED TO YOU WITHIN 15 BUSINESS DAYS.

IF YOU HAVE ANY QUESTIONS ABOUT YOUR MOTOR VEHICLE REPAIR RIGHTS, CONTACT THE TEXAS DEPARTMENT OF INSURANCE AT 1-800-252-3439.

Section 5.501 was adopted to become effective August 17, 1998.

David P. Durden
Deputy Commissioner
Automobile And Homeowners Group



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