The Commissioner of Insurance, by Commissioner´s Order No. 98-0795, Docket No. 2359, has adopted amendments to the Texas Automobile Rules and Rating Manual (the Manual), Rule 75.C.1.a., involving surcharges under the Texas Driving Insurance Plan. In assigning surcharge points for auto accidents, bodily injury will no longer be a factor, and the property damage threshold is changed from $500 to $1000.
Manual Rule 75.C.1.a. (Rule 75) currently requires assignment of a surcharge point to an insured who has an at-fault auto accident resulting in any bodily injury. An example would be minimal expenses for a doctor´s examination for very minor injuries resulting from an auto accident. It is a matter of concern that those minimal expenses significantly affect the insured´s premiums. There would be many practical problems in establishing a specific dollar amount threshold for bodily injury, as explained in some of the comments filed in this proceeding. To avoid the above problems, bodily injury (including death) is being eliminated as a factor in regard to surcharges. Generally speaking, an accident that results in serious bodily injury will also result in property damage exceeding the $1000 threshold, resulting in a surcharge.
Currently Rule 75 requires assignment of a surcharge point to an insured who has an at-fault auto accident resulting in property damage in excess of $500, regardless of whether anyone is injured. The rule formerly provided for a property damage threshold of $200 for accidents occurring prior to February 1, 1985. Since 1985, repair costs have increased significantly and the distribution of automobiles on the road has changed dramatically. Consequently, very minor damage can easily exceed $500. Therefore, the $500 property damage threshold is changed to $1000. This amount is supported by data and methodology explained in Staff´s petition.
Rule 75 requires assignment of a surcharge point when there is an auto accident resulting in property damage in excess of $500, without further description. The order adopts new wording in Rule 75.C.1.a., to specify that the property damage amount is to be established by claims paid in regard to the accident. The new wording also specifies that claims paid are determined according to requirements for loss reporting under the Texas Private Passenger Automobile Statistical Plan. This new standard should be more readily ascertainable than the total amount of damage caused by the at-fault driver, resulting in more consistency in determining whether the surcharge is applicable in any given case.
The amendments were adopted to become effective on September 1, 1998.
Rose Ann Reeser
Senior Associate Commissioner
Regulation And Safety