On July 17, Texas Watch, a non-profit consumer advocacy organization, contacted the Texas Department of Insurance (TDI), asking for copies of all public documents and information related to “prevailing rate” policy language.
When asked why the advocacy group got involved in this topic, Texas Watch Executive Director Ware Wendell explained, “Prevailing rate is really, at base, a safety issue. If repair professionals can’t get paid enough to do the job the right way, consumers ultimately are the ones who suffer. They are under indemnified, their vehicles are devalued, and their lives are endangered. Insurers have been cherry-picking rates and forcing policy language on us that only benefits them. That needs to stop.”
“We pride ourselves on rigorously analyzing and presenting only the most reliable information to the public,” Wendell continued. “Through this open records request, we should obtain the exact policy language auto insurers are using today to artificially suppress rates – policy language that is unjust and deceptive should be disapproved by regulators.”
According to Texas Watch’s blog later in July, “We filed this open records request with the [TDI] to see the language auto insurers are using to limit the amount they pay for repairs. Inadequate payments lead to corner-cutting. Safety suffers. Insurance companies shouldn’t be able to threaten your family’s safety by writing policies that game the system.”
In the letter emailed to the TDI, Wendell wrote, “Please provide all documents, communications, and other public information within your possession pertaining to private passenger and commercial automobile policies and endorsements submitted for approval, approved, and/or disapproved by TDI within the last ten years containing the terms ‘prevailing rate’ or similar language. To be clear, we seek information about how insurers define the rate with which they will compensate facilities for repair work. We view adequate compensation as crucial to public safety because it supports investment in training, education, proper equipment, and the necessary time to make thorough and safe repairs to damaged vehicles.”
Citing Texas Government Code Chapter 552 as grounds for the request, Wendell reminded the TDI, “The Office of the Attorney General ruled in our favor on a similar public information request submitted by our organization several years ago. The policies and endorsements within your possession should be properly produced to the public under Chapter 552. They are open records.”
Chapter 552 encourages official to lean towards liberality in granting information requests because “it is the policy of this state that each person is entitled, unless otherwise expressly provided by law, at all times to complete information about the affairs of government and the official acts of public officials and employees. The people, in delegating authority, do not give their public servants the right to decide what is good for the people to know and what is not good for them to know. The people insist on remaining informed so that they may retain control over the instruments they have created.”
Regarding insurance policies, Subchapter A of the Insurance Code Chapter 2301 deems auto insurance policy forms to be public information: “Each filing made, and any supporting information filed, under this subchapter is open to public inspection as of the date of the filing.”
Although Texas Watch was established over 20 years ago, the organization got involved with the topic of quality collision repairs after the Seebachan lawsuit of 2017, and the group also worked extensively with the Houston Auto Body Association (HABA) and the Auto Body Association of Texas (ABAT) earlier this year in support of House Bill 1348, which intended to require proper compensation for OEM repair procedures by insurers.
Prevailing rate isn’t the only topic related to the collision repair industry that Texas Watch is currently monitoring and attempting to address. Wendell shared, “We just launched a petition to make it easy for folks to tell federal officials to preserve the 1963 consent decree that keeps auto insurers from gaming the collision repair process. The Department of Justice has proposed repealing it. That would be a disaster for consumers and a giveaway for the auto insurance industry.”
Wendell added, “You can send your letter by visiting texaswatch.org/form/autobodysafety. It only takes a minute. Be sure to tell your friends and family to take action as well. Insurance companies don’t need even more power over our lives. In addition, we’ll be taking up the fight again next legislative session for a bill that ensures quality parts are used to make quality repairs by a quality shop of your choice.”