Two bills have been introduced to the Texas legislature, one each in the House and Senate, that could bring significant changes to the manner in which shops perform repairs on insured vehicles. HB 3476 and SB 1083 would both require that technicians performing repairs on newer vehicles use Original Equipment Manufacturer (OEM) parts and procedures, though customers would be permitted to sign a waiver opting out of the use of OEM parts.
Introduced by Rep. Jeff Leach, HB 3476, and SB 1083, introduced by Sens. Phillip King and David Middleton, include similar language. Both pieces of legislation would set certain requirements for repairs on vehicles owned by the insured for 36 months or less, given that the vehicle was “new” upon delivery to the insured or vehicle owner.
According to the House bill, “the insurer 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 …”
However, for both bills, that requirement only pertains to repairs to vehicles meeting that 36-month threshold. The companion legislation in the Senate reads the same. While OEM parts and procedures would be required for those newer vehicles, the bills outline that insurance companies could not limit insureds from selecting repair facilities.
The bills would also give consumers the option to opt out of the use of OEM parts and procedures.
“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,” read the House and Senate bills.
According to the bills, that written disclosure would have to be signed before repairs begin while including specific language.
The bills also set requirements for older vehicles or those beyond the 36-month threshold. In that case, insurance companies may not specify “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.”
As with newer vehicles addressed in the legislation, insurance companies could not direct insureds to particular shops for repairs. The two bills are at varying stages in the legislature. HB 3476 was filed on March 3, 2023, and sits in the Insurance Committee, while SB 1083 was filed at the end of February 2023. The Senate bill was reported out of the Senate Committee on Business & Commerce on April 5.
