Consumer Protections

Texas law provides a broad array of specific protection for consumers:

Claims Handling – Chapter 542, Insurance Code, establishes policies and procedures for adjusting claims, including provisions for notice, gathering and exchange of information, and timelines for acceptance, rejection, and payment.

Rating Territories – Chapter 2253, Insurance Code, limits territorial rate variations in a county to 15 percent, unless authorized by the commissioner. Because the commissioner also has general rate regulation authority, this statute represents specific  dual regulation of variations in territorial rating.

Policy Forms – Chapter 2301, Insurance Code, requires all policy forms to be approved by the commissioner prior to use. Insurers may not use any form they want, but only those vetted and approved by the department.

Use of Credit Information – Chapter 559, Insurance Code, provides clear guidelines and limitations for the use of credit information by insurers. These consumer protections, put in place in 2003, were based on model legislation from the National Conference of Insurance Legislators. Learn more.

Mold Coverage – Mold is covered by insurers at various levels when the presence of mold is related to a covered loss. In fact, comprehensive mold coverage can be purchased by consumers. The mold crisis during the first part of the decade involved an erroneous trial court interpretation that the standard homeowners policy granted broad coverage for the presence of mold – even though premiums had not included such coverage. That lower court interpretation has since been overturned by the appellate courts. Texans now may purchase varying levels of mold coverage. The market, however, is no longer subject to the uncertainty, misinformation, and opportunism of the early 2000’s that drove it into crisis.

Link to Texas Insurance Code.