Rep. Chris Turner Files Consumer Protection Bills

Turner’s Legislation Targets Unfair Insurance Company Practices in Texas

Six years since a crisis in homeowners insurance compelled legislators to make sweeping reforms, many Texans have less coverage but still pay some of the highest premiums in the country.”

— Dallas Morning News, 2/15/2009

Austin –  This week, State Rep. Chris Turner filed three bills — House Bills 1528, 2784 and 2785 — to protect Texas consumers from unfair practices by insurance companies in Texas.

According to a nationwide survey recently released by the National Association of Insurance Commissioners (http://www.naic.org/), Texans pay the highest insurance rates in the nation. In fact, they pay roughly 1.75 times the national average for their homeowners insurance. Although Texans are paying high premiums, they are not always receiving the coverage that they need.

“Studies have shown that Texas homeowners pay more and get less when it comes to insurance policies,” said Turner. “It’s time we put Texas families first for a change and stop unfair homeowner insurance practices.”

House Bill 1528: Currently, insurance companies are under no obligation to pay a customer the replacement value of an item that has been lost or destroyed. Often times they pay only the “actual value” of the lost item, which may have depreciated over time. When passed, this legislation will require insurance companies to pay their customers the amount it would cost to replace an item.

House Bill 2784: Texas has a history of insurance companies making threats to leave the state or move from certain areas of the state, only to “return” once their demands have been met.  This bill would forbid an insurer who leaves the state from writing automobile or residential insurance policies for a five year period. “If insurance companies want to threaten to pull out of Texas as a negotiating tactic, then this bill says we are ready to call their bluff,” Turner said.

House Bill 2785: This bill prohibits customer inquiries regarding coverage to be used as a factor when determining insurance policy rates. Currently, when inquires are made regarding insurance coverage, i.e. asking if a broken window would be covered, it could affect the risk assessment on a home and ultimately the rate a customer must pay, even though no claim was made. House Bill 2785 would end this unfair practice.

“With the Texas Department of Insurance up for Sunset review this year, it’s time that the Legislature put an end to unfair insurance practices,” continued Turner. “We need to send insurance companies a strong message that if you want to do business in Texas, you have an obligation to treat Texas consumers fairly.”

The text of the bills may be found here: http://www.legis.state.tx.us/billlookup/billnumber.aspx