For Texas Homeowners, These Are Your Insurance Bill of Rights

Going through the Texas homeowner’s claims process sounds simple enough: You pay your monthly premiums on time so that when a storm hits and you need repairs, you can file your storm damage claim and have your insurance company provide funds for you to get your house fixed.

Unfortunately, we live in the real world and insurance companies are not always as cooperative in getting your homeowner’s claim paid. Insurance companies are some of the largest, most profitable businesses in the world, making up a trillion-dollar industry that meets its bottom line by denying and underpaying rightful storm claims.

Thankfully, just like our US Constitution has a bill of rights to protect our rights, Texas law has ensured that Texas homeowners have their own insurance “bill of rights” to protect them against irresponsible insurance companies.

Texas Homeowner’s Insurance Bill of Rights

The Texas Homeowner’s Insurance Bill of Rights is divided among key sections and their individual rights.

Getting Information From The Texas Department of Insurance and Your Insurance Company

THE RIGHT OF INFORMATION FROM THE TEXAS DEPARTMENT OF INSURANCE
1. Texas Department of Insurance is available as a free resource for every Texas homeowner.
2. Texas Department of Insurance can be reached at 1-800-252-3439 or visit www.tdi.texas.gov
THE RIGHT TO INFORMATION FROM YOUR INSURANCE COMPANY
1. Insurance companies must provide you with a way to contact them for questions or complaints.

What You Should Know Before You Buy Insurance

THE RIGHT TO TRUTHFUL STATEMENTS FROM YOUR INSURANCE COMPANY
1. Texas law prohibits insurance companies from making false, misleading, or deceptive statements regarding your insurance.
THE RIGHT TO HAVE INSURANCE ONLY FOR REPLACEMENT COST OF DWELLING TO SATISFY LENDERS
1. Texas law prohibits lenders from forcing homeowners to purchase insurance coverage that is beyond the amount of the replacement cost of the dwelling as a condition of financing a mortgage.
THE RIGHT TO NOT BE DENIED INSURANCE SOLELY ON YOUR CREDIT INFORMATION
1. Texas law prohibits insurance companies from denying you insurance solely on your credit score.
2. If your credit score is a factor, they must also consider other underwriting factors that are independent of your credit score.
THE RIGHT TO NOT BE DENIED INSURANCE BASED ON APPLIANCE-RELATED WATER DAMAGE CLAIMS
1. Texas law prohibits insurance companies from denying you insurance or raising your premiums due to a prior appliance-related water claim if (1) the damage has been repaired and (2) the repair or remediation was inspected and certified.
THE RIGHT TO NOT BE DENIED INSURANCE BASED ON WATER/MOLD DAMAGE CLAIMS
1. Texas law prohibits insurance companies from denying you insurance or raising your premiums due to a prior water/mold damage claim if (1) the damage has been repaired and (2) the repair or remediation was inspected and certified.
THE RIGHT TO INDEPENDENT PROPERTY INSPECTION PRIOR TO INSURANCE COVERAGE
1. Texas law states that once an inspector determines that your property meets certain minimum requirements and issues you an inspection certificate, no insurer may deny coverage based on property conditions without re-inspecting your property.
THE RIGHT TO BUY BASIC HOMEOWNERS INSURANCE FROM TEXAS FAIR ACCESS TO INSURANCE REQUIREMENTS PLAN IF YOU’VE BEEN DENIED BY TWO DIFFERENT INSURANCE COMPANIES
1. Texas law allows for this public option safety net for homeowners that have been denied insurance coverage by two different private insurance options.
2. Requirements must be met every two years.
THE RIGHT TO BUY WINDSTORM OR HAIL COVERAGE FROM TEXAS WINDSTORM INSURANCE ASSOCIATION (TWIA) IF YOU MEET CERTAIN REQUIREMENTS
1. Texas law states that if you (1) live in areas such as counties designated by the insurance commissioner, or near or on the coast and (2) have been denied hail and windstorm coverage by one insurance company, you may opt-in to purchasing a policy from TWIA.
2. Requirements must be met every three years.
THE RIGHT TO BE NOTIFIED OF PREMIUM INCREASES PRIOR TO AUTOMATIC WITHDRAWAL OF YOUR ACCOUNT
1. Texas law prohibits insurance carriers from increasing the amount automatically withdrawn from your financial institution unless (1) they notify you of a premium increase via US mail, 30 days prior to the effective date and (2) you do not notify the insurer that you object to the increase at least five days prior to the effective date.
THE RIGHT TO BE NOTIFIED WITH AN EXPLANATION OF REDUCED COVERAGE
1. Texas law states that if your insurance company reduces your coverage using an endorsement, they must give you a written explanation of the change made by the endorsement.
2. The explanation letter must be 30 days prior to the effective date of the new or renewal policy.
3. Texas law prohibits insurance companies from reducing coverage during the policy period unless you request the change; if so, the carrier has no duty to provide you with a notice.
THE RIGHT TO BE NOTIFIED OF PREMIUM INCREASE
1. Texas law requires that if your insurance carrier plans to increase your premium by 10% or more, they must notify you of the rate increase at least 30 days before your renewal date.
THE RIGHT TO AN EXPLANATION OF DENIAL
1. Texas law states that, upon request, you have a right to a written explanation as to why you were denied coverage. The written statement must fully explain the decision, including the precise incidents, circumstances, or risk factors that disqualified you.
THE RIGHT TO NOT BE DENIED COVERAGE OR PREMIUM DETERMINED BASED ON CUSTOMER INQUIRY
1. Texas law prohibits insurance carriers from using customer inquiries as a factor in determining coverage or premium rates.
2. Customer inquiries include questions regarding the insurance carrier’s claims process, questions about their policy, hypothetical questions about coverage for a loss unless that question is NOT hypothetical and is in regard to a specific loss that HAS actually occurred and results in an investigation of a claim.
THE RIGHT TO JUSTIFIED RATE DIFFERENTIAL WITHIN A COUNTY
1. Texas law states that if an insurance carrier charges different rates for certain areas within a county, the rate differential CANNOT exceed 15% unless the difference actuarially justified.
THE RIGHT TO PRIVACY
1. Texas law states that you have a right to refuse your insurance company, agent, or an adjuster from disclosing your personal financial information to companies that are not affiliated with your insurance company such as your social security number, your credit history, or premium payment history.
2. If you apply for a policy, the insurance company or financial institution must notify you if it intends to share financial information about you and give you at least 30 days to refuse.
3. If you buy a policy, the insurance company or financial institution must tell you what information it collects about you and whether it intends to share any of the information and must give you at least 30 days to opt-out.
4. These protections do not apply to information that (1) publicly available elsewhere or (2) insurance companies or financial institutions are required by law to disclose or (3) insurance companies or financial institutions must share in order to conduct ordinary business activities.

What You Should Know About Cancellation and Nonrenewal

TERMS TO KNOW

Cancellation means that before the end of the policy period the insurance company:

terminates the policy;
reduces or restricts coverage under the policy; or
refuses to provide additional coverage to which you are entitled under the policy.

Refusal to renew and nonrenewal means the policy terminates at the end of the policy period.

The policy period is shown on the declarations page at the front of your policy.

THE RIGHT TO LIMITATION ON CANCELLATION FOR HOMEOWNERS AND RENTERS POLICIES
1. If your policy has been in effect for 60 days or more, insurance carriers cannot cancel your policy unless (1) you don’t pay your premium when due or (2) you file a fraudulent claim or (3) there is an increase in the hazard covered by the policy that is within your control and results in an increase in the premium rate of your policy or (4) TDI determines continuation of the policy would result in violation of insurance laws.
2. If your policy has been in effect for 60 days or less, insurance carriers cannot cancel your policy unless (1) one of the reasons listed above applies or (2) the insurance company identifies a condition that creates an increase in hazard, and/or was not disclosed on your application, and is not the subject of a prior claim or (3) the insurance company rejects a required inspection report within 10 days after receiving the report.
THE RIGHT TO LIMITATION ON CANCELLATION FOR DWELLING POLICIES
1. If your policy has been in effect for 90 days or more, insurance carriers cannot cancel your policy unless (1) you don’t pay your premium when due or (2) you file a fraudulent claim or (3) there is an increase in the hazard covered by the policy that is within your control and results in an increase in the premium rate of your policy or (4) TDI determines continuation of the policy would result in violation of insurance laws.
THE RIGHT TO A NOTICE OF CANCELLATION
1. Texas law states that your insurance company must provide a notice of cancellation via mail 10 days prior to the effective date of the cancellation.
THE RIGHT TO CANCEL YOUR POLICY
1. Texas law allows policyholders to cancel their policy at any time and receive a refund of the remaining premium.
THE RIGHT TO CONTINUE COVERAGE OR A NEW POLICY IF CHANGE OF MARITAL STATUS OCCURS
1. Texas law allows policyholders to continue their coverage or to a new policy in your name with coverages that most nearly approximates the coverage of your previous policy, including expiration date.
2. Insurance carriers are prohibited from dating the policy in a manner that would reflect a gap in coverage.
THE RIGHT TO LIMITED USE OF CLAIMS HISTORY TO NONRENEW OR DETERMINE RENEWAL PREMIUM
1. Your insurance company cannot use claims you filed as a basis to non-renew your policy unless: (1) you file three or more claims in any 3 year period: and (2) your insurer notified you in writing alter the second claim that filing a third claim could result in nonrenewal of your policy.
2. Your insurance company cannot use the following types of claims to determine the number of claims you have filed or to determine your premium if your policy is renewed: (1) claims for damage from natural causes, including weather-related damage or (2) appliance-related water damage claims where the repairs have been inspected and
  certified or (3) claims filed but not paid or payable under the policy.
THE RIGHT TO NOT BE DENIED FOR RENEWAL SOLELY ON YOUR CREDIT INFORMATION
1. Texas law prohibits insurance companies from refusing to renew your insurance policy solely on your credit score.
2. If your credit score is a factor, they must also consider other underwriting factors that are independent of your credit score.
THE RIGHT TO BE NOTIFIED OF CHANGES IN POLICY DURING RENEWAL
1. Texas law states that your insurance carrier, in writing, must explain any difference between your current policy and any policies offered when the policy renews.
THE RIGHT TO BE NOTIFIED OF NONRENEWAL
1. Texas law states that if you do not receive a notice of nonrenewal at least 30 days before your policy expires, you have the right to require your insurance carrier to renew your policy.
THE RIGHT TO AN EXPLANATION OF CANCELLATION OR NONRENEWAL
1. Texas law states that, upon request, you have a right to a written explanation as to why your insurance carrier decided to cancel or not renewal your policy. The written statement must fully explain the decision, including the precise incidents, circumstances, or risk factors that disqualified you.

What You Should Know When You File A Claim

THE RIGHT TO BE TREATED FAIRLY AND HONESTLY
1. If you believe that your insurance company treated your claim unfairly or unjustly, you can call an insurance bad faith lawyer as well as the Texas Department of Insurance at 1-800-252 3439.
THE RIGHT TO REJECT YOUR SETTLEMENT OFFER AND HIRE AN INSURANCE CLAIM LAWYER
1. Texas law allows you to reject any settlement amount including any unfair valuation offered by the insurance company.
2. If you reject your settlement offer, you have the right to seek legal counsel and hire an insurance claim lawyer and file a lawsuit on your behalf.
THE RIGHT TO AN EXPLANATION OF CLAIM DENIAL
1. Texas law requires your insurance carrier to tell you in writing why your claim or part of your claim was denied.
THE RIGHT TO PROMPT PROCESS AND PAYMENT OF CLAIM
1. Within 15 calendar days, your insurance company must acknowledge receipt of your claim and request any additional information reasonably related to your claim.
2. Within 15 business days (30 days if the company reasonably suspects arson) after receipt of all requested information, the company must appro e or deny your claim in writing. Texas law allows the insurance company to extend this deadline up to 45 days if it notifies you that more time is needed and tells you why.
3. After notifying you that your claim is approved. your insurance company must pay the claim within five business days.
4. If the insurance company fails to meet required claims processing and payment deadlines, you have the right to hire an insurance claims attorney and to collect 18% annual interest and attorneys fees in addition to our claim amount.
THE RIGHT TO PROMPT RELEASE OF FUNDS BY LENDER
1. Texas law states that if a claim check is sent to your lender or mortgage company, they must notify you within 10 days of receipt of the check and tell you what you must do to get the funds released to you.
2. Once you request the funds from the lender, within 10 days the lender must (1) release the money to you or (2) tell you in specific detail what you must do to get the money released.
3. If the lender does not provide the notices mentioned above or does not pay the money to you after all the requirements have been met, the lender must pay you interest on the money at 10% per year from the time of the payment or when the notices were due.
THE RIGHT TO BE NOTIFIED OF LIABILITY CLAIM SETTLEMENT
1. Your insurance company must notify you if it intends to pay a liability claim against our policy. The company must
  notify you in writing of an initial offer to compromise or settle a claim against you no later than the 10th day after the date the offer is made.
2. The company must notify you in writing of any settlement of a claim against you no later than the 30th day after the date of the settlement.
THE RIGHT TO REFUSE INFORMATION NOT REQUIRED FOR YOUR CLAIM
1. Texas law allows you to withhold any information from your insurance carrier that does not relate to your claim unless required by a court order.

What You Need To Know About Prohibited Discrimination

THE RIGHT TO NOT BE DISCRIMINATED AGAINST BASED ON A PROTECTED CLASS
1. Texas law forbids insurance carriers from refusing to insure you, limit the amount, extent or kind of coverage, refusing to renew your policy or charge you a different rate for the same policy based on your race, religion, gender, marital status, disability or partial disability, or national origin.
2. Some exceptions may apply however it must be justified by actual or anticipated loss experience because of age or geographic location.
THE RIGHT TO NOT BE DENIED COVERAGE DUE TO THE AGE OF YOUR HOUSE
1. Texas law, however, allows insurance carriers to deny coverage based on the condition of the house, including plumbing, heating, air conditioning, wiring, and roof.
THE RIGHT TO NOT BE DENIED COVERAGE DUE TO VALUE OF THE PROPERTY
THE RIGHT TO FAIR AND NONDISCRIMINATORY UNDERWRITING GUIDELINES
THE RIGHT TO EQUAL TREATMENT
1. Texas law forbids insurance companies from treating you differently from other individuals in the same class and essentially the same hazard.
2. If you sustain economic damages as a result of unfair discrimination, you have the right to hire an experienced attorney to file a lawsuit on your behalf.
3. If a court finds that an insurance carrier violated this right, you may be entitled to $25,000 along with economic damages, court costs, and attorneys fees.
4. The statute of limitations on these types of claims is two years from the date of the incident.

What You Should Know About Insurance Companies’ Use Of Credit Information

THE RIGHT TO HAVE DISCLOSED IF YOUR CREDIT INFORMATION WILL BE USED FOR UNDERWRITING OR RATING DECISIONS
1. Texas law requires insurance companies that use your credit information for underwriting and/or rating decisions to provide a disclosure statement within 10 days after you’ve submitted your completed application for insurance.

What You Should Know About Enforcing Your Rights

THE RIGHT TO FILE A COMPLAINT WITH THE TEXAS DEPARTMENT OF INSURANCE
1. Texas law allows policyholders to file complaints against their insurance carrier to the Texas Department of Insurance for prompt investigation and response to your complaint at 1-800-252-3439.
THE RIGHT TO HIRE AN INSURANCE CLAIMS LAWYER AND TO FILE A LAWSUIT AGAINST YOUR INSURANCE CARRIER
1. Texas law allows policyholders to seek an experienced insurance claim lawyer if they are unable to resolve claim issues with their insurance carrier.
THE RIGHT TO BE FREE FROM BURDEN OF PROOF
1. Texas law states that If you hire an insurance claim lawyer and sue to recover under your insurance policy, the insurance company has the burden of proof as to any application of an exclusion in the policy and any exception to or other avoidance of coverage claimed by the insurer.
THE RIGHT TO REQUEST NEW RULES
1. Texas law allows for residents to request, in writing, that the Texas Department of Insurance make or change any existing rules that concern you.

It’s important to remember that the TDI bill of rights does not address your specific responsibilities as a policyholder and that there may be some exceptions to these rights, depending on the circumstances.

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