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Texas Senate Committee Urges End to Insurers Using Customer Inquiries to Raise Rates

Do you have a question about your homeowner insurance policy? Do NOT call your own insurance company to get an answer. If you do, you run the risk of having your insurance company raise your rates!

Crazy, right? But true, as pointed out in an article in the Dallas Morning News. Here are excerpts:

Some Texas insurers are penalizing customers who call asking questions about their coverage or potential claims, a Senate committee said, urging that the practice be stopped.

The Senate Business and Commerce Committee’s report calls for legislation prohibiting insurers from using customer inquiries to cancel policies or decline to renew them, or to increase premiums for those policyholders.

A survey conducted by the Texas Department of Insurance found that several companies use customer inquiries in ways that can affect rates or determine whether a homeowner policy should be renewed.

The report cites the case of a homeowner who asks an insurance agent about a leaking roof and then does not make repairs before the policy comes up for renewal, resulting in cancellation of the policy. Another example is a homeowner asking about the need for additional coverage after a remodeling project or addition to a house, triggering an automatic premium increase.

“Consumers should feel free to contact their insurance carriers with questions and concerns, while carriers have a responsibility to ensure that rates are not inflated by issues or losses that come to their attention,” the Senate committee said in the report. It did not identify companies that keep track of customer inquiries.

The proposed legislation was applauded by a leading consumer group, Texas Watch, which said homeowners should not be penalized simply for asking their agents legitimate questions about coverage.

The Business and Commerce Committee also called for the return to a standard homeowner policy in Texas so consumers can more easily compare companies when they are shopping for insurance.

Currently, companies offer policies that often differ greatly from those offered by competitors. Texas at one time had a standard homeowner policy — laying out specific coverage — which was the basis for most insurance policies sold in the state.

“Texans pay too much and get too little for their insurance,” said Alex Winslow of Texas Watch. “They are told to shop the market but don’t have the tools necessary to make informed choices.”

Bob Kraft

I am a Dallas, Texas lawyer who has had the privilege of helping thousands of clients since 1971 in the areas of Personal Injury law and Social Security Disability.

About This Blog

The title of this blog reflects my attitude toward those government agencies and insurance companies that routinely mistreat injured or disabled people. As a Dallas, Texas lawyer, I've spent more than 45 years trying to help those poor folk, and I have been frustrated daily by the actions of the people on the other side of their claims. (Sorry if I offended you...)

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