Homeowners Insurance

Homeowners Insurance
Illustration By Jason Stout

The much-publicized package of bills authored by Republican senators Troy Fraser (who helped broker the Farmers deal) and Mike Jackson (SB 14 and SB 125-131) foretell the likely range of outcomes of the homeowners insurance debacle. There will be some re-regulation of homeowners' policies (most having escaped altogether in recent years via the "Lloyds" loopholes) but no significant rollback of rates; restrictions on "credit scoring"; restrictions on how quickly a company can dump a policyholder for making a water-damage claim; regulation of mold assessment and remediation; and most likely, a "file and use" rate system.

This last "reform" is in fact a step backward from the essentially collapsed benchmark system (companies simply evaded it by writing unregulated policies). A company would "file" its announced rates and supporting documentation with the Texas Dept. of Insurance, which would have a limited period to demonstrate "discriminatory" or "capricious" pricing. In theory, the weaker system is the price of dragging the companies back under regulation; but without serious enforcement, the reforms will be essentially meaningless. Fort Worth Democratic Rep. Lon Burnam is carrying a quixotic group of more substantive reforms -- probably his best hope is to tighten some of the GOP-sponsored bills in committee.

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