The Texas Department of Insurance (“TDI”) has issued a number of bulletins specific to Hurricane Harvey. These bulletins do no create new law, but provide TDI’s interpretation of the law, and lay out the expectations TDI has for carriers.
TDI issued Insurance Bulletin (B-0026-07) reminding carrier’s that they are not allowed to use Hurricane Harvey claims as an excuse to raise insurance rates, limit coverage, or cancel coverage.1 TDI describes re-rating, canceling, nonrenewing, or refusing to provide coverage in response to policyholder’s status as victim or evacuee of Hurricane Harvey as “inappropriate” and not “reasonable.”2
Further, this bulletin re-integrates TDI’s interpretation of Texas Insurance Code 551.107 which demands the same from carriers. Under Texas Insurance Code 551.107, when nonrenewing a standard fire, homeowners, farm or ranch owner’s policy due to a policyholder filing three or more claims under a policy in any three-year period, insurers may not consider:
- losses caused by natural causes, including weather-related claims (i.e., Hurricane Harvey claim)
- claims filed but not paid or payable; or
- appliance-related water damage claims where the repairs have been inspected and certified. (Note, an insurance company can count appliance-related claims if three or more such claims are filed and paid within a 3-year period.)
- Insurers may not consider a customer inquiry as a basis for nonrenewal under Insurance Code §551.113.
Insurance Companies practices related to nonrenewal are subject to restrictions against unfair discrimination under Chapter 544 of the Texas Insurance Code.3 Insurers that do not comply with statutory requirements are subject to enforcement action.4
1 TDI Commissioner’s Bulletin # B-0026-17.
3 Tex. Ins. Code Chapter 544, Subchapters A and B.