FOR IMMEDIATE RELEASE
March 11, 2009
CONTACT: Doris Sanchez, Press Secretary
Phone: (512) 463-0385
HOMEOWNERS' INSURANCE REFORM
SENATOR LUCIO JOINS FELLOW LEGISLATORS IN PROPOSING HOMEOWNERS INSURANCE REFORM
AUSTIN — Today Sen. Eddie Lucio Jr. joined other lawmakers at a press conference in the Texas Capitol calling for comprehensive homeowners insurance reforms for the 81st Legislature.
"With an already tough economy, Texans shouldn't also be forced to pay the highest rates for homeowners insurance in the country," said Sen. Lucio. "This out-of-control system is devastating the pocketbooks of many who are already struggling to pay the bills. Reform is critical for this state."
One of his reform measures, Senate Bill 1372, would impose a five-year ban on re-entry into the state's market for homeowners and automobile insurers that pull out. While some insurers bully the Texas Department of Insurance (TDI) Commissioner into accepting their sky-high rates with threats of withdrawing from the state, others leave for a month only to return and continue charging excessive rates.
"This bill," explained the Senator, "will force insurers to stop playing games with homeowners and prevent them from strong-arming the TDI Commissioner into approving rates that he otherwise would not."
Another of the Senator's proposals, SB 102, would require insurers to offer standard forms on homeowner policies. The Senator noted, "One of a consumer's best tools is information. Senate Bill 102 standardizes policy forms to make it easier for consumers to shop the market and find the most affordable homeowners' insurance. Comparison shopping is an essential part of being a smart buyer."
The legislators also proposed bills that require insurance companies to justify rate hikes by first obtaining approval from the state insurance commissioner before passing them on to the consumers. Since no approval is currently required before rate increases are implemented, companies can raise rates before notifying the state.
Sen. Lucio's SB 103 would limit the range of rates an insurance company can charge within a given county. "The fact is, we need to hold insurers accountable. It's not good policy to let insurers charge households whatever they want without justification," he noted.
"No one should pay more for homeowners insurance than their neighbor a block away," he added. "My bill imposes a 15 percent limit on the amount insurers can vary rates within a county unless there's a proven, weather-related reason for exceeding that cap."
Other reform bills would ban the use of credit scores by insurers when setting rates and make the insurance commissioner an elected position.
A poll of likely voters released last month by Texas Watch, a leading consumer group active on insurance issues, showed strong support for insurance reform and a deep dissatisfaction with the state of the current insurance market.