Texas laws protect homeowners insurance policy holders.
Homeowners insurance is an important protection to have when owning a home, as it can protect owners from a major financial loss in the event of a natural disaster, fire or other damaging event. Because so many homeowners need this kind of coverage, Texas has certain laws in place to protect the rights of policy holders.
Mandatory Coverage
In Texas, homeowners insurance is not generally required by law. However, the Texas Department of Insurance encourages homeowners to purchase adequate coverage to protect against financial disaster, and most mortgage lenders require it. Additionally, certain residents living along the Gulf Coast of Texas may be required by law to purchase flood insurance. If a homeowner lives along the flood zones identified by the National Flood Insurance Program as V, VE, or V1-V30 and has "constructed, altered, remodeled, or enlarged [her property] on or after September 1, 2009," then she is required to get flood insurance in Texas.
Coverage
If a homeowner does purchase insurance in Texas, only the structure of the house must be covered under state law. However, there are many policies in the state that offer additional kinds of coverage, protecting against loss of property, offering medical payments, and providing for a temporary home while a house is repaired. Standard insurance policies typically do not cover certain kinds of damage, as in the case of earthquakes, termites or regular wear and tear. Those who need coverage for this kind of damage often must purchase additional insurance in Texas.
Insurance Rates
Texas law requires homeowners insurance companies to offer policies that are "reasonable, adequate, not excessive to the risks for which they apply, and not unfairly discriminatory." Thus, insurance rates must not be found to be unfairly expensive. The Texas Department of Insurance (TDI) closely monitors insurance company rates, and if the TDI finds them to be excessive, then insurance companies must refund overcharged policy holders. Also, insurance companies may only change individual premium costs when a policy-holder renews his insurance. Insurance companies have the right to appeal TDI decisions.
Acceptable Factors
There are acceptable factors for which a homeowners insurance company in Texas may increase premiums or cancel policies. These factors include the age/condition of the home, its location, its replacement costs, the building materials used, its proximity to fire departments, and the policy holder's insurance record and credit rating. Insurance companies in Texas may not refuse coverage, increase premiums, or cancel policies due to "race, color, religion, or national origin" or because of "age, gender, marital status, geographic location, [and/or] disability."
Filing Claims
The TDI requires insurance companies to deal with filed insurance claims within 15 days after a written notice is received. If the company needs more information from a claimant, then it may request this. Once the insurance company receives this information, it has 15 more days to either accept or reject a claim. Payments must be made within five days of an accepted claim, and rejections must be accompanied with a letter explaining why.
Complaints
If a policy holder feels that she has been discriminated against, that the claim is not being handled in a timely fashion, or that her claim has been rejected unfairly, she should first try to contact the company and resolve the issue, according to the Texas Department of Insurance. Every homeowners insurance company in Texas is required by law to have a toll-free telephone hot line for customer assistance. If the issue still cannot be resolved, she should contact the TDI.
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