Texas Advances Legislation Against Forced Bundling in Home Insurance
Home insurance shoppers in Texas are advised to actively compare policies beyond just premiums, emphasizing coverage scope and deductible nuances, such as differences in out-of-pocket costs for specific perils like wind or hail. Consumers should understand terms like 'actual cash value' versus 'replacement cost value' when evaluating payout potentials, as the former does not account for depreciation. The Texas Department of Insurance provides an online comparison tool that considers factors including property location, claims history, and estimated rebuild costs, enhancing consumers' ability to find competitive rates.
Flood insurance remains a separate policy under FEMA's National Flood Insurance Program and may be required by lenders depending on the property's location. Discounts may be available based on affiliations such as military service, employers, or alumni groups, and bundling home and auto insurance can offer savings but requires consumer comparison to confirm benefits.
Recent legislative developments in Texas address the practice of "forced bundling," where insurers mandate purchasing home and auto policies together. Senate Bill 213, introduced by State Senator Royce West, seeks to prohibit such requirements, aiming to preserve consumer choice in the insurance marketplace. This bill responds to consumer reports of insurers conditioning home policy renewals on auto policy purchases, which some found less economical despite perceived discounts.
Industry representatives, including the Insurance Council of Texas, indicate that mandatory bundling is not widespread and would comply with any new regulations. The Texas Department of Insurance has also proposed rules to ban "tying arrangements" while still permitting insurers to offer bundling as an optional benefit.
Consumers switching policies should cancel old coverage promptly and notify mortgage lenders to avoid lapses. Monitoring these regulatory shifts and utilizing available comparison tools position consumers for more informed decisions amid ongoing market changes in Texas home insurance.