The Texas Department of Insurance has championed the rights of Texans by saying an emphatic, “No!” to policies with binding arbitration clauses. These clauses essentially rob policyholders of their constitutional rights to legal action if the insurers act in bad faith. However, adding insult to injury: arbitration clause in Texas home insurance?
The Texas Department of Insurance has championed the rights of Texans by saying an emphatic, “No!” to policies with binding arbitration clauses. These clauses essentially rob policyholders of their constitutional rights to legal action if the insurer’s act in bad faith. However, adding insult to injury: arbitration clause in Texas home insurance policies now?
A nasty policy with an even nastier arbitration clause has found its way onto the TDI’s desk. If this policy is approved, policyholders may get a few dollars a month break on their premiums, but would be handing the insurers the right to act in bad faith with little to no recourse for those homeowners getting the runaround.
If you’re a Texan, you do NOT want this new policy approved! Arbitration was once lauded as a great alternative to the often-backlogged legal system. Nowadays though, corporations have just found ways of using is to avoid public accountability and, in some instances, any accountability.
This link takes you to a petition form that lets you tell the TDI that you do not want this new policy approved.
I signed it and received the following answer from Mr. David C. Mattax, Commissioner of Insurance:
“Thank you for your letter regarding binding arbitration clauses in insurance policies.
The Texas Department of Insurance is a regulatory agency which reviews various activities of insurance companies, including complaints and inquiries such as yours, to determine if a company has violated any provision of the Texas Insurance Code or the Texas Administrative Code.
Within the scope of its regulatory authority, TDI carefully considers insurance policy provisions that are filed for use in Texas, including arbitration requirements. Insurance Code Section 2301.007 allows the commissioner to disapprove certain policy forms that violate laws or rules or that contain a provision that is unjust or deceptive, encourages misrepresentation, or violates public policy.
TDI continues to have conversations with carriers regarding their proposed use of arbitration clauses in insurance policies.
We appreciate you taking the time to provide the department with your concerns.”
Given what’s been happening with arbitration clauses in other areas of business being used as clubs to knock down consumers’ rights, I urge you to sign the petition to prevent this kind of corporate bullying from making its way into Texas’ insurance business. Mother Nature has not been kind to the Lone Star State this season; let’s not allow the insurance business to add insult to injury!
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