The Texas Department of Insurance published a bulletin providing guidance following major flooding in Hill Country. Governor Greg Abbott issued a disaster declaration, which authorizes the use of state and local government resources to assist with the disaster.
The Department expects insurers and HMOs to treat consumers fairly as they recover from the floods. Insurers should inform insureds about potential FEMA recovery options and provide them with FEMA contact information and a link to https://www.disasterassistance.gov/. Insurers should also inform policyholders of other disaster assistance programs.
Insurers should suspend vacancy provisions for as long as necessary while insureds are displaced by the disaster and recovering. This is not applicable to insureds who permanently moved from their homes or businesses.
Insurers are also expected to provide grace periods for premium payment. This can include temporarily suspending payment plans or removing penalties and fees for late payments. TDI will work with insurers on how the suspension of payments will interact with financial review requirements.
Insurers are reminded that they can use emergency and nonresident adjusters to handle disaster-related claims. Public adjusters must still be licensed by TDI; violating the license requirement can constitute both civil and criminal penalties.
Insurers, adjusters, and contractors are reminded that they may not misrepresent the terms of a policy; an insurer must not participate in unfair claim settlement practices; and it is illegal for contractors or roofers to waive a deductible or promise a rebate for all or part of a deductible.
Insurers nonrenewing a residential, farm, or ranch owners policy due to three or more claims in any three-year period are prohibited from taking into consideration losses from natural causes, claims filed but not paid, or any claims history for remediated water damage.
Insurers also should not nonrenew a policy solely due to a customer inquiry, including things like a question about how to file a claim and whether a policy will cover a loss. An inquiry concerning damage that occurred that results in an investigation or claim would be an allowable reason.
Finally, insurers who plan to retrict writing new personal auto and residential property business after a disaster must file a proposed restriction plan with TDI and get approval.
The bulletin can be found here.