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Important Legislative Rules affect Homeowners Deductibles in claims


This article was updated on December 18, 2019

In addition to changes that affect only TWIA, several laws passed during the 86th Legislative Session authorize changes to the insurance industry as a whole. Below, we have outlined changes that also apply to the Texas Windstorm Insurance Association and the Texas FAIR Plan Association, effective September 1, 2019.

Updates to the Texas Insurance Code: 

  • Adjuster changes - A contractor may not act as a public adjuster for any property for which they are already providing or may provide contracting services. In addition, adjusters must not use a different name than the one on their adjuster license.
  • Deductibles
    • Payment requirements – Code was amended to explicitly require property insurance claimants to pay deductibles required under the terms of their policy.
    • Consumer education – The Texas Department of Insurance, in coordination with applicable state agencies and stakeholders, must develop and implement a consumer education program about property insurance deductibles which include information on prohibited conduct.
    • Proof of payment - An insurer may require proof of payment by a policyholder of any deductible applicable to their claim on a policy with replacement cost coverage before releasing withheld recoverable depreciation or a replacement cost holdback.
    • Update to the Business & Commerce Code - Code now stipulates contract language requirements related to deductible payments for claims of $1000 or more and outlines the offenses related to the payment of deductibles by a person other than a policyholder.

Should you wish to review the bills at the heart of these changes, the following links take you to a PDF of House Bill 2659House Bill 2103, and House Bill 2102.

To help us communicate the many changes happening at TWIA, we launched a webpage dedicated to recent legislation. Be sure to check it out!

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