Texas Insurance Commissioner Jose Montemayor has issued a rule to prohibit Texas home insurers from denying coverage to homeowners based on prior mold or water-damage claims.
Montemayor told lawmakers during an Aug. 5, 2002, hearing before the Texas state Senate Committee on Business and Commerce that the rule is necessary because Texas insurers are declining to issue home insurance policies (or charging policyholders higher premiums) based on previous mold and/or water-damage claims
| Denial or rating
of insurance based on prior water-damage claims is based on the unsubstantiated assumption that the previous damage was not properly repaired.
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According to the Texas Department of Insurance (TDI), "the denial or rating of insurance based on a prior water-damage claim is based on the unsubstantiated assumption that a previous water-damage claim resulted in improper repair of the damaged property."
Montemayor's rule would prevent insurers from charging more or denying coverage due to past mold or water-damage claims unless an actual inspection of the property showed that the prior damage had not been properly repaired.
The TDI has previously prohibited insurers from rating home policies or denying coverage based on a home's age and value because this practice broadly denies coverage to an entire class of homes instead of forcing the insurer to evaluate each home on its own merits and actual condition.
A public hearing to comment on the proposed adoption of the new rule is scheduled for Oct. 22, 2002, at the State Office Building in Austin. Insurance companies have 30 days to contest the rule, which would carry a $100,000 fine. |
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