In response to a sharp rise in homeowners insurance rates, Governor Greg Abbott issued a directive on August 24 ordering the Texas Department of Insurance (TDI) to act swiftly to protect consumers. Abbott noted that the average annual homeowners premium in Texas has risen 79 percent over the past six years, a burden that “hits Texas families hard.” The governor’s order asks TDI to employ existing authority, explore administrative changes, and recommend legislative measures that could lower costs for policyholders.
Targeted actions on rates and underwriting
TDI plans to issue a bulletin directing insurers to consider the lower risk associated with homes that have FORTIFIED roofs when setting rates. The agency will also propose a rule clarifying that insurers may not refuse to write or renew residential property coverage based solely on the age of a roof or other individual components, as state law already prohibits using the age of the property for that purpose.
Cracking down on price optimization
The department identified “price optimization”—adjusting insurance prices to influence sales or retain customers rather than basing them on risk or expenses—as a practice that already violates Texas law for regulated products. TDI will reinforce the prohibition and ensure insurers price policies on legitimate risk factors.
New insurance fraud task force
To address fraud‑related losses that drive up premiums, TDI will create an Insurance Fraud Task Force. The task force will bring together law‑enforcement agencies, anti‑fraud organizations, consumers and other stakeholders to investigate and deter fraudulent claims.
Study of claim costs and AI use
The agency will conduct a study of factors influencing claim costs in the commercial auto, personal auto and homeowners markets. Using existing data, TDI will examine claims that were closed without payment and publish the findings in a concise web‑based format by the end of 2026.
Additionally, TDI will analyze how insurers use artificial intelligence in claims handling and underwriting. Current guidance requires human review for AI‑driven decisions that materially affect policyholders, and the department will assess compliance before the next legislative session.
Proposed legislative ideas
In its briefing, TDI outlined several potential bills for the upcoming session, including:
- A homeowner mitigation grant program to encourage roof fortification.
- Allowing auto insurers to consider moving violations when setting rates.
- Limiting advertising expenses that can be baked into insurance rates.
- Delaying the effective date of certain rate filings to give TDI more review time.
- Requiring advance notice of renewal premiums and more consistent claim‑deadline timelines.
- Mandating written claim decisions and creating a licensing system for roofing contractors.
Governor Abbott said he will work with lawmakers to advance these measures and other consumer‑protective steps during the next legislative session.
Improving consumer resources
TDI also plans to enhance plain‑language coverage tools, upgrade the HelpInsure.com portal, publish additional non‑confidential financial orders, and clarify language on insurance declarations pages. The agency may release market data earlier, collect more market information, and streamline certain company applications to reduce barriers for new insurers entering the Texas market.
All of these actions are aimed at putting Texas families first, lowering the cost of protecting their homes, and ensuring a fair, transparent insurance marketplace.
Original reporting: The Dallas Express — read the source article.
