In a September 14 letter to the Texas Legislature, Insurance Commissioner Amanda Crawford recommended that the state consider adding a delay between the filing of new home and auto insurance rates and their implementation in the market. The proposal aims to give the Texas Department of Insurance (TDI) additional time to review rate changes and protect Texas families from sudden premium hikes.
Current “file‑and‑use” system
Texas operates under a “file‑and‑use” framework, which allows insurers to apply new rates as soon as they are filed, even before TDI has completed its review. State law requires that rates be “based on sound actuarial principles,” be “reasonably related” to expected costs, and not generate “unreasonably high long-term profit” for insurers. While TDI reviews every filing, it rarely vetoes rates.
Why a delay could help consumers
Crawford notes that under the present system, if TDI discovers an issue with a newly filed rate, policyholders have limited recourse because the rate may already be in effect. A built‑in waiting period would allow the agency to identify and address potential overcharges before they reach consumers, aligning with the department’s mission to put Texans first.
Recent actions and industry response
In 2024, TDI denied a 10% increase proposed by the Texas Windstorm Insurance Association, citing hardships for coastal residents. In 2025, the agency did not reject any of the more than 2,000 rate filings it received. The Insurance Council of Texas, representing property‑and‑casualty insurers, has historically supported the file‑and‑use system, arguing it lets insurers respond quickly to changing loss conditions.
Rich Johnson, spokesperson for the council, said the framework “allows insurers to respond to changing loss conditions” and urged lawmakers to weigh the impact of any delay on market responsiveness and competition.
Consumer‑advocacy perspective
Texas Watch, a citizen‑focused insurance watchdog, applauds the proposed pause. Executive Director Ware Wendell warned, “We’re paying more and more for less and less coverage. We need to make sure the Department of Insurance can stop overcharges before they start, before they are charged to the policyholder.” The group did not provide additional comment before the press deadline.
Broader legislative agenda
Crawford’s memorandum also outlined a dozen other measures to lower property and casualty costs, including:
- A grant program to help homeowners harden homes against severe weather.
- Prohibiting insurers from passing advertising costs onto policyholders.
- Requiring a 60‑day notice before a premium change takes effect.
- Standardizing claim‑deadline disclosures for homeowners.
- Mandating written acceptance, rejection, or denial of all claims.
- Creating public education courses on basic insurance concepts.
These proposals echo Governor Greg Abbott’s August 24 directive for the TDI to focus on affordability, including bans on age‑based policy denials and the use of personal data in pricing.
Impact on Texas families
Texans paid the nation’s fourth‑highest home insurance premiums at the end of 2025, with an average cost of $3,506—nearly double the $1,791 average in 2016. Governor Abbott highlighted a 79% rise in premiums over the past six years, emphasizing the need for consumer‑first action.
“High insurance costs hit Texas families hard,” Abbott said in a September 16 statement. “I directed TDI to put consumers first, and TDI is taking action to do so.”
Next steps
The proposal will be reviewed during the upcoming 2027 legislative session. Lawmakers will weigh the potential benefits of a review delay against concerns about market flexibility and competition. Stakeholders from insurers, consumer advocates, and the governor’s office are expected to testify as the debate unfolds.
Original reporting: Community Impact — Denton — read the source article.
