Bills Filed to Protect Texas Families, Homeowners
Texas Watch—March 9th, 2007
As the deadline to file legislation comes to a close, it is clear that many lawmakers recognize the need to strengthen protections for Texas families, patients, homeowners, drivers, and small business owners. After several years of dominance by the insurance industry and their special interest lobbyists, lawmakers have filed a number of bills this session that if passed will improve the marketplace for everyday Texans.
“For too long, Texas families have been punished by the special interest lobbyists who have dominated the debate in Austin,” said Alex Winslow, Executive Director of Texas Watch, a statewide consumer advocacy and research organization. “This session, a number of lawmakers have stepped forward to provide common sense reforms that will improve the marketplace for working Texans.”
“There is a long way to go for these bills to become law, but Texas families have good reason to hope,” added Winslow. “These bills are designed to strengthen protections for Texans by beefing up accountability of the insurance industry, shoddy homebuilders, dangerous doctors, and other wrongdoers.”
CURBING BINDING ARBITRATION
The use of binding arbitration has become pervasive, raising a number of concerns about the fairness, cost, and lack of openness in such matters. As Chief Justice Wallace Jefferson said in his State of the Judiciary address, “When citizens flee our judicial system…we lose the public component of justice.”[1]
While state legislatures are severely restricted in what they can do to address the arbitration problem, there are a number of ways to limit its impact and curtail its use. Lawmakers have filed comprehensive legislation to forbid any contract from waiving certain individual legal rights, stop insurance companies from forcing policyholders into arbitration, disclose the cost of arbitration to consumers, minimize the types of contracts that contain mandatory arbitration agreements, and disclose vital information about so-called “independent arbiters.” [2]
REAL INSURANCE REFORMS
Legislation has been filed to improve accountability by making the Texas Insurance Commissioner an elected position.[3] Currently, the insurance commissioner is accountable only to the governor and is subject to undue influence from the insurance industry. By electing the state’s chief insurance regulator, voters will have an opportunity to choose someone who will report directly to Texas homeowners, drivers, and small business owners.
Additionally, lawmakers have filed bills to mandate a biennial review of the homeowners insurance market, [4]stop insurers from overcharging, [5]give consumers greater access to information about their insurance policies, [6]provide lawmakers with the most up-to-date information about the insurance market, [7]ban the use of insurance credit scoring, [8]limit the unfair use of insurance rating territories, [9]ensure that drivers are able to have uninsured and underinsured motorist claims fully paid, [10]and require insurers to cover temporary living expenses during a catastrophe. [11]
Lawmakers are also seeking to eliminate the current penalty that blocks homeowners from using their insurance policy by barring insurers from imposing a surcharge on policyholders until after their second claim in a three year period. [12] Currently, insurance companies are permitted to up-charge homeowners after filing a single claim.
Finally, legislation to stop insurance companies from forcing their policyholders into binding arbitration has been filed. [13] This important bill would help preserve the legal rights of individuals whose insurance carrier engages in abusive claims handling.
CRACKING DOWN ON BAD HOMEBUILDERS
Several bills have been filed to improve the ability of homeowners to have construction defects repaired by their builder and hold bad builders accountable.[14] The bills beef up oversight of the homebuilding industry by giving the Texas Residential Construction Commission greater enforcement powers, give consumers greater flexibility by allowing them to hold builders accountable in a court of law, and strengthen requirements for builders to ensure they are responsible and competent.
IMPROVING PATIENT SAFETY
With the passage of so-called tort “reform” in 2003, many Texas patients have been unable to hold those who cause needless death or injury accountable in a court of law. ER patients face an especially steep hill in their efforts to hold a wrongdoer accountable because ER physicians were given special protections. Legislation has been filed this session to level the playing field so that all doctors face the same level of accountability.[15]
Additionally, lawmakers are seeking to require hospitals to report infection rates, [16]improve nurse-to-patient ratios, [17]and give nurses greater ability to serve as an advocate for their patients. [18]
[1]Chief Justice Wallace Jefferson, The State of the Judiciary in Texas, February 20, 2007.
[2]HB 3091 (Frost); HB 3265 (Eiland) deals with binding arbitration in insurance contracts
[3]HB 3323 (Homer)
[4]HB 2065 (Geren), HB 3175 (Vo)
[5]Id.
[6]HB 2065 (Geren), SB 611 (Lucio), HB 3312 (Martinez)
[7]Id.
[8]SB 533 (Ellis), HB 981 (Veasey), HB 1973 (Coleman)
[9]HB 1777 (Thompson), HB 1973 (Coleman)
[10]HB 2013 (Smithee)
[11]SB 519 (Ellis), HB 579 (Deshotel)
[12]SB 978 (Watson), HB 1913 (Eiland), HB 2065 (Geren)
[13]HB 3265 (Eiland)
[14]HB 295 (Farrar), HB 1686 (McClendon), HB 2008 (T. Smith)
[15]SB 468 (Ellis)
[16]HB 1398 (Delisi)
[17]HB 1707 (Coleman)
[18]Id.
