Texas Watch—Consumer Protection. Corporate Accountability. Citizen Advocacy.

TDI says it’ll start reviewing health insurance rate hikes deemed “unreasonable.”  Last year, lawmakers gave the insurance commissioner time to review windstorm insurance rate hikes.  Yet, homeowners insurance companies can hike rates without any justification.  Shouldn’t we at least be consistent?

Over the weekend, the Austin American-Statesman reported that the Texas Department of Insurance would start reviewing health insurance rate increases that are deemed “unreasonable.”  This stems from the new federal health care law which says rates can’t be too high.  How “unreasonable” is defined has yet to be determined by the feds, but in the past, TDI has only reviewed health insurance price hikes of 50% or more.  I think we can all agree that is unreasonable.

This comes on the heels of the legislature’s decision to give the insurance commissioner time to review rate increases by the Texas Windstorm Insurance Association (TWIA) – that is the quasi-public insurance pool that provides most coastal homeowners insurance for hurricane damage – before they go into effect.  Under the law passed last year, the commissioner has to act within 30 days of a TWIA rate hike of up to 5% or 60 days for anything higher.

While both of these moves leave consumers vulnerable to abusive behavior by the insurance industry, they are good steps in the right direction.

At the same time that Texas is making improvements (albeit meager) in the oversight of health insurance companies and the windstorm insurance pool, homeowners are left with rising premiums and dwindling coverage.  Yet, there continues to be resistance from some lawmakers and so-called free market “think tanks” to the notion that all insurance companies should have to justify their rates before – not after – they jack up their prices on Texas customers.

The least that the legislature could do is be consistent.  All insurance companies – regardless of type of coverage – should have to justify their prices.  Period.

Texans pay among the highest homeowners insurance premiums in the nation – 76% higher than the national average.  During a period of rising premiums, we have seen the coverage in most policies dramatically reduced.  So, we are paying more and getting less.  And still some lawmakers are resistant to the idea that insurance companies should have to justify their rates.