The insurance protection you now have on your home may be a thing of the past if one Texas lawmaker has his way.
Texas already pays some of the highest homeowner's insurance rates in the country. Now, you could be getting less coverage.
When Mother Nature strikes, insurance should give you peace of mind. A Dallas lawmaker claims his bill will help lower rates for homeowners but a consumer advocate says it will penalize homeowners.
When Tornadoes ripped through North Texas last year and hail storms pounded Dallas, homeowners did not have to worry about taking a hit on their insurance policy. Under current Texas law, damage due to natural causes or Mother Nature does not count against you if you file a claim on our homeowner's insurance. But that could change.
"A very small minority of policyholders are making claims on their policies that are causing the rates to for the rest of us to go up," said Texas State Representative Kenneth Sheets, a Republican representing District 107 which includes parts of Dallas, Garland and Mesquite.
Sheets says about 2% of the policyholders are abusing the insurance companies. He says some have filed 10 even 12 claims over a 15 year period. He's filed a bill, he says, to get rid of the bad apples.
It will allow insurance companies to refuse to renew a policy after 2 claims, instead of 3, in a 3 year period. Companies can charge more after one claim, instead of 2 and now claims involving natural causes will count against homeowners.
"Those in the past were not counted at all," said reporter Becky Oliver. "They were weather related. Now, they will be counted?"
"Right," said Sheets.
"This is a dangerous bill," said Alex Winslow of Texas Watch, a consumer advocacy group in Austin. His group fought a similar bill two years ago that did not pass.
"This whole legislation is designed to intimidate policyholders to not file claims," Winslow said. "Insurance companies want to take your money in premiums but they don't want to pay out in claims."
After Fox 4 contacted Sheets about his bill, he told us he amended it but to date, there have been no official changes to the bill on record. He says under the amended version, homeowners will be allowed up to 3 claims in 3 years but natural causes will be counted.
And if the insurance company determines a second loss was caused by a homeowner's failure to properly make repairs, the insurance company can refuse to renew a policy or impose a surcharge.
Sheets' office is located right in Lakewood, the center of the heaviest hail damage last year.
"Who wanted this bill, the insurance companies or your constituents?" Becky Oliver asked.
"This is a bill that's about good policy," Sheets said.
Insurance companies have been big backers of Sheets donating more than $70,000 to his campaign from 2010-2012.
That is more than anyone else who sits on the Texas House Insurance Committee.
"I had one of the most contested races in the state so there were a lot of people contributing to my race this go around," said Sheets.
Homeowners we talked to are not giving Sheets a thumbs up on this vote.
"I think this is pretty typical of the way government is run. There is a disconnect between the folks who make plans and help pass laws and the folks who work on a day to day basis," said a homeowner in Lakewood.
"They just want more, more, more and then what?" asked another homeowner. "When is it going to end?"
Sheets says by helping insurance companies his bill should help homeowners by lowering premiums but there is nothing in the legislation requiring insurance companies to pass along any savings.
"Aren't you talking about incredibly rare situation?" Oliver asked. "The average person is not filing 10 or 15 cases."
"This law will not apply to the regular person," Sheets said.
"This will apply to the regular person," Oliver said.
"No, this will be just for those with abuse of policies," Sheets said.
"How does that protect consumers when now natural causes will be part of the claims that are counted? How does that help consumers?" Oliver asked.
"Let's look at what other states are doing. We are one of the few states that had restrictions like this on our insurance code. We are not getting rid of the restrictions. We are just loosening those restrictions," Sheets added.
"We are paying more and getting less and so then, now we have legislation on the books being considered that will punish you for using the meager coverage that exists in your policy. This is the wrong way to go," said Alex Winslow.
Sheets' bill was filed back on February 4, 2013. He says he amended it but the official record does not reflect any change in the language which makes it difficult to analyze. Even Sheets was confused about some of the wording and what it will mean to homeowners.
Sheets is not concerned Dallas homeowners are abusing insurance companies. He says the main problem is around the coast, near Corpus Christi. When Fox questioned Sheets about why Dallas homeowners should pay for problems on the coast, he said there should be a trickle down affect if his bill passes and homeowners should see lower premiums.
KDFW FOX 4
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