Commissioner's Bulletins issued by the Texas Department of Insurance ("TDI") do not have statutory law, but they do express and explain TDI's interpretation or position on certain issues and existing laws. These bulletins also include recommendations and help insurers and consumers understand how to conduct insurance business in Texas. A review of the latest Commissioner's Bulletin B-0010-21 on 9 March 2021 provides a good example of the purpose of the bulletin.
Commissioner's Bulletin B-0010-21 entitled "Strong Winter Weather Adjustment Requirements for Freezing Losses" presents the following statements addressed to Texas insurance companies:
The Texas Department of Insurance (TDI) expects insurers to consider the unprecedented nature of the weather event 11-19 February 2021 when adjusting claims for frozen pipes and communicating with policyholders. (Emphasis in original.)
When TDI communicates with policyholders about losses not covered by their insurance policies, TDI encourages insurers to provide information on the availability of federal assistance. Information provided to policyholders should include the FEMA Application Website, disasterassistance.gov and the FEMA Disaster Assistance Helpline at 800-621-3362.
Bulletin B-0010-21 further states that property policies for homeowners, tenants and others, "may include provisions that loss caused by freezing is covered if the policyholder took" reasonable care "to maintain heat or turn off the water supply and drain pipes. The bulletin then recommends, among other things, the following five factors that insurers should consider when deciding whether a policyholder has taken "reasonable precautions" to prevent loss. According to TDI, insurers should consider:
- Whether the frequency and length of power outages that prevented many policyholders from maintaining heat in their homes and other covered properties. "This was beyond the control of policyholders."
- Whether policyholders may have been told that power outages would be short and intermittent, making policyholders less likely to believe that water closure was necessary.
- Whether tenants may not have had access to water mains or had any control over the water supply to their unit.
- Whether confusion about best practices for handling pipes in icy weather may have been caused by listening to various advice and sources,
- icy conditions may have created a risk of injury if policyholders had tried to turn off the water at a water supply.
Knowing that these factors can be considered by an insurance company helps insureds to be better prepared to provide information and potential evidence when filing a winter weather claim.
The last paragraph of this bulletin reminds Texas insurers that an enforcement action may be taken by TDI if an insurance company fails to comply with Texas Insurance Code § 541,060, which prohibits unfair damages proceedings by "not in good faith attempting to obtain a prompt , fair and just settlement of a claim when the liability for the claim becomes reasonably clear. "
Commissioner Bulletins ## B-0005-21, B-0006-21 and B-0007-21, issued in February 2021, immediately following the week of severe, cold weather in Texas, provide further examples of valuable information passed on by TDI. Each state: "TDI expects insurers to work with their policyholders when they recover from the disaster." These three bulletins then recommend insurance procedures and advice to respond to this icy weather event.
Bulletin # B-0005-21 calls for two procedures for insurers to take: (1) to close vacancies with homeowners. policy "for as long as is reasonably necessary" because many policyholders had been temporarily displaced by the freezing disaster. and (2) to provide a time limit for policyholders who needed more time to pay premiums.
Bulletin # B-0006-21 reminds insurers that they can use foreign adjusters to handle disaster-related claims but that licensed adjusters may not adjust the ceiling losses for an insurance company if the adjuster is a roofing contractor or supplier or supplier roofing services or products or is a controlling person in a roofing-related business. In the same way, a roofing contractor may not act as an adjuster for any property that the contractor provides or may provide roofing services. In this Bulletin, TDI, quoting bulletins to various Texas statutes / codes, insurers, adjusters, and contractors, reminds that:
- policyholders have the right to have their home repaired through their choice of contractor.
- Insurers and / or their agents may not misrepresent the terms / conditions of an insurance policy.
- Insurers may not engage in unfair settlement practices.
- If a contractor knows that his payment coming from an insurance company continues, he must not knowingly allow the insured not to pay or help that person not pay the applicable deductible.
- If a contractor has not maintained an address in the county or adjacent county to the damaged property in a disaster situation. for at least one year, it is forbidden for the contractor to demand full or partial payment before the work begins.
Bulletin # B-0007-21 talks about insurance, rating and non-renewal of policies after the week of severe weather and of particular importance is TDI's expectations that insurers would not redo, cancel, not renew, refuse to provide coverage or change a policyholder's classification or premium "solely because the policyholder is a victim of the disaster." This bulletin further states: "TDI expects insurers to avoid imposing additional burdens on victims of the disaster and encourages insurers to accept verbal requests for reasonable exemptions instead of written requests."
information to insurance companies and insured in the aftermath of Texas worst week ever with severe winter weather.
To read these or other Texas Insurance Commissioner Bulletins, go to https://www.tdi.texas.gov/bulletins/index .html. Help for winter weather insurance problems can also be found by calling Merlin Law Group in Houston, Texas, at 713-626-8880.