Water Claims Legislation Passes Texas Senate Committee

Legislation authored by Texas Senator Troy Fraser to speed insurance companies’ response to water damage claims, limit the amount insurers can charge homeowners for previous water damage claims, and require the licensing of public insurance adjusters was approved by the Senate Business and Commerce Committee.

“These three areas are all intended to help the policyholders,” Fraser, R-Horseshoe Bay, commented in a statement on the Senate Web site. “By addressing the problems associated with water damage and mold claims, we hope to decrease the losses of incurred by insurance companies. That, in turn, should lead to lower insurance rates.”

The measure, a committee substitute for Senate Bill 127, combined the elements of three separate bills ( Senate Bills 126, 127 and 128 ) filed by Fraser last November.

Under the legislation, the state insurance commissioner is given the authority to set the procedures and time frames for insurers to respond to water damage claims, which, when left unchecked, compound the problem and contribute to the spread of mold. “

Another provision of the bill also limits the surcharge that insurance companies may charge on a homeowners policy to no more than 15 percent of the total premium.

The third component of the bill establishes a licensing and regulatory framework for public insurance adjusters, who, for a fee, act on behalf of homeowners in negotiating the settlement of a claim.

Under the bill, public adjusters’ commissions may not exceed 10 percent of the settlement.

The testing and licensing procedure for applicants would be established by the Texas Department of Insurance. Applicants would be required to have experience and training, and to be able to demonstrate sufficient knowledge in the assessment of property values and damages.