Today the Texas House of Representatives Committee on Insurance considered two bills purporting to increase your understanding of your homeowners insurance and car insurance.

HB 1554 relating to the language of personal automobile or residential property insurance policy documents and related materials by Rep. Smithee would authorize an insurer to provide a customer a copy of insurance policy documents in a language other than English. In the event of any conflict between the English version and the alternative language version, the English version would prevail. HB 1555 relating to the status of personal automobile or residential property insurance policy summary documents by Smithee would authorize an insurer to provide plain language summaries of insurance policies. Both HB 1554 and HB 1555 are clear that they would not modify the policy of insurance but are rather intended to assist insureds understand these complex policy documents.

It is unclear why HB 1554 or HB 1555 are necessary. Presently, there is nothing that prevents or prohibits insurance companies from providing copies of the insurance policy in a language other than English or from providing policy summary documents. Any claims that they may run afoul of penalties for misrepresenting policy provisions are baseless, as an insurance company need only include a disclaimer that the policy controls.

These bills appear to be a backdoor way for insurance companies to mislead policy holders while avoiding the consequences. Members of the committee seemed aware of the potential implications.

Work remains to be done to ensure that fly-by-night insurance companies don’t use these provisions to misrepresent their policies to insureds. The bills were withdrawn and committee substitutes will be considered at a later date.

You can follow the bills here:

HB 1554 – https://capitol.texas.gov/BillLookup/History.aspx?LegSess=86R&Bill=HB1555

HB 1555 – https://capitol.texas.gov/BillLookup/History.aspx?LegSess=86R&Bill=HB1555