SB 213: Home and Auto Insurance Bundling that Leaves the Choice to Consumers

Today, Texans can visit nearly any restaurant and find some form of bundled “meal deal.” It could be an appetizer and main course at a sit-down restaurant, or perhaps a complete meal at a drive-thru. This option can save customers money if it’s something they want.

If it’s not something they desire, they can still order each item separately. They can order the cheeseburger on its own or an order of fries individually. Texans can even request just a drink if that’s all they want. Restaurants won’t deny customers service entirely if they don’t opt for the bundled meal deal.

That’s not always true for home and auto insurance. Some insurers are telling customers they must bundle their insurance coverage, or the company won’t serve them at all. When customers decline the bundled offer, the insurers cancel or refuse to renew coverage. This may affect customers’ ability to obtain insurance from another company, although no one is really sure what factors are considered in the “black box” insurance companies use to accept or deny customers. Companies only provide an explanation for why they’re refusing to offer coverage if a customer specifically asks for it.

SB 213, introduced by Sen. Royce West (D-Dallas), prohibits companies from requiring customers to bundle their services under the threat of non-renewal, cancellation, or denial of service. This law benefits both customers and the competitive insurance market in Texas.

Insurance rates are increasing, and in many cases, it can be challenging for Texas families to find affordable coverage. Customers should have the freedom to mix, match, or bundle their insurance needs in a way that best suits their individual needs and budget.

This is why Sen. Robert Nichols (R-Jacksonville) has been diligent in hearings to ensure that any legislation that passes doesn’t inadvertently prevent customers from bundling if that’s what best suits their needs. For many customers, including Sen. Nichols, choosing a bundle makes the most sense.

For several years, TCA members have communicated that insurance companies, especially after large storms and the following claims, are forcing customers to bundle all of their insurance needs or face non-renewal. One Dallas-area TCA member said the insurance company wouldn’t even provide a quote on how much the bundled insurance would cost until they transferred their coverage to that provider.

The insurers’ position seems to be, "Commit to us, and then we’ll tell you how much you have to pay.” That’s good for them, but not for the Texas consumer.

Sen. West’s excellent bill will safeguard Texas consumers while maintaining a robust and competitive insurance market in Texas. That’s why an additional 10 Senators are listed as sponsors, with an equal number of Republicans and Democrats backing the bill.

Good bills like this deserve swift action by our lawmakers. We hope it moves quickly through both houses.

Sandra Haverlah is President of Texas Consumer Association, a 501c(4) non-profit organization that has been representing individuals and small businesses on pocketbook issues for over 50 years. www.texasconsumer.org