Would you waive your rights to receive a, wait, nothing? Internal documents show that Texas Farm Bureau wanted to propose to the Texas Department of Insurance a sham discount on policy rates in exchange for the policyholder to limit their rights against the insurance company
With all the recent extreme weather patterns we have seen here in the Houston and surrounding areas, our law firm has received a lot of calls from potential clients about their rights against their property insurance provider. The bottom line is that a lot of people feel that they pay policy premiums to their insurance company year after year, yet when they finally need the insurance company to pay a legitimate claim for damages covered under the terms of their policy, the insurance company finds some reason to deny, partially deny or significantly undervalue the actual damage to the home as a result of the loss. Policy premiums are expensive enough but when you have to come out of your own pocket several thousand dollars over your deductible, it leaves homeowners questioning the point of carrying insurance on their homes.
The issue, however, is if you have a mortgage on your property, you are required, at least in Texas, to carry insurance coverage on your property. The rising premiums leave a lot of homeowners in a bind when a loss occurs to their home. One insurance provider, Texas Farm Bureau, decided to come to the rescue and offer a “great policy discount.” However, internal documents from Texas Farm Bureau’s meeting with the Texas Department of Insurance (TDI) show that not only was the “discount” a sham but in exchange for a sham “discount,” Texas Farm Bureau would take away your legal rights.
In a policy submitted to TDI for approval late last year, Texas Farm Bureau purported to offer a discount to policyholders willing to waive their legal rights by forcing all disputes into arbitration; however, internal documents showed that Texas Farm Bureau would raise rates in certain counties and then offer a “discount” matching those rate increases and in exchange for this non-existence discounts, consumers would be asked to waive their legal rights. The proposed policy would be a great deal for the insurance companies as they would be receiving the same amount in policy premiums from its policyholder but the insurance company would get the advantage of forcing all disputes into the biased, secret process of arbitration where they set the terms and pick the decision maker. To sum this all up, Texas Farm Bureau wanted to just take its policyholders legal rights away while offering NOTHING in return.
I understand that with the recent disasters, a lot of people are experiencing financial hardship so a “discount” on their policy premiums would seem like a great incentive to waive certain rights. However, if you find yourself in a situation in which your insurance company is offering a “discount” on your premiums, look to see if recently your rates have increased and what you have to give up in exchange for a “discount.” Even if an insurance company would offer a valid discount without first raising your rates (or doing so in the future), is a slight discount worth giving up your rights against your insurance company? The sad reality is most people think their insurance company is their best friend, a trustworthy “neighbor” and they are in “good hands” – until they make a claim against their insurance company and realize the sad truth that many insurance companies are in the business of accepting policy premiums and not paying legitimate claims.