Auto insurance policies and their associated rates are subject to the insurance laws of Texas as well as rules and regulations adopted by the Texas Department of Insurance (TDI). While the insurance laws and regulations apply to most insurers, some insurers, such as a county mutual insurance companies, are exempt from insurance laws and regulations that do not specifically apply to them.
For most consumers, understanding all the laws and regulations is difficult, if not impossible. However, these laws and regulations may have a significant impact on maintaining your policy, your decision to file a claim, and how your insurance company must handle your claim. To assist you in this endeavor, the Office of Public Insurance Counsel has prepared a Consumer Bill of Rights that provides a summary of the various rights afforded to you by law or regulation. You may access this document by clicking here.
A brief explanation of the framework of insurance regulations that apply to personal auto insurance in Texas is provided below.
Regulation of Personal Auto Policy Forms
Personal auto insurance policy forms must be approved by TDI prior to an insurer using the form. Insurers must file their policy forms in accordance with rules adopted by TDI 60 days before the policy form can be used. The policy form is considered approved after the 60 days has expired unless the commissioner approves or disapproves it during the 60-day period. The commissioner can extend the 60-day period by an additional 10 days.
The commissioner can disapprove a policy form that: (1) violates any law, including a rule adopted by TDI; or (2) contains a provision, title or heading that is unjust or deceptive, encourages misrepresentation, or violates public policy.
The insurer’s filings must include a detailed explanation of the coverage being provided, amended, and/or deleted in each of the filed policy forms. The Office of Public Insurance Counsel (OPIC) staff reviews each filing and will formally object to the filing or provide TDI comments when necessary. OPIC's review is serious and thorough and our objections and comments have contributed to numerous changes in the approved policy forms that have benefited consumers.
Regulation of Personal Auto Rates
Auto insurance rates must be filed with TDI prior to an insurer using the rates. Insurers must file their rates, supplementary rating information, and any revisions in accordance with rules adopted by TDI. Insurers may begin using the newly filed rates on or after the date of the filing.
Rate filings must include enough information for TDI to establish that the newly filed rates are not excessive, inadequate, unreasonable, or unfairly discriminatory. The commissioner can disapprove rates either before or after they go into effect. Refunds can be ordered if it is determined excessive rates were charged to policyholders.
The Office of Public Insurance Counsel (OPIC) reviews each auto rate filing. If the rates appear excessive or otherwise violate statutory rating standards, OPIC will formally object to the filing or provide comments to TDI. OPIC can also request the commissioner set a disapproval hearing on the filed rates. These actions have resulted in numerous rate and fee reductions that benefit consumers.