Conversations about auto insurance claims are apparently exempt from the First Amendment to the U.S. Constitution in the great state of Texas.
Simply asking your insurance agent or company a question about your policy can raise your premium if you live in Texas, Dave Lieber of The Dallas Morning News’ watchdog column reported. Texas’s state legislature passed a law making it illegal for insurers to punish people who ask questions about their policies, but exempted auto insurance.
This apparently occurred because lobbyists for insurance companies convinced the legislature to exempt auto policies from the law. Texans can apparently ask all the questions about homeowners and renters’ insurance without fear of retaliation, yet they cannot do the same for auto insurance. It is unclear if persons with so-called “bundled policies” could see their auto insurance premium increase if they asked a question about their homeowners’ policy.
“Volunteering information that you are even thinking about making an auto claim is enough for a Texas insurance company to raise your rates,” Lieber wrote. “That’s actually allowed under Texas law.”
A man named Bill Portz found this out the hard way, Lieber noted. Portz and his neighbor simply called his insurance company to ask if they had a claim after Portz’s truck hit his neighbor’s wall. Neither person filed a claim, but Portz’s premium went up by $200 a year.
Important Lessons for All Americans
Mr. Lieber’s excellent column contains two important lessons for drivers all over the United States. They are:
- Do not ask your insurance company about a possible claim until you’ve checked your state law. Since there are 50 states, each with its own rules on car insurance, it is highly likely that other states have the same rule as Texas.
- What you do not know about auto insurance and state law can hurt you. There are pitfalls in the insurance regulations of almost every state in the union. It is legal for insurers to sell auto policies that do not provide complete coverage in Florida, and there is no requirement for auto insurance in New Hampshire.
What You Can do to Protect Yourself
There are some steps that you can take to protect yourself in this situation. Some of these actions include:
- Do not contact your insurance company about a possible claim, unless you actually intend to file one.
- If you have a question about your coverage, ask an attorney who has some experience in such matters. Personal injury attorneys are often highly knowledgeable about auto insurance policies. If you cannot afford an attorney, see if free legal advice is available area through the Bar Association, the Legal Aid Society, or a law school. Law schools often run free clinics in which law students provide advice.
- If the insurer raises your policy because of a question, change insurance companies. There are lots of insurance companies out there that want your business. One of them will undoubtedly be very happy to accept your check each month.
- If your premium goes up because of a question, call the insurance company and tell them you plan to change policies because of it. If enough policyholders switch insurers, the company will get the message and stop this practice.
Something to remember is that as a consumer, you have one very important right. The free enterprise system gives you the right to change insurance companies. Using that right is the fastest way to send Big Insurance a message.