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Montemayor warns homeowners to read renewal noticesDecember 27, 2001
Insurance Commissioner Jose Montemayor today reminded Texans that some homeowners coverages are changing and consumers need to understand the policies they are offered at renewal time. "We know that one major insurance company is no longer offering its policyholders the comprehensive HO-B homeowner policy, but rather an HO-A policy," Montemayor said. "Unless endorsements are added, the HO-A policy excludes coverage for such losses as frozen pipes, water discharges and damage from falling tree limbs. The unendorsed HO-A also pays only actual cash value, not replacement cost, for damaged house-hold contents and damaged building components, such as roof coverings." Montemayor advised Texans to carefully review their homeowner renewal policies to make sure they understand any changes in their policy. The Commissioner also suggested that consumers learn more about homeowners insurance by browsing through TDI's Web site at www.tdi.state.tx.us or requesting the free brochure, Homeowners Insurance: A Guide for Texas Consumers from TDI's publication order line at 1-800-599-SHOP (7467). In addition some insurance companies that are exempt from rate regulation are raising homeowners premium rates substantially. "We know that consumers who shop around for their insurance coverage can save money," Montemayor said. "The educated insurance shopper also knows what discounts are out there. It's all on our Web site." Beginning January 1, insurers may use the revised HO-B policy that no longer covers the testing, treating, containing and disposal of mold. Insurance companies, however, must offer homeowners the opportunity to buy back mold remediation coverage in increments of 25 percent, 50 percent and 100 percent of their policy limits. Montemayor said consumers who shop around for less expensive homeowner coverage should not cancel their current policies until they have another policy in hand. In addition, insurance companies may cancel newly issued policies in the first 90 days for virtually any reason except legally prohibited unfair discrimination. "A homeowner doesn't want any gap in coverage and with insurers looking carefully at a homeowner's past claims, some companies are reluctant to add new policyholders who have had any water problems," Montemayor said. If a consumer cancels a policy to buy another one, the previous insurance company must refund the unused portion of the premium to the homeowner.
Texas Department of Insurance For more information contact:
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