Committee considers bill banning forced insurance bundling; substitute narrows scope
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Summary
A committee substitute to the bill that would prohibit insurers from conditioning a homeowners policy on purchasing auto coverage was introduced and adopted for further consideration; sponsors said the substitute excludes wind/hail, flood and umbrella policies and frames the practice as an unfair method of competition.
A committee substitute to legislation prohibiting insurers from conditioning the issuance or renewal of certain residential insurance policies on the purchase of a personal automobile policy was introduced, amended and left pending by the Committee on Business & Commerce.
Senator West described the bill as targeting "enforced bundling," where an insurer conditions a homeowners policy renewal on the customer also moving their auto insurance to the same company. "We're not trying to prohibit voluntarily bundling," West told the committee, emphasizing that the bill seeks to preserve consumer choice while prohibiting practices that force consumers to buy additional lines to keep coverage.
After stakeholder discussions, the committee substitute narrowed the bill's scope. Senator Nichols summarized the substitute: it excludes windstorm and hail insurance, flood insurance, and personal umbrella policies; makes it an unfair method of competition and an unfair or deceptive trade practice to condition issuance, delivery or renewal of a residential private insurance policy on purchase of a personal automobile policy from the same insurer or an affiliated insurer; and likewise makes it illegal to condition issuance or renewal of a personal automobile policy on purchase of a residential property policy.
Consumer advocates, including Ware Wendell of Texas Watch and Anne Bador of Texas Appleseed, testified in support, saying forced bundling reduces consumer choice and can stifle competitive pressure on pricing. A resource witness from the Texas Department of Insurance answered committee questions clarifying that the bill addresses required bundling while allowing consumers to voluntarily choose bundled discounts.
The committee adopted the substitute and left the bill pending for further consideration.
Ending: The substitute aims to ban coercive bundling while preserving voluntary discounts; committee action will continue as the bill remains pending.
