Texas Farm Bureau Insurance Company has reportedly filed a request with the Texas Department of Insurance (“TDI”) seeking to add an optional endorsement to the company’s homeowners insurance policies. If approved, the request would allow insureds to relinquish their right to sue the company in the event of a claim dispute in exchange for a lower policy premium. Under the proposal, insureds would instead be obligated to engage in mandatory mediation-arbitration with Farm Bureau.
Public Counsel and Executive Director of the Texas Office of Public Insurance Counsel, Deeia Beck, has expressed concern over the insurer’s endorsement request. Beck reportedly stated the proposed optional endorsement was unfair to insurance consumers due to the purportedly unequal bargaining power of the contract parties. In addition, consumer advocacy group Texas Watch also articulated concern over the proposal and encouraged TDI to “continue to prohibit the inclusion of mandatory binding pre-dispute arbitration clauses in residential contracts.”
Texas Insurance Commissioner David Mattax has scheduled a public meeting regarding Farm Bureau’s proposal for July 6th in Austin. The public is encouraged to submit written and oral comments related to the proposed optional endorsement by the close of business on the meeting date. The meeting will be broadcast live on TDI’s website.
Photo credit: roarofthefour via Foter.com / CC BY-SA
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