Texas Insurance Providers Can’t Require Uninsured Coverage

The Texas Department of Insurance has issued a bulletin to providers statewide, reminding them that they cannot legally force policyholders to buy more coverage against uninsured and underinsured motorists than they want.

The bulletin, sent this week to all insurers and their associations, states that policies protecting motorists against bodily injury caused by drivers with too little or no insurance and those covering against property damage caused by such drivers are two separate types of coverage.

State insurance law bars insurers from requiring policyholders to purchase both types, the bulletin points out.

That means providers “can’t require that if you buy one you have to buy the other,” department spokesman Jerry Hagens said in a telephone interview.

Uninsured/underinsured (UM/UIM) policies protect consumers in the event they get into an accident caused by a driver who has no policy or has low liability limits that are not enough to pay for injuries or damages. It is not included in all policies with cheap liability insurance in Texas.

Uninsured TexansUM/UIM bodily injury policies in Texas pay without deductibles for the policyholder’s expenses including medical bills, lost wages and pain and suffering, according to regulators. Property damage coverage pays for the policyholder’s auto repairs, rental cars and other costs, and comes with an automatic $250 deductible.

State law requires that insurers offer those policies, but drivers are not obligated to buy them. Providers must supply forms allowing consumers to select or reject either one or both types of policy.

Hagens could not confirm what prompted the bulletin, but said such notices are typically sent out “when we identify problems through our complaints process.”

The bulletin also states that UM/UIM policies cannot exceed the limits already set under a motorist’s liability coverage.

“Insurers are encouraged to review their current business practices to ensure they are in compliance,” with state laws regarding underinsured and uninsured policies, the bulletin says.

About Gregor McGavin
Gregor McGavin is an award-winning journalist who has reported across the country for such publications as The Associated Press, the Arizona Republic, the Pittsburgh Tribune-Review and the Press-Enterprise.

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