Gripes About Insurance Arbitration Requirements

Grand Prairie insurance attorneys and those in Duncanville, De Soto, Cedar Hill, Lancaster, Irving, Mesquite, Garland, and other places in Dallas County need to know changes that are being contemplated by the Texas Department of Insurance.
One change currently being contemplated is good news for insurance policy holders. Here is an excerpt from a bulletin put out recently.
“The Texas Department of Insurance is considering a rule to prohibit pre-dispute mandatory binding arbitration provisions in insurance products.
The basis of the proposed prohibition is that pre-dispute mandatory binding arbitration precludes covered persons from exercising substantive rights provided by the Insurance Code, including Chapters 541 and 542.
The rule would apply to policy-or-contract coverages for individuals for personal noncommercial use. The prohibition would apply to group or individual forms providing coverage in life, accident and health, annuity, credit, and property and casualty products, including home and auto.
The department invites your comments concerning substantive rights provided by statute and the protection of those rights.
The information received will assist the department’s development of the rule. This is an informal posting and not a publication for rulemaking.
To expedite the process, please submit comments electronically via email to the address below by 5:00 p.m. on Friday, November 16, 2012.
Thank you for your interest and assistance in this process.”
The bulletin goes on to tell persons who are interested to contact Nick Hoelscher with the Office of Policy Development Counsel. His phone number, fax and email address is included.
The email address for Nick Hoelscher is nick.hoelscher@tdi.state.tx.us. Anyone who is interested should make contact.
As the bulletin says, these pre-dispute mandatory binding arbitration provisions in insurance policies are not a good thing. These provisions severely hinder a person’s ability to stand up to their insurance company when the insurance company makes a decision that hurts their customer.
These provisions are only helpful to one side, the insurance company.
Chapters 541 and 542 of the Texas Insurance Code provide substantial relief to consumers who are harmed and of great benefit are the provisions that allow a consumer to recover their attorney fees and court costs when they prevail in a legal action. This allows a consumer to stand toe to toe with the insurance company and their teams of lawyers.
Without Chapters 541 and 542 of the Texas Insurance Code, it becomes a David versus Goliath fight. The net result of which is that the consumer often times gives up and tries to get on with their life while allowing the insurance company to prevail.