Texas Senate Bill SB1756

Texas 2021 - 87th Regular

Caption

Relating to the payment of insurance deductibles and release of insurance proceeds to contractors for property insurance claims.

Impact

The bill is poised to bring significant alterations to the way property insurance claims are processed, particularly impacting policyholders and contractors. By mandating that proof of deductible payment must be provided before an insurer releases funds for a claim, it establishes a more stringent regulatory framework. This will likely enhance the accountability of contractors and ensure that policyholders adhere to their deductible obligations, which could lead to a reduction in fraudulent or unethical practices in the insurance sector.

Summary

Senate Bill 1756 aims to clarify and regulate the payment of insurance deductibles and the terms under which insurance proceeds can be released to contractors for property insurance claims. This bill amends specific sections of the Business & Commerce Code and the Insurance Code, primarily focusing on how deductibles are handled in transactions involving property insurance. The legislation seeks to prevent practices that may allow contractors to help insured individuals circumvent their financial responsibilities related to deductibles.

Contention

Notably, the bill addresses several contentious points, particularly the prohibition against waiving deductibles in exchange for the use of preferred contractors. This provision has raised concerns among various stakeholders, including contractors and insurance companies, as it could alter existing business practices and potentially lead to disputes over the interpretation and implementation of the new rules. Critics fear that such a regulatory environment could hinder the efficiency of claim processing and negatively affect consumers in need of prompt assistance following property damage.