AUSTIN, Texas — In another setback to ensuring that Texans get appropriate auto insurance refunds due to fewer claims and less driving, the Texas Department of Insurance (TDI) released misleading information to public officials. The information asserts an unsupported claim that drivers have seen $1.4 billion in insurance overcharges returned back into their wallets, one that is contradicted by market data.
Texas Appleseed, the Center for Economic Justice, Texas Watch, the Texas Public Interest Research Group (TexPIRG), and the Consumer Federation of America sent a letter to TDI and Texas legislators highlighting erroneous and misleading information that TDI has used to justify their failure to provide premium relief to consumers.
This comes after months of conversations and letters between the consumer groups and the agency. As the COVID-19 pandemic unfolded, the organizations first urged the agency to act starting in the spring, when there were widespread stay-at-home orders. The groups provided additional information and data as the pandemic continued, and met with the Department for a follow up in August.
“We all want to work closely with the agency, but are becoming increasingly concerned by the lack of action to protect Texans, as we navigate the generational circumstances of a hundred-year pandemic,” said Bay Scoggin, TexPIRG Director.
Texas law protects insurance customers from “excessive, inadequate, and unfairly discriminatory rates.” Fewer crashes and claims coupled with record profits by auto insurers indicate that Texans have been overcharged during the pandemic.
“We have been evaluating different state responses to the pandemic all year, and while some have required refunds for consumers, Texas’s response has fallen short,” said J. Robert Hunter, CFA’s Director of Insurance. “The Texas Department of Insurance has not ensured that all Texans get the relief they deserve. As a former Texas Insurance Commissioner, I am very disappointed.”
The consumer groups point to shareholder reports and their own research to show that auto insurance companies made record profits as lockdown efforts were put in place across the country. By Texas Appleseed’s estimate, Texas auto insurers made between $606 million and $869 million in COVID-related profits even while consumers continue to struggle to pay bills during the economic downturn.
“Texas families are hurting financially, and they need insurance rate relief right now. Lines at food banks are growing. Evictions are on the rise. Every dollar counts for families across our state. Insurance overcharges hurt even more during the pandemic,” said Ware Wendell, Texas Watch Executive Director.