Overall Vote Recommendation

Yes

Principle Criteria

Free Enterprise

Property Rights

Personal Responsibility

Limited Government

Individual Liberty

Digest

SB 213 prohibits insurance companies from requiring consumers to purchase both residential property and personal automobile insurance policies as a condition for issuing, renewing, or delivering either type of policy. The bill amends Chapter 551 of the Texas Insurance Code by adding Subchapter F, which defines the affected policies and classifies forced bundling as an unfair or deceptive act under Chapter 541 of the Insurance Code. This ensures that consumers have the freedom to select insurance products independently, rather than being coerced into package deals that may not suit their needs.

The bill exempts certain types of insurance policies, including windstorm, hail, flood, and personal umbrella insurance, acknowledging that these coverages often require bundling due to their specialized nature. By focusing on residential property and auto insurance, the legislation targets a common industry practice that can limit consumer choice and potentially inflate costs.

The originally filed version of SB 213 broadly prohibited insurers from requiring consumers to bundle any personal lines property or casualty insurance policies as a condition of issuing or renewing coverage. It placed this restriction under Chapter 541 of the Texas Insurance Code, which deals with unfair competition and deceptive practices. This version applied universally, making it illegal for insurers to tie the purchase of one policy to another across all personal insurance lines, without exceptions.

The Committee Substitute narrowed the bill's scope significantly, focusing specifically on residential property and personal automobile insurance rather than all personal lines of property or casualty insurance. Additionally, it moved the provision from Chapter 541 to Chapter 551, placing it in a section that directly governs policy issuance conditions rather than broad unfair trade practices. The substitute version also introduced exemptions for windstorm, hail, flood, and personal umbrella insurance policies, recognizing that these types of coverage often require bundling due to their unique risk factors.

Moreover, the language was refined to prohibit the "contingency" of policy issuance rather than using the term "bundling" broadly. This clarification ensures that insurers can still offer optional bundled discounts but cannot require a consumer to purchase multiple policies to obtain coverage. These changes make the bill more targeted and balanced, protecting consumers while minimizing unintended regulatory burdens on insurers.

Author

Royce West

Co-Author

Carol Alvarado

Paul Bettencourt

Molly Cook

Sarah Eckhardt

Peter Flores

Bob Hall

Juan Hinojosa

Nathan Johnson

Lois Kolkhorst

Mayes Middleton

Tan Parker

Angela Paxton

Sponsor

Jay Dean

Contact the Author

Sen. Royce West

Capitol Phone:

(512) 463-0123

Capitol Office:

CAP 1E.5

E-Mail:

[email protected]

Visit Official Website

Fiscal Notes

The fiscal implications of SB 213, as analyzed by the Legislative Budget Board (LBB), indicate that the bill would have no significant fiscal impact on the state government. The report assumes that any costs associated with implementing the bill could be absorbed using existing resources within the Texas Department of Insurance (TDI), meaning no additional state funding or staffing would be required.

Additionally, the bill is expected to have no fiscal impact on local governments. Since the legislation primarily affects private insurance companies and their policy offerings, it does not impose any new financial obligations or administrative burdens on municipalities, counties, or other local entities. The bill’s regulatory changes are limited to consumer protection and market practices, rather than imposing new taxes, fees, or expenditures.

Overall, SB 213 is fiscally neutral, ensuring consumer protections without generating additional costs for the state or local governments. This makes it a low-risk policy change from a budgetary standpoint.

Vote Recommendation Notes

SB 213 directly addresses anti-competitive insurance practices by making forced bundling of homeowners and auto insurance illegal. The bill was prompted by a 2024 incident in North Texas, where an insurance provider threatened to drop homeowners' coverage unless customers also purchased auto insurance from the same company. Since Texas law currently does not prohibit this practice, and a Texas Department of Insurance (TDI) rule addressing it could be rescinded by future regulators, SB 213 provides a permanent statutory solution.

From a liberty principles perspective, the bill supports individual liberty by ensuring consumers are not coerced into purchasing unnecessary or unwanted insurance policies. It also protects private property rights, as homeowners and auto owners retain the freedom to choose insurance providers independently. While some might argue the bill introduces government intervention, it does not limit market competition but rather prevents coercive business practices, making it neutral on free enterprise.

Given these considerations, Texas Policy Research recommends that lawmakers vote YES on SB 213.

View Bill Text and Status