| (a) Purpose. The purpose of this section is to protect
persons and property from being unfairly stigmatized in obtaining
residential property insurance due to previous mold damage, or by
filing a mold damage claim, a water damage claim, or certain appliance-related
claims under a residential property insurance policy.
(b) Definitions. The following words and terms, when
used in this section, have the following meanings:
(1) Appliance--A household device operated by gas or
electric current, including hoses directly attached to the device.
The term includes air conditioning units, heating units, refrigerators,
dishwashers, icemakers, clothes washers, water heaters, and disposals.
(2) Appliance-related claim--A claim for a loss arising
from the discharge or leakage of water or steam from an appliance
that is the direct result of the failure of the appliance.
(3) Consumer--The person making the application to
insure a property and includes both existing insureds and applicants
for insurance.
(4) Insurer--An insurance company, reciprocal or interinsurance
exchange, mutual, capital stock company, county mutual insurance company,
farm mutual insurance company, association, Lloyd's plan company,
or other entity writing residential property insurance in this state.
The term includes an affiliate as described by Insurance Code §823.003
if that affiliate is authorized to write and is writing residential
property insurance in Texas. The term does not include the Texas Windstorm
Insurance Association, the FAIR Plan, or an eligible surplus lines
insurer regulated under Insurance Code Chapter 981.
(5) Residential property insurance--Insurance against
loss to residential real property at a fixed location or tangible
personal property provided in a homeowners policy, including a tenant
policy, a condominium owners policy, or a residential fire and allied
lines policy.
(6) Underwriting guideline--A rule, standard, guideline,
or practice, whether written, oral, or electronic, that is used by
an insurer or an agent of an insurer to decide to accept or reject
an application for a residential property insurance policy or to determine
how to classify risks that are accepted for the purpose of determining
a rate.
(7) Water damage claim--A claim for a loss arising
from the discharge or leakage of water or steam that is the direct
result of the failure of a plumbing system or other system that contains
water or steam.
(c) Water damage claims - underwriting. An insurer
may not use an underwriting guideline based solely on a single previous
water damage claim either filed by the applicant or on the covered
property. This subsection does not affect the surcharge and renewal
provisions in Insurance Code §551.107 (concerning Renewal of
Certain Policies; Premium Surcharge Authorized; Notice).
(d) This subsection contains provisions related to
underwriting and rating based on a previous appliance-related claim.
(1) Except as provided in Insurance Code §544.353(e)
(concerning Restrictions on Use of Claims History for Water Damage)
an insurer must not use a previous appliance-related claim as a basis
for determining a rate to be paid or for determining whether to issue,
renew, or cancel a residential property insurance policy if the consumer
complies with the requirements in Insurance Code §544.353(c)
and §544.353(d). It is the consumer's option whether to have
the appliance-related claim inspected and certified. The consumer
is responsible for the cost of the inspection and certification. An
appliance-related claim that is not inspected and certified is subject
to subsection (c) of this section.
(2) Nothing in this subsection exempts an insurer from
the notice provisions in Insurance Code §551.107(e). However,
appliance-related losses are a special class of non-weather-related
losses. The notice must be specific to the insured's appliance-related
loss history.
(3) The following individuals are inspectors that may
have the knowledge and experience in water damage remediation to inspect
and certify the proper remediation of an appliance-related claim:
(A) inspectors licensed or certified through the Voluntary
Inspection Program under Insurance Code Chapter 2003, Subchapter C;
(B) persons licensed to perform real estate property
inspections under the Real Estate Licensing Act;
(C) persons licensed as mold assessment consultants
or mold remediation contractors by the Department of Licensing and
Regulation under Occupations Code Chapter 1958;
(D) engineers licensed by the Texas Board of Professional
Engineers; and
(E) persons authorized by an insurer to perform appliance-related
water damage remediation inspections.
(4) An insurer that maintains a list of authorized
inspectors must give verbal and written notice that a claimant has
the right to choose an inspector. The inspector does not have to be
on the insurer's list. The insurer must give verbal notice when the
claimant calls to report the claim. The insurer must send written
notice within 15 days after the insurer receives notice of the claim.
(5) If a consumer uses an inspector from an insurer's
list, the insurer may not reject or challenge the certification. If
the consumer uses an inspector who is not on the insurer's list, the
insurer may reject or challenge the certification by reinspecting
the property. The insurer must give the consumer a list of all reasons
it will not accept the certification. The insurer must keep all documentation
of the reinspection.
(6) If an inspector physically inspects the property
and determines that the appliance-related water damage was properly
remediated, the inspector must issue a water damage repair certificate
(PC327 WDR-1) within 10 days of completing the inspection.
(7) Water damage repair certificate form (PC327 WDR-1).
An inspector must use the water damage repair certificate form (PC327
WDR-1) found on TDI's website at www.tdi.texas.gov. TDI adopts by
reference the water damage repair certificate form (PC327 WDR-1) that
an inspector must use, subject to the provisions of this subchapter
and Insurance Code Chapter 544. Persons using the form should confirm
that they are using the most recent online version before giving a
copy to the property owner.
(8) TDI has information about inspectors who may have
the knowledge and experience in water damage remediation to inspect
and certify the proper remediation of an appliance-related claim.
A list of inspectors can be obtained from TDI's website or by requesting
it from the TDI Property and Casualty Lines Office.
(e) This subsection contains provisions related to
underwriting based on previous mold damage or a previous mold damage
claim.
(1) An insurer may not use an underwriting guideline
based on previous mold damage or a previous mold damage claim filed
by the applicant or on the covered property if:
(A) the property is eligible for residential property
insurance coverage;
(B) the property had mold damage;
(C) mold remediation was performed on the property;
and
(D) the property was:
(i) remediated in accordance with the requirements
in Occupations Code Chapter 1958, Subchapter D and any applicable
rules adopted by the Department of Licensing and Regulation, and inspected
by a licensed mold assessment consultant; and a mold damage remediation
certificate (PC326 MDR-1) was issued to the property owner under Occupations
Code §1958.154, certifying with reasonable certainty that the
underlying cause or causes of the mold at the property were remediated;
or
(ii) inspected by a licensed, independent mold assessment
consultant or a licensed adjuster; and a mold damage remediation certificate
(PC326 MDR-1) was issued to the property owner under Occupations Code §1958.154,
certifying that, based on the mold assessment inspection, the property
does not contain evidence of mold damage.
(2) Mold damage remediation certificate form (PC326
MDR-1). Mold remediation contractors, mold assessment consultants,
and adjusters must use the mold damage remediation certificate form
(PC326 MDR-1) found on TDI's website at www.tdi.texas.gov or by requesting
the form from the TDI Property and Casualty Lines Office, or from
the Department of Licensing and Regulation. TDI adopts by reference
the mold damage remediation certificate form (PC326 MDR1) that must
be used, subject to the provisions of this subchapter, Occupations
Code Chapter 1958, and Insurance Code Chapter 544. Persons using the
form should confirm that they are using the most recent online version
before giving a copy to the property owner.
(3) This subsection does not affect the surcharge and
renewal provisions in Insurance Code §551.107 (concerning Renewal
of Certain Policies; Premium Surcharge Authorized; Notice).
(f) This subsection contains provisions for filing
underwriting guidelines related to water damage claims, previous mold
damage, or mold damage claims.
(1) All underwriting guidelines relating to water damage
claims, previous mold damage, or mold damage claims must be filed
with TDI. They must comply with the requirements in this section and
with any rules adopted by the Commissioner.
(2) Underwriting guidelines relating to water damage
claims, previous mold damage, or mold damage claims must be submitted
to TDI as described in §5.9310(f) of this title (relating to
Property and Casualty Transmittal Information and General Filing Requirements).
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| Source Note: The provisions of this §21.1007 adopted to be effective December 26, 2002, 27 TexReg 11986; amended to be effective January 1, 2004, 28 TexReg 11603; amended to be effective August 13, 2006, 31 TexReg 6228; amended to be effective May 7, 2019, 44 TexReg 2266; amended to be effective November 7, 2021, 46 TexReg 7408 |
