TDI encourages carriers to provide flexible payments
The Texas Department of Insurance has started encouraging insurance companies to provide more flexible payments. “the Commissioner of Insurance has determined that the COVID-19 pandemic is a disaster under Texas Insurance Code Section 542.059(b). This declaration is necessary due to the significant disruption to policyholders, carriers, and their staff caused by this disaster, in particular the impact and volume of claims expected to be filed as a result of COVID-19.” stated the bulletin.
What does this mean?
This means that policyholders will have more flexible options for payments and even delayed payments in some cases. However, this can differ by the carrier, and sometimes even the product. Calling your insurance carrier can give you a better understanding of the current procedures and flexible payment options. This does only apply for the time being, additionally, it should only be used for those directly affected by COVID-19.
What are the carriers required to provide?
The TDI extended the prompt payment deadline for claims, giving insurance companies more time to process claims. While they also are having carriers give premium payments a grace period of sorts. However, they do not specifically outline a timeline for a grace period. They did mention that the prompt payment laws are to be extended by 15 days for carriers and insurance companies.
“Taken together, the Governor’s suspension and the Commissioner’s declaration have the effect of extending claim-handling deadlines imposed by the state’s prompt payment laws for an additional 15 days to help carriers respond to the COVID-19 outbreak. This extension will be in effect until the Governor’s suspension and Commissioner’s declaration are lifted.
Carriers must continue to:
- Promptly identify, evaluate, and resolve claims.
- Promptly acknowledge receipt of a claim.
- Promptly make appropriate assignments for the investigation of a claim.” states The Texas Department of Insurance.
Premium payments grace period
While this is not a set requirement, TDI strongly encourages the use of a “grace period” for those affected by COVID-19 to give them more time to recover financially, while also keeping their current insurance coverage. For more information on this, contact your specific insurance carriers or talk to your agent,