Insurer Abandons Efforts to Include Mandatory Arbitration in Homeowners’ Insurance Policies

Consumer advocates cheer the withdrawal of an insurance proposition that would have added pre-dispute binding arbitration to home insurance contracts.

On November 3, 2016, Texas Farm Bureau withdrew their proposal from the Texas Department of Insurance that would have allowed its homeowner insurance policyholders to pre-emptively sign away their right to sue the company in exchange for a discount on rates. The proposal stirred a fierce debate in meetings held by the Texas Department of Insurance, where some called it a raw deal for consumers.

“Texas homeowners will retain their constitutional rights and not fall prey to a flawed process that often rewards the powerful at the expense of justice,” Ware Wendell, executive director of Texas Watch, said in an email.

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