Senate Bill 14 and Insurance rates

Posted by Crystal Olenbush on Monday, June 9th, 2008 at 5:23pm.

Homeowners insurance has been a hot topic in recent years.  The Third Court of Appeals in Austin has now determined that a 2003 provision regarding homeowners insurance was unconstitutional.  The provision, which was part of the 2003 reform law, required the insurance rates of homeowners to be reduced. 

Known as Senate Bill 14, the law had actually required a 12% rate reduction to be implemented by 12 different companies.  One of these companies was State Farm Lloyds, which happens to be the largest insurer in the state. 

The law was initially passed out of concern regarding skyrocketing insurance rates, which resulted when State Farm and other companies found a loophole in the existing laws that allowed them to avoid having their rates regulated.  Although passing Senate Bill 14 seemed like a good idea at the time, the Third Court ruled that the current language of the law is unconstitutional.  The main problem with the current law is that the Courts feel it only protects the insurer from rates that could ultimately lead to insolvency.

This won’t be the last time that insurance companies will be facing this law, however, as lawmakers are planning to review the law when they reconvene in January.  Therefore, while the law as currently been repealed, there is still a chance that it will once again be in the books if the lawmakers can manage to find a way to word it in a more constitutional manner.

Posted by Jim Olenbush, Broker of Cantera Real Estate, Inc.  jim(at)

2 Responses to "Senate Bill 14 and Insurance rates"

Fairy wrote: Thanks for providing good information - this is really helpful

Posted on Friday, December 5th, 2008 at 3:58pm.

Dawn Boquet wrote: USA Today Lack of title insurance could slow sales of foreclosed homes
Foreclosed homes could get harder to buy now that one of the nation's largest title insurance companies has stopped insuring titles to homes foreclosed by JPMorgan Chase and GMAC Mortgage.

Posted on Monday, October 18th, 2010 at 12:52am.

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