Know Your Texas Insurance Rights

Texas Insurance Code • TDI Consumer Bill of Rights

Texas does not require an insurer to sell you the cheapest policy in the state. It does require the company to follow a written set of rules about why it can say no, charge more, limit coverage, or nonrenew. Those rules live mainly in Insurance Code Chapter 544 (unfair discrimination), Chapter 559 (credit information), the Personal Auto and Homeowners Consumer Bills of Rights, and TDI’s underwriting guidance. This is the plain-English version of what a company may not do to you — and what it still legally can do if it can prove risk.

The four sentences most Texans see on a rights flyer are correct. They are also incomplete. Race is not the same legal bucket as age. Credit is not a ban on credit. Geography is not a free pass to redline a ZIP code without an actuarial file. If you only memorize the flyer, you will lose arguments you should win and pick fights you cannot win.

The short list — then the statute behind it

An insurance company may not:

• Turn you down or charge you more because of your race, color, religion, or national origin.
• Turn you down or charge more because of your age, gender, marital status, geographic location, or disability unless it can show you are a greater risk of loss than other people it is willing to insure.
• Turn you down, charge you more, or treat you differently than other people in your rate or risk class unless it can show you are a greater risk than they are.
• Turn you down or charge you more only because of your credit score.

That language tracks the Consumer Bill of Rights TDI requires carriers to give you with a personal auto or homeowners policy. Chapter 544.002 is the statute underneath it. The company may not refuse to insure you, refuse to continue insuring you, limit the amount or kind of coverage, or charge a different rate for the same coverage because of the listed traits — with the actuarial exception carved out for the second group of traits, not the first.

Bucket one: traits that are off-limits, period

Race, color, religion, and national origin are not rating variables in Texas personal lines. The carrier does not get to say “our loss data supports a higher premium for this group.” The prohibition is on using those traits to refuse, restrict, or reprice coverage. If a producer, an underwriting guideline, or a black-box model is using those traits — or an obvious stand-in designed to do the same work — that is the fight you take to TDI, not a negotiation about “risk class.”

This is the easy part of the law and the part people still need in writing. A quote that changes after someone hears an accent, sees a name, or notes a place of worship is not “underwriting.” It is a Chapter 544 problem.

Bucket two: traits that need a risk file

Age, gender, marital status, geographic location, and disability sit in a different sentence. Texas does not pretend a 17-year-old and a 45-year-old have the same crash frequency. It does not pretend a frame house on the hail corridor costs the same to rebuild as a masonry house two counties over. The Consumer Bill of Rights says the company cannot use those traits unless the difference is justified by actual or anticipated loss experience.

Translated: the carrier needs actuarial or underwriting support that is reasonably related to losses. “We just don’t like that part of town” is not a filing. “This territory’s theft and water-loss frequency is X versus Y, and here is the relativities page we filed” is how rating territories survive review.

Same idea for disability. A company cannot refuse you because you use a wheelchair. It can rate or restrict a risk if a medical or functional fact changes the chance of a claim — and it can show that. The burden is on the company, not on you to guess the model.

Marital status has extra footnotes. Insurers may still use married vs. single when they define who counts as a dependent on a health or group form. Title insurance can still ask about homestead and community-property rights. And as of September 1, 2025, Insurance Code §544.002(d) stops a company from treating a widowed person worse than a married person on continuation, limits, or rate just because a spouse died. That was a real-world gap. The legislature closed it.

Same class, same hazard

The third bullet is the equal-treatment rule. If you and another person are in the same rating class and present essentially the same hazard, the company does not get a private surcharge for you. If the difference is real — more tickets, a prior water loss, a roof past the carrier’s age cap, a lapse — the company can price that difference. If the difference is “we decided not to,” and you can show economic harm, the Bill of Rights points to a private suit in Travis County district court, with fees on the table and extra damages if the violation was knowing.

That is not a small-claims vent. It is also not a substitute for shopping. Most people who are overcharged relative to a cleaner risk are not in court. They are at a second independent agent getting a second set of relativities.

Credit scores: allowed, regulated, never the only reason

Texas lets personal-auto and homeowners insurers use an insurance credit score — a model built from credit-file ingredients to predict insurance losses, not to decide whether you get a mortgage. Chapter 559 and 28 TAC Chapter 5, Subchapter U police that use. TDI’s own consumer page is blunt: a company may use credit when it decides whether to sell a policy and what to charge. It may not refuse, cancel, or nonrenew solely on credit without some other independent underwriting factor.

That is the sentence people flatten into “they can’t use credit.” They can. They cannot use it as the entire door.

Other Chapter 559 rules that actually matter when you open a denial letter:

• The score cannot be built from factors that are themselves unfair discrimination.
• The company cannot punish you just because you do not have a credit card, unless some other independent factor is in the file.
• No credit file at all is not an automatic “worst tier.” The carrier must treat you as neutral, drop credit from the decision, or show actuarial support that “thin file” predicts worse losses.
• Insurance-related inquiries, inquiries you did not initiate, and medical-collection accounts coded as medical cannot be used as negative factors.
• If credit played a role in an adverse action, you get notice within 30 days — not the lazy phrase “poor credit.” The notice has to name up to four real factors, name the credit bureau, and tell you that you can pull a free report and dispute errors. Vague adjectives fail the statute.
• Models used for insurance scoring must be filed with TDI. You can request a company’s model through an open-records request.
• Life events such as divorce, a temporary job loss, identity theft, and similar shocks can entitle you to an exception. Ask in writing. The company then has to ignore the damaged slice of the file or treat you as neutral on that event.

Credit still moves real dollars. A published snapshot of Texas minimum-liability auto rates showed a clean driver with strong credit near $682 a year and the same clean driver with poor credit near $1,111 — same limits, different score. That spread is legal if credit is not the only underwriting input. It is also why you should read how insurance scores work in Texas before you assume the premium is “just the car.” The same idea shows up in liability-only auto pricing.

What companies can still use — legally

None of this makes Texas a “rating is illegal” state. Auto underwriters still look at the motor vehicle record, at-fault crashes, DUI, how far you commute, the vehicle itself, and prior lapses. Home underwriters still look at roof age, construction type, claims on the address, replacement cost, dogs and pools, and whether you live there. TDI says a company cannot turn you down just because a house is old or inexpensive — but it can charge more. After a policy is issued, the company generally has a window (commonly 60 days) to finish underwriting and adjust or cancel if the application was wrong.

Myths fill the gaps. Red paint does not have a statute. Credit does. Age does, with actuarial support. We keep a longer list in red cars and other Texas auto insurance myths.

Geography without redlining theater

“Geographic location” is on the protected-unless-justified list because Texas has a history of neighborhoods being treated as untouchable. Territory rating is still how property and auto insurance works. Hail, theft, flood-adjacent rebuild cost, and fire protection class are location facts. A blanket “we don’t write that ZIP” with no loss story is the fact pattern TDI cares about. A filed territory plan with loss costs is not the same fact pattern.

If admitted carriers will not write the house at all, Texas has a residual market — the FAIR Plan for many homes, TAIPA for minimum auto after two declinations. Residual markets are not a prize. They are the floor when the voluntary market walks away. Use them, then keep shopping the voluntary market.

What to do when you think the rule was broken

1. Get the decision in writing. “We declined you” is not a reason. Credit adverse-action notices have statutory content. Cancellation and nonrenewal notices have their own Chapter 551 clocks — auto nonrenewal generally needs 60 days.
2. Ask which underwriting guideline or rating factor applied. You are allowed to know whether it was credit plus tickets, roof age, a named-driver issue, or something that sounds like a protected class.
3. Pull your credit reports and dispute junk. Medical collections coded as medical should not be a negative insurance-score factor.
4. Shop the same risk with an independent agent. Different carriers weight credit, territory, and accidents differently. Rights do not require you to stay and suffer.
5. File with TDI if the conduct looks like prohibited discrimination, a credit-only denial, or a missing notice. TDI’s Help Line is 800-252-3439. The complaint path is in how to file a complaint against a Texas insurance company.

TDI can police the Code. It cannot force a company to pay a claim that the policy does not cover, and it cannot referee who caused your wreck. Those are contract and court questions. Bring the right fight to the right desk.

How this shows up on a real quote

Two neighbors, same block, same Honda. One is 19 and uninsured for six months. The other is 42 with a paid-up policy and a thin but clean credit file. The teenager’s higher premium is usually age plus lapse plus inexperience — bucket-two traits with loss data behind them. The 42-year-old cannot be refused solely because the score is thin. The teenager cannot be refused because of race. The 42-year-old can still be rated for a prior water claim on the house. All of those sentences can be true at once. That is the point of splitting the statute into buckets instead of a slogan.

Raise your liability above 30/60/25 because a lawsuit is not a civil-rights issue. It is a limits issue. See what insurance limits actually do. If you are leaving a carrier, do it without a lapse. The how-to is in how to switch auto insurance in Texas.

Keep the piece of paper they already owe you

Every personal auto and homeowners policy is supposed to arrive with a Consumer Bill of Rights. Read the discrimination page and the credit page before you argue with a call-center script. The script is not the Code. Chapter 544.002, Chapter 559.052 through 559.054, and the TDI credit-scoring page are the Code. Use them in that order: what they cannot consider at all, what they can consider only with loss support, how they must treat people in the same class, and the extra rails around credit.

Your right in Texas is not a guaranteed cheap policy. It is a guaranteed set of reasons. Make the company use one of the legal ones — in writing — and then decide whether to fight, shop, or both.