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Asking Questions About a Potential Claim can Raise Auto Insurance Rates in Texas

Written by Tom Crosley
Car Accidents, Texas Law, Vehicle Wrecks

Texans who call their insurance company to ask about potentially filing an auto insurance claim could see their rates significantly increase. That’s right—not filing a claim—merely asking a question—could raise your rates under the current law. As it turns out, there’s a little-known provision in the Texas law that allows insurance companies to raise insurance rates without a claim having ever been filed.

In 2013, Texas legislators passed a law making it illegal for individuals who’ve asked questions about their homeowners policies to be penalized for doing so. Initially, there was also language in the bill that provided equal protection for Texans who inquired about potential auto insurance claims. After intense pressure from lobbyists, however, this portion of the bill was inconspicuously removed.

State Senator Kirk Watson wrote the bill and is well aware of the potential for unfair rate hiking as a result of compromising the original, comprehensive nature of the protections. He fought to preserve the overall integrity of the bill but felt that it never would have passed with the language protecting curious motorists. Said Watson, “This ought to be a non-controversial item.”[1]

As for the legislature, they didn’t have a lot to say in defense of their position, other than a hedging non-commitment about assessing every possible variable to “accurately assess risks.” They did offer this little, Orwellian nugget, however: “Limiting the types of information that insurance companies can take into account could hinder operations and unfairly shift premium costs among policyholders.”[1] By this logic, perhaps we should be volunteering information about our political leanings, religious beliefs, sexual habits, and all kinds of other personal information to help insurance companies “accurately assess risks” and arbitrarily raise our rates.

Unfortunately, the language of the bill (or rather the lack thereof) is executing the insurance lobbyists’ intended purpose perfectly. One man in Texas had his truck slip out of gear and smash into his neighbor’s wall. This man asked his insurance agent a few basic questions but never sought to file a claim, instead settling the matter with his neighbor without involving any other parties. Still, his insurance company turned his phone call inquiry into an actual claim even though no money was ever dispersed. Imagine his surprise when it was time to renew his auto insurance policy and he was alarmingly hit with an increase of $200 annually to keep his car on the road. Neither the man nor his neighbor ever received a penny for the accident, yet he was told that he had filed a $2,500 claim and that the $200 surcharge would last for another five years adding up to a grand total of $1,000 for a claim he never actually filed and that didn’t require the insurance company to pay a dime.

This exploitation works because of the bill’s lack of concrete protections, the lack of transparency in the legislative process, the muddled, equivocal messages coming from the legislature, and the public’s general apathy. To be fair to the public, though, the Texas State Legislature chose not to be forthright in passing this bill or discussing it after the fact. If they had, there’s no way this bill would still be on the books today. The implications of its existence are too staggering. Namely, this bill allows insurance companies to keep their policyholders in the dark through fear-mongering. After all, who in their right mind would ask even the most seemingly innocent question of their auto insurance agent if they knew that doing so would result in an increase to their premiums?

Since when did asking questions of once-trusted advisors become tantamount to asserting a definitive claim? If we can’t even consult our insurance agents with questions about our policies, who can we turn to? Thankfully, Senator Watson says that he plans to attempt to change the law next year, but until then, don’t ask—don’t pay.

The culture of silence continues to prevail, but it doesn’t have to be this way. Write, email, or call Senator Watson at the address or phone number listed below and encourage him to keep up the good fight against big insurance and their lobbyists in Austin. You should also contact your state senator and representative to let them know you’ve taken a keen interest in this issue and that your future voting patterns will depend on their action.

Senator Kirk Watson
PO Box 12068
Austin, TX, 78711
Email: [email protected]
Phone: 512-463-0114


Lieber, Dave. (2014). Watchdog: Just a question can raise car insurance premium. Dallas News. Retrieved from

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