Enough to Hang Your Hat On

Abstract

Texas law is currently silent on the issue of whether insurance companies may sell insurance policies that require policyholders to bring coverage disputes to an arbitrator rather than the courts. As incentives increase for insurance companies to avoid costly litigation and for consumers to cut ever- increasing premiums, this creates a situation where a hasty, ill-considered proposal to allow such policy terms could shake the insurance market and public policy in the state for years to come. Rather than taking a reactive position, the Texas legislature should work with the Department of Insurance and stake- holders to affirmatively decide: (1) whether to allow such policies at all and, if so, (2) to create a robust legal framework that companies and consumers can both benefit from and rely upon. Other countries, such as the United Kingdom, have well-established frameworks in place that can be instructive, as University of Minnesota Law School professor Daniel Schwarcz has argued. Ultimately though, Texas must determine for itself what policy will suit such a vast and diverse state, particularly given its extreme weather. Texas should consider establishing an independent body to assist in insurance dispute resolution and to promote transparency. This Comment lays out the case for doing so: better outcomes, better insurance, and better access to justice.