Insurance Decisions for Texas School Districts
Decisions about insurance can be some of the most complex and important decisions that a school district’s governing body will make. Texas law requires school districts to carry certain types of coverage, including a workers’ compensation policy, an employee health plan, and certain minimum liability insurance for district vehicles. Many districts elect to purchase several additional types of coverage, but there are also types of coverage that state law prohibits school districts from purchasing.
Insurance provides financial protection in the event of a loss resulting from a covered peril. Insurance can protect a school district’s students and employees in the event of sickness or injury, and the district as a whole from lawsuits and property damage.
The first step in applying for any type of coverage is a process called “underwriting.” During this process, the insurer will assess the value of the items to be insured and the potential risk of a claim of loss, damage, or injury. These factors, combined with the level of coverage provided, will determine the rate the carrier will charge. In general, the greater the value of the thing insured and the greater the risk of the claim, the higher the rate will be.
A carrier may determine that certain risks are too high and decline to issue coverage entirely or only issue coverage on the condition that certain items or causes of loss are excluded from the policy. Most policies will contain exclusions for some causes of loss. It is important to understand your policy and what it does and does not cover.
Almost every type of policy will contain a provision for deductible amounts. A deductible is the amount the policyholder must pay out of pocket toward a loss before the insurer will begin to pay. For example, an auto policy may contain a $1,000 deductible for collision damage. This means the district would have to pay the first $1,000 of the cost of vehicle repair or replacement in any collision claim. The insurance company would then pay the remainder of the costs.
Most policies also contain a provision for limitation of coverage. This is the maximum amount the insurance company is liable for in any covered loss. The company will not pay the balance of claims exceeding this amount. For example, an auto liability policy may have a $25,000 limitation of coverage for property damage liability. If an insured driver causes an accident resulting in $30,000 in property damage, the insurance company would contribute $25,000 for the loss. The school district would then be liable for the remaining $5,000 of the loss.
A policy with a higher deductible will generally have a lower premium because the district is accepting a greater share of the financial responsibility for a loss. Higher limitation of coverage amounts will generally result in a higher premium because the maximum amount the insurer could be liable for is greater.
Certain policies that have very high deductibles are often referred to as self-insured retention plans. Under such a policy, the district accepts financial responsibility for the value of most anticipated losses, essentially acting as its own insurer. The purpose of the retention policy is to protect the district from an unexpectedly large number of claims, or an unlikely truly catastrophic claim that could be an extreme financial burden. Premiums for retention policies are generally substantially lower than of those of policies with standard-level deductibles.
The risks covered by a policy, deductible amounts, and limitation of coverage amounts can all be negotiated with a carrier to arrive at a premium a district can afford. A district should be careful of purchasing coverage at too low a premium because it likely won’t provide the level of coverage the district needs.
A school district should generally only purchase insurance coverage within the framework of a formal risk management process. Such a process might include distinct phases to
- identify potential risks and assess the consequences should they occur
- create a solution plan to mitigate the risk and possibly buy insurance protection if it cannot be eliminated completely
- implement the plan
- monitor the plan’s progress and periodically reassess.
Legal Authority to Purchase Insurance
Purchasing insurance can be a significant expense. District purchases valued at $25,000 or more in the aggregate for a 12-month period are governed by the Texas Education Code (TEC). The code requires that such purchases undergo a competitive bidding process in accordance with state rules.
The Texas Education Agency (TEA) offers a Financial Accountability System Resource Guide that outlines the purchasing process in detail. You may obtain a copy by calling TEA or visiting its website
Required, Permitted, and Prohibited Coverages
Texas law requires school districts to maintain the following coverages:
- health care coverage for full-time school district employees that is at least comparable to the coverage offered to state of Texas employees
- workers’ compensation insurance to cover workers who suffer work-related injuries or illnesses
- medical liability insurance to cover volunteer physicians and registered nurses who administer treatment or medication to students
- minimum automobile liability insurance, which pays other people’s expenses for accidents caused by drivers covered under the district’s policy.
Districts may choose to purchase any of the following coverages:
- Life insurance and annuities to allow employees to provide for beneficiaries when they die or save for retirement or other purposes
- Commercial property insurance to protect against damage to district property caused by fire, windstorm, lightning, or other covered perils. Other property-related coverages that typically require the issuance of a separate policy include crime, and windstorm insurance for districts in coastal areas.
- General liability insurance to protect against wrongful acts or omissions, or the negligence of employees resulting in bodily injury or property damage. Volunteers may be included.
- Optional auto coverage. Collision and comprehensive auto insurance to protect district owned or regularly used vehicles from accidents in which the driver is at fault and nontraffic-related damage such as theft, hail or fire. Towing and labor coverage pays towing charges when a car can’t be driven.
School districts are prohibited from purchasing the following automobile coverages:
- Medical payments coverage pays medical and funeral expenses of injured occupants of the insured’s vehicle, regardless of who’s at fault
- Personal injury protection (PIP) coverage pays the same as medical payments coverage, plus 80 percent of an occupant’s lost income as a result of an accident
- Uninsured/underinsured motorist coverage pays expenses incurred by a vehicle owner or occupants as a result of an accident that is the fault of another driver without insurance or without sufficient insurance
The Texas Attorney General’s Office has determined that providing these coverages at the expense of the school district would be a violation of the Texas Constitution.
Health Care Coverage
The Texas Education Code requires school districts to make health care coverage available to full-time employees. The coverage must be comparable to the coverage offered to state of Texas employees.
State employees are covered through a health plan administered by the Employee Retirement System (ERS). For coverage details, visit the ERS website
School districts can provide employee health coverage several ways, including:
- participating in the TRS-ActiveCare plan sponsored by the Teacher Retirement System (TRS)
- contracting directly with a private insurance company or health maintenance organization (HMO)
- participating in a health coverage risk pool
- self-funding a health care plan using the district’s own financial resources. Districts that self fund accept the full risk of coverage and responsibility of paying claims. State law requires self-funding districts to purchase “stop-loss” insurance to cover any catastrophic health care claims that may exceed its financial resources.
TRS-ActiveCare is the state-authorized health plan that assists districts with providing coverage for full-time and part-time employees. The plan is administered by the Teacher Retirement System (TRS). TRS-ActiveCare only covers active district employees; retirees are covered by the TRS-sponsored TRS-Care.
Districts with fewer than 500 employees are required to offer the TRS-ActiveCare plan as an employee benefit. These districts may also elect to offer alternative supplemental health plans. Districts with more than 500 employees are not required to offer TRS-ActiveCare, although most do. About 89 percent of all Texas districts are now participating in the plan.
TRS-ActiveCare is a managed PPO indemnity plan, meaning participants can use any health care provider they choose, but they will pay less for using providers within the plan’s approved network. Plan participants choose between four levels of coverage, ranging from comprehensive to catastrophic. The comprehensive coverage provides health benefits that are comparable to those offered to state employees. The catastrophic coverage pays only serious medical expenses, but will cost the employee significantly less in premiums. None of the four TRS-ActiveCare plans include benefits for dental or vision services.
All Texas school districts are required to contribute at least $150 per month for every employee who is a TRS member, regardless of whether a district participates in TRS-ActiveCare. Districts may elect to pay more to decrease the amount employees pay. The state of Texas further contributes $75 per month toward active employee health coverage. The remainder of the cost of coverage is paid by the district and plan participants. The state and district contributions are typically sufficient to pay most or all of coverage costs for employees choosing the higher deductible plans.
Districts aren’t required to contribute in TRS-ActiveCare for TRS retirees who have returned to work at the school. TRS retirees maintain their eligibility for TRS-Care, which is funded by the state, districts, active employees, and plan participants.
Blue Cross Blue Shield of Texas (BCBSTX) is the managed care company appointed to administer TRS-ActiveCare. BCBSTX invoices districts directly for the monthly premiums that include the district’s $150 per employee and the state’s contribution. Districts that are unable to meet the obligation may receive financial assistance from the state.
To participate in TRS-ActiveCare, a district must apply with TRS at least six months prior to the effective date of their participation. For more information about TRS-ActiveCare, call TRS or visit its website
397-6446 in Austin
Visit the BCBSTX website for an explanation of TRS health plan benefits
Indemnity vs. Managed Care Coverage
The two primary approaches to providing a health plan are typically called indemnity coverage and managed care. Any health plan a district adopts will be either strictly one or the other, or a type of plan that combines various features of the two.
In general, indemnity coverage offers greater freedom of choice in obtaining health services but may cost more, whereas managed care has more restrictive service options but often costs less. A district may elect to offer multiple health plans and allow employees to decide which type of coverage best fits their individual circumstances.
Insurance companies provide and administer indemnity plans. They are what many people think of as traditional health insurance. An indemnity health plan will cover a specified portion of the cost of services of any physician, provider, or hospital the consumer chooses as long as the care is medically necessary and consistent with the terms of the policy. The insured plan member will pay a certain portion of the costs of services as coinsurance. A common arrangement is than an insurer pays 80 percent of costs and the plan member pays 20 percent. Different plans may require a proportionately higher or lower contribution from individual plan members.
Managed care plans typically cost less than indemnity plans covering comparable conditions and services. Managed care plans achieve savings by contracting directly with physicians, hospitals, and providers for services at pre-negotiated rates. Either an insurance company or an HMO can provide and administer a managed care plan.
HMO plan members are restricted to receiving health services only from providers within the HMO’s network, except in medical emergencies or certain other circumstances. Other types of managed care plans allow members to go outside the network for services, but the plan member must pay more out-of-pocket to use non-network providers.
HMO plan enrollees are typically required to select a primary care physician (PCP) as a condition of membership. This doctor becomes the supervisor of the individual’s medical care and provides referrals to other providers.
Preferred provider organization (PPO) plans and point of service (POS) plans combine features of both managed care and indemnity coverage. Under these plans, pre-approval for services from a primary care physician is not required, and members may use any provider they choose. Both types of plans utilize managed care networks, but members typically have less out-of-pocket costs if they use providers in their plan’s network.
Cafeteria Health Plans
Another option for school districts is to offer health coverage as part of a cafeteria plan. Also sometimes called flexible benefit plans or flex plans, cafeteria plans are a type of financial instrument governed by the United States Internal Revenue Code. The typical cafeteria plan provides health care coverage and may offer certain other benefits, such as a dental plan, life insurance policy, and a medical flexible spending account.
Cafeteria plans have significant tax advantages to both employers and employees. Generally, any employer contributions to the plan are tax deductible and are not subject to federal Social Security and unemployment taxes.
Cafeteria plans allow participating employees to pay for many, if not all, of their health-related expenses with pre-tax income. This means a certain amount for health care costs is deducted from their paychecks before income tax is applied. The money may be used to pay for health plan premiums, copays, deductibles, and out-of-pocket health-related expenses that are not covered by a health plan. Because the money is not taxed before it is spent, a cafeteria plan can extend an employee’s purchasing power.
Cafeteria plans are so named because employees select the benefits they want from the plan’s offerings. For example, the district may adopt a cafeteria plan that offers the choice of PPO or HMO health coverage, a dental plan, a flexible spending account, and a life insurance policy. An employee may elect to receive any, all, or none of the benefits,. Employees who choose more benefits generally contribute more toward the plan costs.
There are four main types of cafeteria plans:
- Pre-tax conversion plan. Employees are covered by a medical plan to which they contribute some or all of the cost of coverage. Instead of the employee contributions being after-tax, the employee contributions are converted to pre-tax by complying with the tax laws for cafeteria plans.
- Multiple option pre-tax conversion plan. Employees may select an indemnity plan and one or more HMOs or PPOs that require differing amounts of employee contributions. If the program complies with tax laws, employee contributions to the selected plan will be pre-tax rather than after-tax.
- Medical plan plus flexible spending account. In addition to being covered by a medical plan, the employer allows participants to establish a medical flexible spending account. In most cases, employees make contributions to a flexible spending account on a pre-tax salary reduction basis. The amounts credited to a flexible spending account are then used to pay costs not covered by the medical plan, such as deductibles, co-insurance amounts, or noncovered services. In addition, the employer can provide an option to have salary reduction amounts contributed to a dependent care flexible spending account.
- Employer credit cafeteria plan. An employer provides the employee a specified number of credits, which the employee can spend on different employee benefit plans or contribute to a flexible spending account. Usually, there are sufficient employer credits for an employee to choose a low-cost medical plan and a base amount of life insurance coverage without requiring the employee to contribute any own money. To the extent that the employee chooses a more costly benefit package, he or she will have to make contributions, usually through a pre-tax conversion feature.
Cafeteria plan participants are required to declare annually which cafeteria plan benefits they will accept and, in the case of flexible spending accounts, the amount of income they will allocate. A prorated portion of the annual employee cost of all benefits is then automatically deducted from the employee’s paycheck. Generally, it is not possible for an employee to alter his or her declared allocation during the course of each plan year.
It’s important for both the district and its employees to be aware of one stipulation of cafeteria plan flexible spending accounts known as the use-it-or-lose-it rule. Under the rule, the balance of an employee’s payroll allocation does not roll over from one plan year to the next. This means that if an employee chooses an annual allocation of $1,000 toward the cafeteria plan, but only spends $800 toward applicable health expenses during the plan year, the remaining balance of $200 – which has already been automatically deducted from the employee’s paycheck – is nonrefundable. The law does provide a two-and-a-half month grace period during which employees are still allowed to spend any excess allocation. After the grace period, any remaining balance reverts to the district.
To prevent abuse of cafeteria plans as a way to avoid federal income tax, the law prohibits an employer from returning the excess allocation it receives to its employees. Doing so could result in the revocation of the employer’s right to offer a cafeteria plan.
Most employers that offer a cafeteria plan contract with a third party administrator (TPA) to administer the plan’s benefits and eligibility rules. For more information about Texas-licensed TPAs, call the Texas Department of Insurance (TDI) Consumer Help Line or visit our website
463-6515 in Austin
A district may also elect to self-administer its TPA plan, which will save on contract fees. A district that is considering self-administering a cafeteria plan should consult an accountant or financial adviser.
Self-funding Health Coverage
Rather than contracting with an insurer, a district may elect to self-fund its employee health coverage. The district accepts the full financial risk of coverage and paying claims using its own funds. Self-funding can be a way to save money by avoiding the administrative overhead and company profit that are factored into the price of a private-sector plan.
Many districts contract with a third party administrator (TPA) to administer the day-to-day operations of the self-funded plan. This incurs some additional cost, but it is generally less expensive than purchasing coverage. A TPA may either be an insurance company or a separate company that administers self-funded plans exclusively. The TPA manages administrative functions such as claim processing, collecting employee premiums and managing enrollment. The TPA, however, assumes no risk of coverage. TPAs must maintain a valid TPA license to legally operate. To verify a TPA’s license status, call TDI’s Consumer Help Line or visit the TDI website.
It is important for a self-funding district to be certain it has sufficient resources to pay health claims that arise. State law requires self-funding districts to purchase stop-loss coverage that pays the balance of claims that exceed a certain dollar amount. This guarantees that plan members’ claims will be paid in the event of a catastrophic illness or injury.
Most self-funded health plans are regulated by the Employee Benefits Security Administration (EBSA) of the U.S. Department of Labor according to terms of the Employee Retirement Income Security Act (ERISA). TDI has minimal regulatory authority in matters concerning ERISA self-funded plans. TDI has no authority of certain self-funded plans that are exempt from ERISA statutes.
Districts considering self funding are advised to consult legal counsel to be sure they understand the extent of the legal responsibilities involved, particularly COBRA and HIPAA.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal statute that provides certain former employees, retirees, spouses, former spouses, and dependent children with the right to temporarily continue health plan membership after losing their coverage eligibility as a result of certain qualifying events.
COBRA allows qualifying plan members to continue coverage for up to 18 months after losing plan eligibility, and their spouses and dependent children to continue coverage for up to 36 months. Texas law further extends the continuation period after COBRA expires. A district may be required to continue administering coverage for former employees for up to two years, and up to three-and-a-half years for former employees’ spouses and dependent children.
Employers must notify employees of their right to continue their health coverage within 30 days of the date the employee’s coverage eligibility ends. Employees then have 60 days to elect to continue their health coverage. If the health plan is through an insurance company or HMO, any subsequent administrative responsibilities are handled by the company or HMO. If the district self-funds its plan, these tasks become the responsibility of the school district. The district must continue to process and pay the claims of plan members who elect to continue their coverage. Districts are not required to continue contributing a share of health plan costs for members who elect to continue coverage after leaving employment. During the continuation period, the full amount of the plan premium becomes the member’s obligation.
The Health Insurance Portability and Accountability Act (HIPAA) imposes many responsibilities on health plan administrators. Self-funding districts should consult at least annually with legal counsel to ensure compliance with HIPAA requirements. The following are several key aspects of the law:
- Patients’ right to privacy of confidential medical information, including claims records and other information the district may maintain in the course of self-funding health coverage.
- Patients’ right to portability of coverage. HIPAA sets the terms under which districts must apply a new plan member’s previous health coverage to any preexisting condition rules of the district’s plan. Portability provisions further outline the district’s obligation to certify and keep a record of the coverage of former plan members so that they may receive credit for their coverage under the district’s plan toward any new plan’s preexisting condition waiting period.
- An administrative simplification mandate establishing certain requirements for the standardization and electronic delivery of health information, including claims information. The simplification rules work to improve efficiency across the health care system by facilitating better information-sharing among providers and between providers and plan administrators.
Penalties for HIPAA noncompliance can be severe, up to $25,000 for multiple violations of the same provision within a calendar year and up to $250,000 and/or imprisonment up to 10 years for knowingly misusing a person’s identifiable health information.
The primary regulators of HIPAA law are the Centers for Medicaid and Medicare Services (CMS), an agency of the U.S. Department of Health and Human Services. CMS has developed a website specifically to assist health plan administrators with HIPAA compliance
Certain health-related services are often not covered by standard health policies. Districts may elect to offer supplemental plans to extend coverage beyond the statutory minimum requirements. However, any supplemental plans must be offered on an “opt in” basis, meaning employees may not be required to enroll in the coverages as a condition of membership in the primary plan. Following are some common types of supplemental coverages:
- Vision or dental coverages typically provide limited benefits for services. Insurance companies and HMOs – or dental maintenance organizations (DMOs) – offer this coverage.
- Hospital indemnity pays up to a specified dollar amount for each day the covered person is in the hospital. The coverage can be beneficial for people with extended illnesses because many health plans provide for only limited hospital stays. Insurance companies offer this coverage.
- Disability income protection provides payments for up to a specified period to employees who cannot work because of sickness or accident. Insurance companies offer this coverage.
Employee Supplemental Compensation for Health Care
The Texas Administrative Code (TAC) provides non-administrative school employees with an additional amount of supplemental compensation to apply toward health-related costs, such as plan premiums or personal health savings accounts.
The amount of supplemental compensation, also known as pass through funding, each employee receives is based on the employee’s job function and hours worked. If an employee uses the money toward health coverage expenses or a health savings, the pass through funding is awarded tax free. If an employee does not spend the money on health expenses or has some amount remaining after these expenses, the remainder of the pass through funding is considered taxable income.
TEA distributes supplemental compensation in a monthly lump sum to school districts whose employees are members of TRS. It is the district’s responsibility to distribute the correct allocation to each employee and withhold taxes for any amount considered income.
Supplemental compensation dollars are awarded according to the following formula:
- Part-time employees, defined as employees working less than 30 hours per week, receive $250 annually ($20.83 per month).
- Full-time “nonprofessional-level” employees receive $500 annually ($41.66 per month).
- Full-time “professional employees” are excluded from receiving any supplemental compensation. Professional employee status is determined by whether or not more than 50 percent of an individual’s work hours are reported under certain role identifications using the Public Education Information Management System. The list is somewhat extensive but generally includes employees whose primary functions are administrative or senior level staff support, and not teaching, counseling or other job at the level of an individual school.
People new to school employment and those who are returning to employment after withdrawing service credit are not eligible for TRS membership during their first 90 days of service. Accordingly, these employees are also ineligible for pass-through funding until after their 90th day of employment. The limitation does not apply to current employees transferring to a different district.
Coverage Rights and Protections
State and federal laws contain numerous protections for consumers with individual and group health plans. Following are three important protections for school districts:
- Continuity of coverage. A health carrier may not refuse to renew a district’s existing health plan while it continues to offer the plan to other employers in the same market, except for reasons of fraud, nonpayment, or violation of certain health plan terms.
A carrier may discontinue offering a plan in the market altogether, but it must allow the district to enroll in any other plan it offers in that market. If a company decides to withdraw from a market, it must provide the district and the commissioner of insurance 180 days’ notice before non-renewal of coverage. Carriers that withdraw completely are prohibited from doing business in that market for five years.
- Portability of coverage. State and federal laws require health carriers to allow enrollees to apply the time they maintained coverage under another creditable health plan during the previous year to their new pre-existing condition exclusion period. For example, an individual with no prior coverage who has a preexisting condition who joins a plan with a 12-month preexisting condition exclusion period would have to wait 12 months before the plan will cover any treatment for the condition. If the same individual was previously enrolled in another health plan for eight months prior to joining the new plan, that time would apply to the new plan’s waiting limit. Therefore, he or she would only have to wait four months before preexisting conditions were covered (12 - 8 = 4).
An individual with previous coverage during the full 12 months of would not be subject to any preexisting condition exclusion period. A preexisting condition is defined as any condition for which an individual has received medical advice, care, or treatment during the six months prior to joining a health plan. By law, employee health carriers may delay coverage of preexisting conditions for up to 12 months, even though the policy normally covers the conditions.
- Preexisting condition limitations. State and federal law prohibits employer health plans from treating pregnancy or conditions revealed through genetic information as preexisting conditions.
Workers’ Compensation Insurance
Workers’ compensation insurance covers workers who suffer work-related injuries or illnesses. Although the coverage is not required for private-sector employers, it is mandatory for Texas school districts. State law also requires that any construction workers performing contract work on district property must have the coverage through their employer.
Districts may obtain workers’ compensation coverage in the following ways:
- Purchase a policy through a licensed insurance company. TDI’s Workers’ Compensation Rate Guide lists insurance companies selling the coverage and their phone numbers, and provides rate information.
- Self-insure. This means the district accepts the full financial risk of insurance and pays claims with its own funds. Because school districts are classified as a government entity, there is no state application process required to qualify as a self-insurer. A self-insuring district needs to be sure it has sufficient resources to pay all claims to avoid a budget shortfall that could result in an extreme financial burden.
- Enter an interlocal agreement with other “political subdivisions,” such as county and municipal districts, junior college districts, or other special districts. Interlocal agreements allow districts and other entities to pool their financial resources to obtain coverage from a private-sector insurer at a lower rate than they could obtain individually. The agreement could also take the form of a self-insurance pool administered by a risk management firm, school affiliated association, or other oversight body.
Medical Liability Insurance for Volunteer Health Professionals
Licensed physicians, registered nurses, or other eligible providers may volunteer to provide medical care or basic health screening services to a school district. Districts are required by law to perform some screening services, such as for dyslexia, abnormal spinal curvature, and vision and hearing disorders. Some districts provide students and employees with basic health services, and all districts are required to provide health-related services to students with special needs.
Generally, volunteers are immune from liability to the same extent as regular school district employees. Additionally, state law requires school districts to maintain liability insurance to cover volunteer health providers administering medication to students. No immunity exists for acts of intentional misconduct or gross negligence by volunteers.
The law does not require districts to purchase coverage for subcontracted health providers. Subcontractors generally carry their own liability coverage.
Health professionals who are directly employed by a district are largely protected from medical liability claims by the same governmental immunity statutes that apply to all district employees. Regular school district employees are immune from personal liability for related to the scope of their regular duties involving the use of employee discretion or judgment. Immunity doesn’t exist for negligence resulting in bodily injury to a student or for employees who use excessive force to discipline a student.
There are typically limits to liability damages. Public servants, including volunteers, are not personally liable for damages over $100,000 for certain actions brought under Texas law. This immunity exists only if personal injury, death, or other deprivation results from an act or omission within the scope of the volunteer's duties and the initial $100,000 of damages is covered by a governmental body's indemnification duty or by insurance coverage.
Minimum Auto Liability Insurance
State law requires districts to purchase minimum liability coverage for all owned, rented, or regularly used motor vehicles.
Liability coverage pays other people’s expenses for accidents caused by drivers covered by the district’s policy, up to the policy’s dollar limits. Expenses may include medical and funeral costs, lost wages, and compensation for pain and suffering; car repair or replacement costs; auto rental while the car is being repaired; and punitive damages awarded by a court.
The district itself is liable for any damages that exceed an auto policy’s coverage limits. Liability insurance with higher coverage limits can be purchased, although the premium will be higher. The liability of a school district is limited to money damages in a maximum amount of $100,000 per person for bodily injury, $300,000 per accident for bodily injury, and $100,000 per accident.
Life Insurance and Annuities
State law permits school districts to offer group life insurance coverage and annuities as part of an employee benefits package. Life insurance provides financial compensation to a covered person’s dependents, heirs, and loved ones when the individual dies. An annuity is a type of investment contract most often used to save for retirement that operates on many of the same financial principles of life insurance.
A district may pay the full cost of providing life insurance or annuities benefits, require employees who participate to pay the full cost, or share the cost with employees. Cost sharing is the most common arrangement. A district may also choose to extend availability of the benefits to employees’ spouses and dependent children. Typically employees pay a greater share of the cost for family members’ participation.
Group life insurance provides coverage to individual group members under a single master policy. The school district is the policyholder, but certificates are typically issued to the insured individuals. The insured lists beneficiaries in the certificate who are paid the death benefit when the insured dies. A school district or any other type of employer may not be a policy’s beneficiary unless the death benefit is used to fund a pension plan.
Group life coverage is always offered as one-year term insurance policy that participating employees must renew annually. Term life insurance is basic coverage that contains no other features than the death benefit that will be paid if the insured dies while the policy is in force.
A district must make group life coverage available to all employees or a class of employees equally. The class of employees must be defined by conditions of employment. For example, a district could make group life insurance available only to teachers, only to administrators, or only to those employees who have worked for the district for a particular number of years.
The amount of the death benefit the district offers a class of employees must be determined in a way that precludes individual or arbitrary selection. For example, the amount of the benefit could be
- an equal amount for all employees
- a multiple of an employee’s compensation (for example, twice the employee’s annual salary)
- a function of the employee’s position (a certain amount for teachers and a certain amount for administrators or support staff)
- a function of the employee’s length of service (for example, a certain dollar amount per year of service).
Group life coverage terminates upon nonrenewal of membership, termination of employment, or termination of membership in the class of employees for which the insurance is offered (as might happen in the case of promotion or reduction of number of hours worked). Upon termination of coverage, the insurance company must offer the individual the option to convert a group policy into an individual policy, without a requirement to provide evidence of insurability, such as health records or submitting to a medical exam. It is the district’s responsibility to notify employees of this option. Employees who choose to convert their terminated group coverage must apply for the individual coverage within 31 days. They must also pay the full cost of the individual coverage.
An annuity is a type of investment contract usually sold by an insurance company and sometimes sold by an investment firm that is backed by an insurance company. The contract holder, or annuitant, makes a lump sum payment or series of payments into a special investment fund managed by the company. After an accumulation period defined by the contract, the company pays a return on investment to the annuitant or beneficiary in a lump sum, regular series of payments, or other specified manner. Group annuities are often offered in a manner similar to group life insurance policies. Large employers or associations also often use annuities to fund qualified pension plans.
By law, annuities are tax-deferred investments, meaning purchasers pay no taxes on the money they pay into the contract, and any earnings of the annuity fund are not taxed as capital gains until they are actually paid out. This is the primary reason annuities are often used to provide for retirement. An individual can reduce the amount of taxes he or she pays now, and, when the annuity begins to provide a return some time in the future, pay taxes on that income from a lower tax bracket because the individual is no longer working.
Group annuities can be either allocated or unallocated. Under both arrangements, the contract holder (the school district in this case), owns the master policy.
In an allocated annuity, individual certificates are issued to participating employees who decide how their share of the annuity fund is distributed among a selection of investment options, such as stocks, bonds, commodities, or mutual funds. There are no guarantees of investment return, and certificate holders can even lose money if the selected investments perform poorly. Typically certificate holders are permitted to reallocate their share within the annuity a number of times per year at no charge. Allocated annuity members may also be allowed to withdraw some or all of their money early from the annuity fund before the scheduled payout date, although a significant financial penalty may apply.
In an unallocated annuity, no individual certificates are issued. The fund is entirely managed by the district or a specially established trust, and payouts can be made only under certain circumstances defined in the contract, such as an employee’s death, termination, or retirement. Most unallocated annuities guarantee a certain minimum rate of return.
The Internal Revenue Code permits tax-exempt organizations, including school districts, to establish a group annuity for the purpose of funding a qualified pension plan. Under this arrangement, the annuity contract holder becomes an IRC Section 403(b) trust established by an insurance company. Participating employees may contribute up to $9,500 annually to the plan, to be deducted automatically from salary before taxes. Members may withdraw some or all of their contribution before retirement. However, any withdrawal before age 59 ½ may result in a 10 percent tax penalty, unless it is made for reasons of retirement, separation from the job, disability, termination of the pension plan, or financial hardship as defined by the tax code.
Commercial Property Insurance
Commercial property insurance provides compensation for losses resulting from damage to school district buildings and contents and, in some cases, damage to property off premises. There are many types of commercial property policies, each protecting against specific losses. Understanding which losses a policy does and does not cover is extremely important because an insurer will generally not pay for a loss that is not specifically stated in the policy.
Commercial property policies are not standardized in Texas, meaning insurance companies are largely free to develop their own policies. As a result, there is great variety in the policies on the market. Differences between policies may be subtle, but they can be important. District officials should take care to fully understand the details and limitations of any commercial property policy before purchase.
Certain property-related losses that require a significant amount of additional risk assessment are typically not covered by insurers’ basic commercial property policies. Flooding is usually insured by the federal government and rarely included. Districts in coastal counties may also have difficulty obtaining windstorm protection in a basic policy. These special case coverages and others typically require separate policies.
Although commercial property insurance can be purchased in a stand-alone policy, commercial multi-peril (CMP) policies are a more popular insurance product. CMP policies combine more than one line of insurance, such as commercial property and general liability, into a single policy that can generally be purchased at a lower rate than purchasing the two separately. A CMP policy may also incorporate other coverages such as crime, glass, and certain high-value items.
Flood Insurance. Flooding can result in widespread, catastrophic damage beyond the ability of private companies to insure. Flood insurance in the United States is administered by the National Flood Insurance Program (NFIP). To qualify for government flood coverage, a district must reside within an NFIP participating community. These communities have adopted federal building and floodplain management laws aimed at reducing the likelihood of future flood damage.
Special flood hazard areas are high-risk areas within NFIP communities that are a more likely flood risk. NFIP requires all structures within these areas to have flood insurance by federal law. Even if a district has no property within a hazard area, a flood policy may be a good idea. About a quarter of all floods occur in areas designated as low-to-moderate risks.
For more information, contact an agent or call NFIP
1-888-FLOOD 29 (356-6329)
Windstorm and Hail Insurance. If a district is located in one of Texas’ 14 coastal counties or within certain areas of Harris County east of Highway 146, an insurer will exclude windstorm protection from its commercial property policies. For property owners in these areas, the Texas Windstorm Insurance Association (TWIA) is the insurer of last resort.
TWIA is a nonprofit risk pool whereby all property and casualty insurers in the state share the risk of windstorm damage to structures located in high-risk areas. Buildings constructed, repaired, or remodeled prior to January 1, 1988, are automatically eligible for TWIA coverage. Those constructed, repaired, or remodeled after that date are required to pass a state inspection and receive a Certificate of Compliance, Form WPI-8, before the windstorm and hail insurance coverage is issued through TWIA.
Provided that the district notifies its TDI Windstorm Inspection Field Office before construction or repairs have begun, a TDI inspector may be able to perform the inspection free of charge. If not, a Texas-licensed engineer appointed by the commissioner of insurance may perform inspections for a fee. The inspection must be scheduled while the work is being completed.
Detailed information about inspection requirements can be found in the windstorm section of the TDI website or by contacting TDI. Phone numbers for your local inspection field office are also provided on the TDI website.
After the structure passes inspection, contact TWIA to locate agents in your area
Off-premises Property. A commercial policy may or may not provide a limited amount of off-premises protection. A separate inland marine policy might be required to sufficiently cover more numerous or expensive items, such as musical instruments and audio-visual, theatrical, and sports equipment. Inland marine is a branch of coverage often used to cover belongings or non-real estate property.
Boiler and Machinery. Boilers, air conditioning units, compressors, steam cookers, and electric water heaters are examples of machinery that are typically covered by this type of policy. Coverage generally extends to both the specifically listed items and any subsequent losses resulting from damage to the item, as can occur in cases such as a boiler explosion or water heater leak.
Coverage against Crime. There are several types of policies that can protect a district from losses resulting from crime. Often these coverages can be incorporated into a single policy in the same manner as commercial property and general liability coverage. This coverage can be provided on a discovery or loss sustained basis.
- Discovery coverage pays for losses sustained at any time and discovered during the policy period or the extended reporting period. Loss sustained coverage, on the other hand, pays for losses sustained during the policy period and discovered during the policy period or extended reporting period.
- Loss of glass and money due to theft covers the loss of glass or money as a result of a break-in.
- Property other than money is a more limited form of coverage that does not include money or securities.
- Forgery or alteration protects the district against forgery or alteration of checks, drafts, promissory notes or other directions to pay.
- Theft, disappearance, and destruction coverage insures money, securities, and other property against loss on premises or in the custody of an employee or messenger while off the district’s premises.
- Public employee dishonesty specifically insures public or government entities, including school districts, against employee dishonesty involving public funds or property. There are two employee theft insuring agreements: one has a limit that applies regardless of the number of employees involved in the money, securities, or other property loss, and the other has a limit that is applicable to each employee.
Commercial Property Rates
Fire risk is typically the dominating factor that determines a commercial property policy’s premium rate. The following are the five main criteria used to evaluate a property’s fire risk:
- Construction materials. Buildings made of potentially combustible construction materials will likely warrant higher premiums, while those made of fire-resistant materials could earn a discount.
- Occupancy. The activity a building is used for, the amount of time it’s used, and the number of occupants determines this factor. Activities such as cooking or welding may be deemed an increased risk and raise the rate.
- Location. Buildings located in a city or town with good fire protection typically cost less to insure than buildings in rural areas with limited fire protection.
- Fire protection measures. Sprinklers, alarms, and fire extinguishers are required by law, but a system that exceeds minimum requirements may earn a discount.
- Exposure. Nearby hazards that increase the property’s fire risk.
Basic Types of Commercial Property Coverage
While there are no state requirements for coverages that a commercial property policy must contain, policies are usually described as falling into one of three categories:
- Basic form policies cover most common perils, such as damage caused by fire, lightning, windstorm, vehicles, aircraft, vandalism, and civil commotion.
- Broad form policies cover the basic perils, plus certain additional perils, which might include water damage, structural collapse, glass breakage, or damage from the weight of ice, sleet, or snow. Broad form policies issued by different insurers may provide different coverages. When purchasing a broad form policy, be sure it covers all of the district’s insurance needs.
- Special form policies are the most extensive of the three coverages, insuring against all perils except those specifically excluded from the policy. Common exclusions include flood, earth movement, war, nuclear disaster, wear and tear, and insects and vermin.
Most insurers offer endorsements or riders that enhance or amend a policy’s base coverage. Generally, endorsements increase premiums, but sometimes they can be negotiated for free from the insurance company. Some common commercial property endorsements that may benefit a school district are listed below:
- Business interruption reimburses for income, fees, or tuition lost when a covered peril prevents normal operations.
- Extra expense pays any added costs a district may incur resulting from the need to expedite the return to operations after a covered loss.
- Building occupied by the insured covers a building that is regularly used by the insured but not owned. This endorsement could be important if a building that the district leases or borrows is critical for operations, but the owner is uninsured or underinsured.
- Newly acquired or constructed buildings insures damage to any new district property that may occur before the structure is added to the main policy. An insurer will generally only cover losses to buildings specifically named in the policy. This endorsement typically stipulates an amount of time during which the insurance company must be notified of the acquisition, after which the endorsement does not apply.
- Portable classrooms while in transit covers portable classrooms or other transportable structures if they are damaged while being moved.
- Personal property of the insured off premises covers district property located off premises.
- Personal property of students and employees while at insured premises covers property at insured premises. Generally only property owned by the district is insured in the event of a loss unless this endorsement is included.
- Valuable papers assigns a value to records or other essential information that could be lost. Papers are typically covered to a limited extent by the base policy.
Required Performance and Payment Bonds
The Texas Government Code requires state and local government entities that make a public work contract with a prime contractor to furnish a performance bond when the contract is in excess of $100,000 and a payment bond when the contract is in excess of $25,000.
A performance bond guarantees that the principal will faithfully perform the terms and conditions of a written contract. In most cases performance bonds include a payment bond and a maintenance bond. A payment bond guarantees that the principal will pay for labor and materials used in connection with the written contract. A maintenance bond guarantees against defective workmanship or materials in connection with the written contract for a required period of time, normally one or two years.
While bonds are not technically insurance – in the event of a valid claim, the bond issuer will then seek recompensation by the contractor at fault – they do protect from potential loss.
The two types of liability insurance school districts purchase most often are general liability and educators legal liability, (ELL). General liability protects against bodily injury claims. ELL protects against charges such as harassment, discrimination, improper hiring and firing, and improper academic counseling.
Liability policy forms are not standard in Texas, meaning insurance companies are largely free to develop their own policies. District officials should ensure that they fully understand the details and limitations of any liability policy before purchase.
Although liability policies can be purchased stand-alone, most districts purchase CMP policies which incorporate liability coverage with crime, glass, and inland marine coverages.
General Liability Insurance
A general liability policy provides coverage when the insured entity becomes legally liable for bodily injury or property damage claims that occur on the insured’s premises or as a result of the insured’s operations off premises. A general liability policy will also generally cover contractual liability of the insured.
Most policies will exclude coverage for bodily injury or property damage caused by the use of aircraft, watercraft, automobiles, school buses, or the transportation of students. Liability claims for other than bodily injury or property damage may require ELL coverage.
The primary factor determining the premium rate for general liability coverage is the district’s average daily student attendance.
Because general liability insurance is not standardized in Texas, a district should review any policy carefully before purchase. In particular, a district should determine whether or not it covers
- medical payments for students and athletes
- trustees, board members, student teachers, and volunteers
- liability from the use of stadiums, outdoor grandstands, or bleachers
- liability from corporal punishment
- liability from incidental law enforcement activities.
In Texas, general liability policies may be written on an occurrence or claims-made basis. An occurrence policy covers claims arising from events occurring while the policy was in force, regardless of when the claim is first made. A claims-made policy covers claims reported during the policy term, provided the event occurred after the effective date of the first policy issued. An earlier retroactive date may be specified in the policy to cover acts occurring prior to the original effective date.
Under a claims-made policy, a claim is not covered if it is made in a policy year following the occurrence unless the claims-made coverage continues in force. If it does not, run-off coverage must be purchased to cover residual claims reported later. Claims-made policies are cheaper than occurrence policies for the first several years of coverage. This is because the potential for claims builds slowly as policy years accumulate.
Educators Legal Liability (ELL) Insurance
ELL covers a broad range of non-bodily injury and non-property damage claims against a school district. The coverage is also commonly known as school leaders errors and omissions, school board legal liability, or directors and officers liability insurance. An ELL policy covers a district’s employees, staff, board members, and the educational institution itself.
The rates for ELL insurance are primarily based on the number of employees, volunteers, and board members in the district.
The following are common liability claims an ELL policy can insure the district against:
- Employment-related allegations. These are the most common of all ELL claims and can include an educator’s denial of tenure, improper demotion, failure to promote, failure to hire, wrongful termination or breach of contract.
- Improper dismissal. Claims made by students dismissed from school for academic or disciplinary reasons.
- Improper career or academic counseling. Examples include claims that a career guidance counselor provided improper advice that resulted in problems finding a job or an academic counselor’s advice on taking a course that resulted in grade failure.
- Discrimination. Can include a broad range of issues, including wrongful termination, failure to hire, or failure to admit a student. The allegation stems from the charge that the improper action was made in violation of the state and federal law prohibiting discrimination or decision making on the grounds of race, color, creed, religion, gender, mental or physical disability, or national origin.
- Civil rights violation. Includes claims that a school policy or official violated an individual’s right of free speech, press, prayer, or other rights guaranteed under state and federal law. Discrimination claims can also usually be considered to be civil rights claims.
- Failure to protect and supervise. Claims that specific school policies or lack of policies were negligent in protecting or supervising students or educators. Such claims may include allegations of sexual abuse, molestation, or harassment.
- Improper policing or security. If a district employs a police officer whose primary employment is through a municipality, county, or other government entity, the officer’s professional liability coverage will likely not extend to moonlighting activities for the district. An ELL policy would therefore be needed to cover liability resulting from the officer’s acts. If a district contracts with a private security firm, however, the firm should maintain its own professional liability insurance. Because of various situations that could result in an inadvertent lack of coverage, districts are advised to specifically discuss ELL coverage for policing and security activity with their insurance agent.
In Texas, ELL policies are generally issued on a claims-made basis, meaning they only cover claims presented during the time the coverage is in force. This is different from general liability insurance that is usually sold on an occurrence basis, which covers claims events that occurred during the policy period, regardless of the amount of time after the effective date that the claim is actually presented.
Excess and Umbrella Coverage
Certain policies are also available to extend the coverage of a liability policy:
- Excess liability policies provide coverage for a liability loss that is above the policy limit of the primary liability insurance coverage. An excess liability policy may not provide broader coverage than the primary policy. An excess policy generally extends the limits of the primary insurance and can be written on a follow form basis to mirror coverage provided by the primary policy but for an additional limit of liability. An excess policy is a separate policy from the primary insurance coverage. Excess policies may be purchased as a stand-alone policy or can be combined as stand-alone coverage with other coverages provided by a commercial multi-peril policy.
- Umbrella policies protect a district in two ways. They extend the limits of a primary policy in the same manner as straight excess coverage and they pay claims that aren’t covered by the primary policy. Typically, this coverage is negotiated as a “self-insured retention” agreement with the insurance company, which is essentially blanket insurance with a very high deductible. The district accepts financial responsibility for uncovered losses up to a certain high dollar amount. In the event of a catastrophic loss not covered by the main policy that exceeds this amount, the umbrella insurance will pay. It is important to note that most umbrella policies contain certain exclusions for causes of loss for which the insurer will not pay.
The state of Texas is generally immune from liability and lawsuits under the doctrine of sovereign immunity. Courts have ruled this to mean state of Texas entities, including school districts, cannot be sued in Texas courts without the consent of the Legislature. In reality, immunity is a defense that a defendant can use and is not a bar to lawsuits. A court can accept the defense of immunity or reject it. A district should not depend on the doctrine of governmental immunity to protect it from lawsuits.
The Texas Tort Claims Act waives governmental immunity in the following circumstances:
- property damage, injury, or death arising from the “wrongful act or omission or the negligence of an employee acting within the scope of his or her employment”
- injury or death involving the “operation or use of a motor-driven vehicle or motor-driven equipment” if the employee would be personally liable to the claimant under Texas law
- injury or death caused by and the “condition or use of tangible personal property” if the governmental unit would be personally liable to the claimant under Texas law. (Personal property in this circumstance would mean property owned by the district.)
The Tort Claims Act establishes some limits on legal damage awards that may result from such liability, a fact the district may wish to consider when deciding the limits of liability to purchase. For local government entities other than municipalities, including school districts, liability for money damages is limited to $100,000 for each person, $300,000 for each single occurrence of bodily injury or death, and $100,000 for each single occurrence of injury or destruction of property.
If the district has purchased liability coverage, responsibility for defending the suit usually becomes the insurer’s responsibility, subject to policy coverage and exclusions.
Optional Auto Coverage
The following coverages may be added to a district’s commercial auto policy:
- Collision coverage pays to repair or replace the vehicle of the driver who is at fault in an accident. Payment is limited to the vehicle’s actual cash value, minus the deductible. Actual cash value is the market value of a similar vehicle before it was damaged.
- Comprehensive coverage pays the cost of repairing or replacing a car if it is stolen or damaged by fire, vandalism, hail, or another cause other than collision. Comprehensive coverage also pays for a rental car or other temporary transportation if a car is stolen. Payment is limited to the car’s actual cash value, minus the deductible.
- Towing and labor coverage pays towing charges when a car can’t be driven. It also pays labor charges, such as changing a tire, at the place where the vehicle broke down.
Shopping for Insurance
Most insurers sell their products through agents. Some insurers are direct writers but may require a district to utilize local agents. Districts may also choose to hire a third party, such as a consultant, to help them with their insurance purchases.
Before accepting services from an agent or consultant, request an action proposal and discuss fees and commissions. A proposal will provide a district with a starting point for the service bidding process.
An agent should
- evaluate a district’s individual needs
- explain coverages and their limitations
- ensure that a district purchases the proper coverage
- give a district personal attention in handling claims
A starting place when looking for an agent is to ask other school districts or businesses if they can recommend an agent. A district should shop around, compare rates from different companies, and find a local agent who will answer all of the district’s questions. Remember, not all agents write policies for the same companies.
Texas law requires agents to have a license from TDI before selling their products or services. To verify whether an agent is licensed, call TDI’s Consumer Help Line. You can also call the Consumer Help Line to learn a company’s or agent’s complaint index and to request a complaint form to file a complaint against a company or agent.
For more detailed information on what an agent’s license authorizes them to sell, call or write
Texas Department of Insurance
Agents Licensing Group
P.O. Box 149091
Austin, Texas 78714-9091
Following are some more helpful tips to help you shop for coverage:
- Obtain quotes from several companies.
- Consider higher deductibles for each coverage type. Generally, the higher the deductible, the lower the premium.
- Inquire about endorsements that change or add coverage. A district may need these for items and exposures that are not covered in standard policies.
- Remember the cheapest policy is not always the best. Inquire about an insurer’s track record for reliability, value, and customer service. Make sure the carrier is financially stable. You can learn the financial rating for licensed companies by an independent rating organization by calling TDI’s Consumer Help Line.
- Consult the district agent and the company for ways to reduce risk. Many companies offer customers risk-reduction programs that can help reduce risks and lower rates.
- Understand the district’s responsibilities in case of a claim and report all claims promptly and accurately.
- Inform the district’s agent promptly of any changes relating to insured vehicles, district property and employee health coverage.
- Confirm that contracts provide for ample notification of cancellation/non-renewal. Never cancel an old policy until appropriate replacement coverage is in force.
- Confirm all representations from an agent or insurance company in writing.
Types of Coverage Providers
The following list summarizes the types of providers from which a district may purchase insurance coverage:
- Licensed companies are those that are licensed by TDI to sell insurance in the state. These companies provide most coverages, including health, life, annuities, disability, workers’ compensation, property (fire, extended coverages, glass, windstorm, etc.), automobile (physical damage, collision and liability, garage liability, etc.), boiler and machinery, and public and professional liability. A state guaranty fund covers some licensed companies if they fail financially.
- Surplus lines companies write property and casualty coverage that the admitted market will not write. Although companies writing surplus lines coverage are not licensed in Texas, agents who sell this coverage must be. Surplus lines companies must be licensed in their home state, however, and must meet certain minimum requirements to be admitted in Texas. Surplus lines companies are not covered by a guaranty fund, so claims could go unpaid if the company becomes insolvent. It’s also important to note that surplus lines coverage is not a substitute for a valid workers’ compensation policy.
- A risk retention group is a casualty insurance company formed by two or more entities to write their liability insurance coverage. The group is licensed in one state and must register in other states to do business. A risk retention group is regulated by its domiciliary jurisdiction and does not participate in any state guaranty fund.
- A purchasing group is two or more entities with similar or related liabilities that combine to purchase liability coverage from insurance companies. A purchasing group registers with TDI and obtains its coverage from licensed insurance and surplus lines companies or risk retention groups. TDI generally does not regulate purchasing groups.
- Governmental entities, organized under the Inter-Local Cooperation Act, may write or arrange coverage for school districts including employee benefits (life, health, disability), workers' compensation, casualty, and unemployment compensation coverages. Two examples of interlocal agreements are the Texas Association of School Boards Risk Management Fund (TASB RMF), consisting of school districts, community colleges and other governmental entities, and the Texas Association of Community Schools (TACS), consisting of districts with single high schools. TDI does not regulate interlocal agreements.
- Pools and trusts arrange coverage for large associations or groups of individuals. Municipalities, counties, school districts, universities, and even medical associations create pools or trusts to provide coverage to their members. TDI does not regulate pools or trusts.
- Third party administrators (TPAs) administer most self-funded plans. A TPA provides administrative functions like enrollment, premium collection, and claim payment. A TPA assumes no risk. The school district remains liable to pay for claims. A licensed insurance company also can be a TPA. Texas TPAs must hold valid licenses from TDI. To verify a TPA’s license, call TDI’s Consumer Help Line.
Texas Secretary of State
Texas Education Agency
Texas Workforce Commission
Texas Association of Public Schools Property and Liability Fund
Texas Association of School Boards
Teacher Retirement System of Texas
542-6400 in Austin
Governmental Accounting Standards Board
Division of Workers’ Compensation
804-4000 in Austin
Public Risk Management Association (PRIMA)
State Bar of Texas: Labor and Employment Law Section
National Archives and Records Administration: Code of Federal Regulations
For More Information or Assistance
For answers to general insurance questions, for information about filing an insurance-related complaint, or to report suspected insurance fraud, call the Consumer Help Line at 1-800-252-3439 or 512-463-6515 in Austin between 8 a.m. and 5 p.m., Central time, Monday-Friday, or visit our website at www.tdi.texas.gov.
For printed copies of consumer publications, call the 24-hour Publications Order Line at 1-800-599-SHOP (7467) or 512-305-7211 in Austin.
To report suspected arson or suspicious activity involving fires, call the State Fire Marshal’s 24-hour Arson Hotline at 1-877-4FIRE45 (434-7345).
The information in this publication is current as of the revision date. Changes in laws and agency administrative rules made after the revision date may affect the content. View current information on our website. TDI distributes this publication for educational purposes only. This publication is not an endorsement by TDI of any service, product, or company.
For more information contact: