By: David Yates
AUSTIN – Two economic development groups in Texas, the Greater Houston Partnership and the Rio Grande Valley Partnership, have passed resolutions supporting two state bills seeking to stop hail-related lawsuit abuse.
Senate Bill 10, authored by Sen. Kelly Hancock, and House Bill 1774, authored by Rep. Greg Bonnen, still preserve some of the strongest protections in the nation for Texas property insurance consumers, according to a Texans for Lawsuit Reform press release.
The two partnership groups represent employers and chambers of commerce.
“Texans statewide are recognizing that lawsuit abuse is already hurting property owners by limiting the availability of affordable insurance options in areas of the state,” said TLR Chairman Richard Weekley.
“By acting quickly on SB 10 and HB 1774, the Texas Legislature can protect consumers from storm-chasing lawyers who abuse the system, while continuing to protect them from insurance companies that don’t pay claims on time and in full.”
A recent poll by Baselice and Associates found that an overwhelming 84 percent of Texans favor giving an insurance company a chance to resolve a disputed claim before a lawsuit is filed against it. Support was widespread among Republicans, Democrats and Independents, who favored the measure at 86, 80 and 86 percent, respectively, the press release states.
Additionally: 77 percent of Texans – including 80 percent of Republicans, 73 percent of Democrats and 78 percent of Independents – favor limiting the lawyer’s fee if they recover substantially less for their client than the amount they originally demanded from the insurance company.
Also, 71 percent of Texans favor protecting individual agents of insurance companies from lawsuits against them if the insurance company agrees to cover the liability for those individuals and to pay any damages owed by them. This includes 74 percent of Republicans, 71 percent of Democrats and 66 percent of Independents.
The Texas Department of Insurance recently issued a report to the Texas Legislature about the impact of widespread, lawyer-driven lawsuit abuse on Texas property insurance consumers.
With the rate of weather-related lawsuits increasing 1,400 percent statewide after 2011, TDI’s report presents an urgent need to stop this lawyer-driven litigation abuse, the press release states.
Additional data points from TDI’s report include:
- 12 companies have increased rates for homeowner’s insurance as a direct result of litigation;
- 7 companies have reduced, limited or stopped writing policies in Texas as a direct result of litigation;
- On average, it takes 94 days – or about 3 months – to close an insurance claim when a lawyer or public adjuster is not involved. But when a lawsuit is filed, it takes an average of 697 days – nearly two years, or seven times longer – to close an insurance claim; and
- The average pre-suit demand in a hailstorm lawsuit—just over $109,000—is more than four times the amount ultimately paid by the insurance company.