Hail Damage Crisis
By: Taryn T. Walters
Webb County may soon be at the center of a rising crisis in Texas due to a skyrocketing number of hail damage lawsuits being filed.
A Texas attorney said many homeowners are solicited by a public adjuster and later find out they are unwittingly a party to a lawsuit.
Insurance rates in Webb County are increasing due to these lawsuits and residents can expect to see changes in their policies, according to agents in the Laredo market.
These lawsuits are ultimately affecting all of Webb County as they take a toll on the homeowners, local insurance agents, insurance agencies and ultimately anyone holding a insurance policy for their home.
The number of hail damage lawsuits filed in the county rose over 300 percent between 2013 and 2014, according to statistics provided to LMT by the Zelle Law Firm.
About 655 have been filed so far this year. That’s roughly three times more than the number of suits filed in Harris County and seven times the number filed in Bexar County.
Attorney Steve Badger’s law practice, Zelle, is focused on addressing the emerging hail risk. The firm focuses on the identification of fraud and other illegal conduct occurring in these matters.
Badger says the increase has nothing to do with compensating homeowners for denied roof claims.
Insurance professionals agree, the increase is being driven by lawyers, public adjusters and contractors who are soliciting Webb County homeowners to file these lawsuits.
When someone knocks on the door and mentions hail damage, they ask for the homeowner’s signature with promises of free money that can be used for anything from home remodeling to a vacation.
According to Lee Parsley of Texans for Lawsuit Reform, the true intent of these contractors and adjustors, going to door to door, is to secure the homeowner’s signature on a document that will allow an attorney to file a lawsuit against the homeowner’s insurance company.
Many of these homeowners are unaware of what happens after their signature is obtained.
Badger said he represented a Webb County resident who was “solicited by a public adjuster and later found out she was unwittingly a party to a lawsuit.”
A recent trial for a hail damage lawsuit ended with the jury siding with State Farm after successfully proving it had properly paid the claim.
“This result is typical of most trial outcomes in Hidalgo County as well,” Badger said.
Webb County is second highest in Texas for hail damage lawsuits filed this year. Hidalgo leads with 947 lawsuits filed in the first five months of 2016.
“Once the juries hear the facts and what these lawsuits are really about, the insurance companies prevail,” he said.
Juan Padron of SafeGuard Insurance told LMT that a strain is put on insurance companies and agents due to the high quantity of suits against them. Consumers are at a disadvantage due to the strain placed on the insurance industry.
In 2014 and 2015, a total of 2,616 hail damage lawsuits were filed in Webb County. Only 124 hail suits were filed here between 2006 and 2013.
Typically the claim process begins by homeowners making a notice of the claim with their agent. Due to the contractors and public adjusters getting involved, the notice of a damage claim is now the agent being handed lawsuit paperwork, Padron said.
Jorge Gonzalez, president of local insurance agency FalconSure, said “once the customer files a lawsuit, it is between them and the attorneys.”
“It takes the agent out of the equation,” Padron said, as many lawyers recommend that the suit’s parties do not contact one another.
Once a suit is filed on behalf of a homeowner, agents are no longer able to process their claim. This leaves many residents in need of repairs at a disadvantage. It could take years before their claim’s litigation ends. Many times the resident ends up receiving less money than they would have gotten in the claim had it been handled through the agent, or no money at all.
Insurance agencies are likely to raise policy prices or cancel policies altogether after a claim has gone through litigation.
Padron said some insurance companies are no longer writing new policies due to the high volume of lawsuits they were named in. In some cases, they are choosing to not renew accounts and just pull out of the market completely.
Badger said two major insurance companies stopped writing policies in South Texas.
While the insurance industry and others pushed for reform that would address the abuse allowing for these lawsuits to take place, the 2015 Texas Legislature failed to pass any changes.
Insurance agents are asking lawmakers to make changes that would require a notice of a claim be filed with them before any lawsuit is filed. Agents want a waiting period that would allow them to address the claim before they get slammed with lawsuits.
Many attorneys marketing their ability to make homeowners money through hail damage suits failed to return phone calls and emails to LMT. Most of these attorneys are located outside of Laredo and are offering their services to all of South Texas.
John R. Solis, a Laredo attorney contacted by LMT, did not wish to comment on his services. When Googling “Laredo hail damage claim,” Solis’ website is the third one listed in the search results.
Rickey Conradt, a contractor who advertises himself as a “Laredo, Texas storm and hail damage expert,” who helps “achieve the maximum settlement possible,” could not be reached for comment.
When Googling “Laredo hail damage claim,” Conradt’s website is the first and second one listed in the search results.
Gonzalez said, “the bottom line is that when you have a claim on your house, call your insurance agent. Let them help you handle it.”
“That is what you have your insurance agent for,” he said, “you don’t need help from anybody knocking on your door.”