By: Kelly Hancock
Texas homeowners pay some of the highest property insurance premiums in the country.
With our wide-ranging severe weather, these rates are an unfortunate fact of living in a state otherwise known for its impressive economy and reasonable cost of living.
The Texas Legislature can’t control the weather, but we can crack down on lawsuit abuse that’s pushing insurance costs even higher than they need to be.
The public face of this problem is a practice called “storm chasing.”
These storm chasers are lawyers, roofers and public adjusters who work together to recruit homeowners in a neighborhood affected by severe weather, convincing them to file unnecessary lawsuits instead of moving through their insurers’ claims process.
Of course, they fail to mention that it takes on average eight times as long for a claim to be settled when a lawsuit is involved, drastically delaying repairs.
This kind of storm chasing started in the Rio Grande Valley, and we’ve seen it spread statewide to West Texas, San Antonio, Houston and right here in North Texas.
In fact, you may have seen recent news reports about a roofer who solicited cases for a lawyer and then ran off with people’s insurance money in Arlington, Dallas and Fort Worth.
The real root of the storm chasing problem is lawsuit abuse, and the Texas Department of Insurance recently released a report confirming just how severe that abuse is.
The report shows the lawsuit-to-claim ratio increased a staggering 15 times immediately after storm-chasing lawyers created this litigation explosion in 2011. That’s a 1,400 percent increase!
As a result, at least a dozen companies have raised rates for homeowner’s insurance and at least seven companies — that we know of — limited or stopped writing policies in Texas altogether.
After all, trial lawyers who know how to play the storm-chasing game in Texas aren’t concerned about the long-term effects of making a quick buck.
We saw this all too well with asbestos litigation and then the black mold crisis.
Insurance companies, like any other business, pass the costs of doing business on to their customers, and today insurance companies don’t even cover black mold because of litigation abuse.
We simply can’t let that happen with other property insurance coverage. We know from experience the only way to stop it is with principled legislation.
That’s why we filed Senate Bill 10 and why both Gov. Greg Abbott and Lt. Gov. Dan Patrick have stated their strong support for passing hailstorm lawsuit abuse reform this session.
Texas property owners deserve to be protected from all bad actors involved in the process.
Sometimes insurance companies don’t pay on time or in full, and SB 10 maintains some of the strongest consumer protections in the nation against insurance companies that act in bad faith.
As both a homeowner and a business owner, I know how crucial those protections are.
But there are other bad actors involved in this process, and it’s time to provide protection against the storm chasers, too.
That’s exactly what SB 10 does.
State Sen. Kelly Hancock, R-North Richland Hills, is chairman of the Texas Senate’s Business & Commerce Committee. His committee is expected to hold hearings on SB 10.