By: David Yates
BEAUMONT – On March 28, the Texas House Insurance Committee heard testimony on what has been dubbed the hailstorm lawsuit abuse bill – a piece of legislation, depending on who you talk to, aimed at either ending a civil crisis or giving insurers immunity from civil suits.
The hearing on House Bill 1774 lasted several hours and representatives heard a diverse range of testimony, which included trial lawyers crying foul, frustrated Texas homeowners who feel victimized by insurers and emotional insurance agents and adjusters expressing the stress that comes with being repeatedly sued.
Since its introduction, tort reform groups have advocated strongly for the bill’s passage, asserting “storm-chasing lawyers” have been driving mass storm litigation for monetary profit, causing many insurers to raise premiums or stop offering coverage in certain areas as a consequence.
Despite information presented during the hearing showing litigation rates following a major hailstorm have jumped significantly in recent years, many plaintiffs’ attorneys in attendance argued against the bill.
Bryan Blevins, an equity partner at Provost Umphrey, testified that the data shows insurers underpay claims and are raising premiums regardless of storm litigation.
However, several individuals representing insurance companies testified that most hail suits seek damages nearly four times higher than policy limits and are filed years after the insured claim was paid.
The committee expressed concerns that the model being used to drum up hail lawsuits is based of the one employed after Hurricane Ike ravaged the Gulf Coast in 2008.
Texas Watch, a self-proclaimed watchdog group backed by trial lawyers, argued during the hearing that the rights of millions of Texas property owners would be affected if the bill passed, referring to the insurance industry as “Goliath” and policyholders as “David.”
For two years in a row, the American Tort Reform Association has put Texas on its “Judicial Hellhole” list, specifically citing Hidalgo County – arguably the birthplace of mass hailstorm litigation.
Two hailstorms swept through the Rio Grande Valley in 2012. Soon after, thousands of lawsuits followed.
A Mostyn Law attorney, Rene Sigman, was on hand during the hearing, contending State Farm Lloyds, an out-of-state insurance company, underpaid Hidalgo County residents.
The Mostyn attorney also said her firm hates “storm-chasing attorneys.”
Firm founder Steve Mostyn is credited with inventing the model storm-chasing attorneys employ following a major weather event.
Many insurers have stopped writing coverage in Hidalgo County.