By: David Yates
HOUSTON – With the remnants of Hurricane Harvey still impacting the city of Houston, Texas tort reform groups have issued statements assuring victims that a passed bill aimed at enduring storm lawsuit abuse hasn’t changed the insurance claim process.
Texans for Lawsuit Reform, which was founded in Houston, says that, as with any evolving situation of this nature, misinformation can spread quickly and Texans should have the facts.
“The normal insurance claims process has not changed. Reform legislation passed in the last legislative session (HB 1774) goes into effect on Sept. 1 and applies to lawsuits filed after that date,” TLR said in an Aug. 28 release.
“A person making a claim with her insurance company after September 1, 2017 will go through the same process as a person making a claim before Sept. 1. Texans should contact their insurance companies directly to file claims.”
TLR says lawsuits are the exception – not the rule, and the vast majority of Texans will resolve their claims without needing to file a lawsuit.
“Beware of anyone—lawyer, adjuster, contractor, or anyone else—claiming to help you get more money from your insurance company,” TLR said in the statement.
“If your insurer does improperly deny or delay paying your claim, Texas has the strongest consumer protections in the nation for you, which will continue to be the case after Sept. 1 Texans can receive full damages for unpaid claims, can recover attorney fees for legal action taken to recover those damages, and can also recover penalty interest. If an insurer acts fraudulently or in bad faith, additional remedies, including the recovery of triple damages, are available to Texans.
“This is true today, and it will be true after the reform legislation HB 1774 goes into effect.”
The primary purpose of the new statute is to require written notice of a dispute before a lawsuit is filed. If a lawsuit is filed, it would happen months or years after the initial claim was made with the insurance company. Nothing in the new law passed by the legislature earlier this year requires that the initial insurance claim be made in writing or by a specific date.
The requirement for a written pre-lawsuit notice (not pre-claim notice) to the insurance company ensures the company is aware of its policyholder’s complaint and has had an opportunity to adequately address that complaint before being sued.
“Furthermore, the new law will not apply to most claims or lawsuits arising from Harvey, because most of the policyholders’ claims will be for damage caused by flooding,” TLR said. “These claims will be made under the federal flood insurance program and governed by federal law.”
To assist with disaster relief efforts across the impacted area, TLR has made a donation to the American Red Cross, and asks all Texans to join relief efforts.
Texans Against Lawsuit Abuse also issued a statement on Aug. 28, saying HB 1774 is a common-sense reform that will limit lawsuit abuse by giving insurance companies 60 days to resolve a claim before being taken to court while preserving Texas homeowners’ right to sue – ensuring that natural disasters aren’t used for financial gain driven by personal injury lawyers.
“These reforms are especially timely, in light of the catastrophic Hurricane Harvey that is impacting the Texas Gulf Coast and greater Houston area,” TALA said. We pray for those who have been impacted by Hurricane Harvey, and we want to remind consumers of their rights and remedies under Texas law as they work to recover from the devastation.”
State Sen. Kelly Hancock, who authored the bill, also released a statement urging homeowner to beware of storm chasers in Harvey’s wake.
"First and foremost, our prayers are with each Texas family affected by the storm,” Hancock said. “I am closely monitoring the local, state and federal response and want to echo the clear message of our statewide officials that this disaster is ongoing, and our focus must continue to be saving lives and meeting the critical needs of those in harm's way.
"Sadly, while the storm is still raging and acts of heroism abound, a select few bad actors have circulated misinformation regarding insurance claims to scare property owners, all for the sake of profit.”
The senator’s statement says the facts are:
- In the wake of a significant natural disaster, homeowners should be on alert for storm-chasers. File insurance claims directly with your insurance company. Do not provide up-front payment to individuals who may be blanketing your neighborhood promising faster repairs or larger payouts;
- HB 1774 has no impact on the insurance claims process, it only affects lawsuits. The narrative that the claims process changes on Sept. 1 is false. There is no need to rush to file a claim. Put your safety first. Do not return to seriously-damaged property unless you are informed that it is safe;
- Under HB 1774, if an insurance company acts in bad faith, property owners maintain the option to sue and are encouraged to report their insurer to the Texas Department of Insurance Consumer Help Line at 1-800-252-3439; and
- In the event that a lawsuit becomes necessary, HB 1774 limits lawyer's fees so that more awarded damages stay in the pockets of the rightful recipient, the property owner. In addition, prompt pay penalties awarded through a lawsuit will now be calculated on a floating basis tied to interest rates, with a 20 percent ceiling, rather than a static 18 percent penalty.