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House Bill 1774, which was backed by the insurance industry and passed by the 85th Texas Legislature last month, goes into effect at 12:01 AM, Friday, September 1, 2017. This new law will curtail the ability of policyholders to sue insurance companies over property damage claims following extreme weather events. Essentially, the bill will make it much more difficult for homeowners and business owners to hold insurers accountable for underpaid claims or poorly handled claims’ investigations by cutting the penalties for insurers who offer inadequate compensation on weather-related property damage claims. You can see the text of the new law here.
As many Texans are dealing with the devastating and historic flooding caused by Hurricane Harvey this weekend, a new Texas law is set to take effect at 12:01 AM on Friday, September 1. This new law will significantly impact you rights and under the Texas Insurance Code and specifically applies to property damage to homes and businesses involving "forces of nature" (e.g., hail, rain, floods, hurricanes, tornadoes, wind, wildfires, etc).
If you have property damage to your home or business related to Hurricane Harvey, you are strongly encouraged to make a claim with your insurance company—in writing—BEFORE Friday, September 1st, 2017. Remember to reference the details of your claim specifically, keep records of what you sent, and send your notice by certified mail return receipt requested.
In effect, the new law reduces penalties owed to you by insurers who fail to promptly pay a claim; imposes on a homeowner much more restrictive notice requirements; forces requirements on courts to compare the amount demanded in a pre-suit notice letter to the amount of damages awarded in an attempt to reduce recoverable attorneys' fees; and allows insurance companies to assume the liabilities for its agents and employees so that most of these cases will wind up in federal court.
As originally filed, the bill would have only addressed claims relating to hailstorms. Unfortunately, it was later amended to include other severe weather-related events including earthquakes, wildfires, floods, tornadoes, lightning, hurricane, wind, snowstorms, or even rainstorms.
The new law states that:
The insurance industry in Texas has been pushing for this bill as a reaction to an increase in hailstorm-related property damage claims over the past few years. Unfortunately, our conservative legislature cowers to the interests of big business rather than protecting the average citizen of the State of Texas.
Ware Wendell, the Executive Director of Texas Watch, says that under HB 1774, "many insurance companies will pay property owners as little as late as possible. Texans can expect only more delays and denials from the for-profit insurance industry. The harmful effect of this legislation for homeowners, businesses, churches, and schools will be felt all across our state."
Handling insurance claims for property related damage is a complex and one-sided process. Storm damages can be costly to fix, which is why we buy insurance. Many homeowners are even required to have a storm policy. As property owners, you pay your premiums in exchange for a promise that the insurance company will cover unexpected losses, but you must also understand that insurance companies are looking out for their bottom line.
It's estimated that homeowner insurers in Texas have made over $4.5 billion in profits since 2012. This new legislation not only reduces the penalty insurers face for slow payments, it forces most storm-related property damage disputes into an overburdened federal court system, and limits the ability of property owners to recover their own attorneys' fees if the amount they're demanding differs from the amount the jury ultimately awards.
For those of you who are now facing the daunting challenge of putting your life back together after Hurricane Harvey, do not become a victim again by waiting to file your property damage claim until after September 1, 2017. File your claim as quickly as possible. Claims submitted on or after September 1st, 2017 will be handled according to these new rules, and insurance companies know this. Do not let them prevent or persuade you from filing your claim IMMEDIATELY, and be sure to keep records of what you sent, when you sent it, as well as any communications you receive from them.
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Note: The information that was utilized in this post was gathered from the use of secondary sources. This information used has not been confirmed or independently verified. If you locate any information that is not correct, please contact our firm as soon as possible so that we can make the appropriate corrections. If you find any information that is false, we will remove or correct the post immediately after it is brought to our attention.
Disclaimer: As a valued member of the Dallas community, Rasansky Law Firm’s goal is to improve the safety of all residents in the great state of Texas. These posts should not be viewed as a solicitation for business and the information included herein should not be taken as medical or legal advice. The photos used in this post are not representative of the actual crash scene.
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