Texas storm damage law takes affect on September 1
Three months before Harvey began to form, the Texas legislature passed what now seems like a foreboding insurance law. Touted under the catchy name “hailstorm lawsuit reform,” the insurance industry aggressively lobbied for Texas House Bill 1774 — which makes clear who stands to benefit.
The law takes affect on September 1, and the timing couldn’t be worse. Our main focus now is on rescuing people and helping those who have been displaced. Thousands of people have fled their homes and are living in temporary shelters as thousands more remain in storm ravaged housing waiting for boats and helicopters to reach them. The death toll is at 10, a number that will likely increase.
And the rain is still coming.
Of course, we urge policyholders to put safety first. If you cannot safely file your claim by Friday, you are not barred from doing so. However, for those who can, submitting your insurance claim before Friday has advantages.
All claims filed prior to September 1 fall under the current insurance law, which offers important consumer protections.
What will change under Texas House Bill 1774?
Texas House Bill 1774 applies to property damage claims related to “forces of nature,” such as flooding, heavy rain, high winds, wildfires, hail, tornadoes and hurricanes. The insurance lobbyists claimed that the new law was necessary to prevent the filing of frivolous lawsuits after a catastrophic storm.
In actuality, the law makes filing a lawsuit more difficult and gives the insurance companies more leeway if they act in bad faith.
First, under the new law, plaintiffs’ lawyers must provide more details in the notice of intent, which is the first step in filing a lawsuit. This shifts more burden onto the plaintiff at the initial litigation stage.
Current law imposes 18 percent interest on money the insurance company owes to its policyholders. The penalty deterred delays in making full payments and provided policyholders fair compensation if they were forced to wait for their rightful money. The new law drops that penalty to 10 percent, and so cuts a break to insurance companies that failed to act in good faith.
Harvey damage may reach $20 billion
Hurricane Harvey has dumped 30 inches of rain on Houston and the surrounding region and parts of the city are completely submerged. And it’s not over yet. Houston might receive an unbelievable 50 inches of rain by the time Harvey finally dissipates.
How much is 50 inches? That equals the amount of rain that fell on Fort Worth during the past 15 months. Imagine the numerous wet days we’ve had, and the storms that caused major flooding in DFW, compiled into one devastating week.
At this point, we don’t yet know the full extent of the damage. But financial experts estimate the costs to the insurance industry could equal from $10 billion to $20 billion. To put that number into perspective, one-quarter of insurance companies’ earnings could go to Harvey victims. This could put Harvey in the top 5 most expensive hurricanes, alongside Katrina, Sandy and Andrew. Texas faces a long road to recovery.
If you have questions about the new law and how it might affect your auto accident claims, please call Berenson Injury Law. We are here to help.