New Insurance Bill - Storm Loss Claims

New Insurance Bill – Storm Loss Claims

On May 19, 2017, a bill was sent by the Texas legislature to the Governor for signature relating to claims for storm loss property damage. This bill was passed to curb alleged lawsuit abuses for property damages caused by severe storms.  According to House Research Organization Bill Analysis, the supporters of the bill state that the frequency of these types of lawsuits has increased 1400 percent since 2012, are motivated by profit rather than actual damages, and should be discouraged.  The proponents of the bill contend that the bill will obstruct the rights of property insurance policyholders to relief by restricting their rights to sue insurance carriers that wrongfully deny or underpay claims.

The bill will require an insured consumer who has suffered a storm loss to their home or real property to provide 61 days advance written notice to their insurance carrier before filing a lawsuit.  The notice must specify the acts of the carrier giving rise to the claim, the amount owed, and the amount incurred in attorney fees.  The carrier will be allowed to perform a pre-suit inspection of the property. The bill also provides a mechanism for protecting an insurance carrier’s agents and claims adjusters from personal liability.  The bill, amongst other things, places limitations upon the rights of the insured consumer to recover attorney fees and interest. Obviously, only time will tell if the bill achieves its purpose.