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Important changes affecting property damage claims under Texas Insurance Law will go into effect on Friday, September 1, 2017. 

To take advantage of current Texas Insurance Law protecting property owners’ with regard to damage claims resulting from HURRICANE HARVEY, policyholders should send a written message or email directly to their insurance company that

(1) specifically references their claim; AND

(2) is dated BEFORE SEPTEMBER 1, 2017.

Telephone messages will not suffice to give written notice.


New Texas law means Harvey victims have good reason to file claims by Friday


A new law, set to take effect Friday, aims to crack down on frivolous insurance lawsuits. But House Bill 1774 also reduces the penalty fees that insurance companies face for late payments.

For many Texans ravaged by the rain and winds Hurricane Harvey carried ashore this past weekend, filing an insurance claim for the damage their property sustained is probably the farthest thing from their minds right now. But waiting to submit a claim pastFriday could cost them big.

A new law set to take effect Friday aims to crack down on frivolous insurance lawsuits. But whether there's a lawsuit or not, House Bill 1774 also reduces the penalty interest rate insurance companies face for late payments.

If insurance companies are late in paying claims, they must pay an additional penalty to policyholders. Under current state law, that penalty comes in the form of a fee that totals 18 percent of the claim. For claims filed after Friday, that rate will be determined by a market-based formula. Currently, that would total 10 percent.

Jeff Raizner, a member of the Texas Trial Lawyers Association, which opposed HB 1774, said the law is a mixed bag.

“I want to be completely fair, there were some bad actors,” said Raizner, a Houston trial lawyer who has worked on insurance cases for 25 years. He added that some of what the new law requires addresses that problem – like strengthened rules on communications regarding claims issues and attorney fees structures.

But he calls the penalty changes an overreach.

“Much of this new law is a money grab by the insurance industry,” Raizner said.

Anyone suing an insurance company based on a Harvey claim will be subject to the new law. The claims process would need to run its course before a policyholder could even consider suing. And that process can’t happen by Friday.

The new law decreases the chances insurance companies will have to pay the plaintiff’s attorneys fees in full and protects agents from being personally sued.

“The intent of the bill was to cut off this ‘cottage industry’ that was happening around hailstorms after Hurricane Ike; lawsuits that didn’t need to be filed,” said Lucy Nashed, a spokesman for Texans for Lawsuit Reform. TLR supported the bill and argues that because the bulk of Harvey insurance claims will be flood-related, nothing will change. 

For one, most homeowners' policies in Texas don't cover flooding. And for those that do, the policies are often with the National Flood Insurance Program through the Federal Emergency Management Agency, which aren’t subject to state regulations.

During the 85th Legislature this year, HB 1774's author, Rep. Greg Bonnen, R-Friendswood, told lawmakers the legislation would target the "worst lawsuit abuse we have in the state" while protecting the rights of Texans to sue an insurance company.

At least 29 lawmakers who represent areas hit particularly hard by Harvey voted for the bill. 

Among those supporters was state Rep. Briscoe Cain, R-Deer Park.

“I believe that Texans have the strongest consumer protections in the nation against insurers” that don't deliver on claims, Cain said.

He said people who are harmed by bad actors in the insurance industry will still have protections under this law.

“There’s a lot of misinformation and fear-mongering going on right now” regarding the legislation, he said, adding that it's "premature to speculate" how it would affect people filing claims related to Harvey.

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