Natural disasters like Hurricane Harvey can bring out the best in people, as we’ve seen in the past weeks across Houston and the Texas Gulf Coast with everyday Texans doing heroic things.
There’s also an unfortunate increase in scams and misinformation that preys on Texans affected by the storms.
One such misinformation campaign took social media and traditional media by storm this past week, confusing and striking fear in homeowners over their insurance claims and coverage.
At issue is a new law that took effect Sept. 1 that’s aimed at reducing lawsuit abuse around insurance claims. Some personal injury lawyers have gone from ambulance chasing to storm chasing, stirring panic and fear over House Bill 1774, suggesting the new law will greatly limit homeowners’ rights to file legitimate suits against their insurers.
It’s time to get the facts straight on the impact of the new law. 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. It also preserves Texas homeowners’ right to sue, while ensuring that natural disasters aren’t used for financial gain driven by personal-injury lawyers.
Texans should know their rights and remedies under Texas law as they work to recover from Harvey. Our state has some of the strongest consumer protections against insurers that unfairly deny or delay claims. That was the case before this new law, and it remains so after it took effect.
Homeowners should remain vigilant against this and other misinformation and seek counsel from verifiable, credible sources. Don’t just take our word for it.
The Texas Department of Insurance publicly reassured homeowners that they will maintain the same rights to an insurance claim now that the law has taken effect. Gov. Greg Abbott worked to assuage fears by reinforcing that homeowners did not need to rush to file a claim before Sept. 1, as have Lt. Gov. Dan Patrick, Attorney General Ken Paxton and many House members and senators.
But legitimate sources of information risk being drowned out by the deluge of misinformation from personal injury lawyers and their allies seeking to generate new cases and use our courts for greed, not justice.
What does all this mean for survivors of Harvey, specifically?
Homeowners should know the new law will probably not apply to the majority of claims or lawsuits arising from Harvey because of the type of damage that occurred and the areas it occurred in.
The Federal Emergency Management Agency (FEMA) has made clear that the new law does not apply to claims with the National Flood Insurance Program (NFIP), because it is governed by federal law. This program is where most people get their flood insurance. Additionally, the new law does not apply to claims made through the Texas Windstorm Insurance Association (TWIA) — a major insurer on the Texas coast — because it is subject to a different law governing post-disaster lawsuits.
The primary purpose of HB 1774 is to require written notice of a dispute before a lawsuit is filed. It’s really that simple, and it’s being done to ensure an insurer is aware of a policyholder’s complaint and has an opportunity to address the complaint before being sued.
HB 1774 is designed to discourage unscrupulous personal injury lawyers, adjusters and contractors from preying on Texans affected by weather-related events.
The bottom line is the normal insurance claims process has not changed, and a homeowner’s ability to sue and receive full damages for unpaid claims does not change with this new law either.
Be wary of individuals claiming to help you get more from your insurance company if you allow them to file suit on your behalf. They may be motivated by greed, more than ensuring you and your family’s property is repaired and made whole.
Jennifer Harris is executive director of Texans Against Lawsuit Abuse.