Who does HB 1774 impact?
The law impacts those people who have issues AFTER filing their claim with their insurance company and choose to take their insurance company to court. It’s important to know that the vast majority of all claims are settled without litigation. In Texas, the number of claims that go to court is less than three percent, according to Alex Winslow, director of communications for the Texas Trial Lawyer’s Association. So why pass this law if such a small percentage of claims are legally disputed? The answer is because the system was being abused by several law firms in certain counties in Texas, taking advantage of consumers, and causing major problems for the entire insurance industry. If this wasn’t fixed by the state legislature by passing HB 1774, insurance premiums would have to rise to deal with the abuse, hurting all consumers across the state.
What will change after September 1, 2017?
Despite a lot of misinformation being spread by many attorneys, your rights under Texas law have not changed after the passage of HB 1774. The biggest change is that if you plan on suing your insurance company (remember, this is a small percentage out of all claims), your legal representation must provide both you and your insurance company prior notification of legal action and an opportunity for the insurance company to inspect your property. Many times, lawyers were filing lawsuits, and the consumer had no idea that they had filed a lawsuit against their insurance company. There are other changes that will occur (change in interest payments, lowering payouts to attorneys) but these will not impact your ability to file a claim with your insurance company.
Why would I need to sue my insurance company?
Even though the vast majority of all claims will be paid if there was in fact coverage for the claim, there may still be reasons why a lawsuit against your insurance company may be necessary. Many times, there is disagreement about the total amount paid out by the insurance company, with consumers feeling that they did not receive enough money to cover their damages. Or the insurance company denied the claim all together and the consumer feels that there should have been coverage.
What should I do now to make sure HB 1774 has no impact on me?
- Contact your insurance agent and insurance company as soon as possible to begin the claims filing process. Do not worry about filing before September 1! It will have no impact on your claim getting paid
- Review your coverages and deductible with your agent to make sure you do, in fact, have proper coverage. Remember flooding or rising water from the outside is not covered on your home insurance policy. You need flood insurance for that. Unfortunately, 85% of people do not have flood insurance in Houston. Also, since flood insurance is mainly run through a government based program, HB 1774 does not apply!
- DOCUMENT, DOCUMENT, DOCUMENT! I can’t stress this enough. Take an inventory of everything you own using your phone to take pictures/videos so you can submit as proof to your insurance adjuster. Make sure to store these in the cloud in case your phone is lost (Google Drive, Drop Box, etc.)
- Try to mitigate any damage. Your home insurance policy almost always has clauses that require you to do what you can to avoid further damage. After a flooding event like Harvey, there isn’t a whole lot you may able to do and insurance companies understand that. However, if there is a whole in your roof and you can have a tarp placed over it to prevent further damages, the company will typically reimburse those costs and you are helping to reduce the amount of damages to the remainder of your property.
- Get contact information for your adjuster and make sure you get your claim number. Take pictures of all documents you receive from the adjuster and insurance company.
- Be patient. This is the worst disaster our area has seen in many years and it will take time to adjust so many claims. Texan Insurance has already received at least 400 claims in less than 72 hours.
The Texas Department of Insurance will, as always, in catastrophic events, be monitoring the activities of insurance companies to make sure that claims are being paid properly and as promptly as possible.
As an independent agency, our job is to make sure our clients’ claims get handled as quickly and fairly as possible. We only work with insurance companies that we feel will be there for our clients when they need them the most. This is that time and we are confident that they will do everything in their power to help those impacted by this catastrophic event. Our entire team stands ready to help our clients in any way we can.