Texas moves closer to hail insurance reform
There’s one month left to go in the Texas legislative session, and things are starting to get interesting.
On Wednesday, the Texas Senate passed S.B. 1628, a bill designed to rein in emerging patterns of abuse in litigation stemming from hail claims. As we’ve written previously, the past few years have seen a large spike in the number of both claims and litigation involving hail damage, especially in certain parts of the state.
Hail claims are up 84 percent since 2010. Texas accounted for 16 percent of all hail claims nationwide from 2010 to 2012, but 28 percent of questionable claims from the same period were filed in Texas. In Hidalgo County, 35 percent of recent hail damage claims have resulted in a lawsuit, compared to 2 percent historically.
The rush to file claims has often resulting in unethical if not outright illegal behavior, with cases reported where policyholders did not even know that an attorney had sued insurance companies on their behalf.
S.B. 1628 aims to put the brakes on these practices before they imperil policyholders throughout the state. The bill beefs up notice and other procedural requirements to make sure parties to a lawsuit know what is at stake; tightens requirements to prevent fraud by public adjusters and others; and helps isolate the amount in controversy for purposes of attorney fees and penalties, which will reduce the incentives for frivolous litigation.
The bill isn’t perfect, but it’s a positive and necessary step to ensure both consumer protection and the rule of law. H.B, 3646, the House companion to S.B. 1628, is currently pending before the state House Insurance Committee.
