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| dallasnews |
Even as Harvey's devastating deluge continues to inundate Texans' homes, lawyers are urging waterlogged homeowners to file insurance claims by Thursday to avoid losing out on important rights that lawmakers limited during the legislative session this year.
"It's a David vs. Goliath battle from the start," said Dallas lawyer Brian Lauten. "They have basically taken away David's slingshot."
Starting Sept. 1, House Bill 1774 becomes law in Texas, a measure that advocates for insurance companies say was designed to limit lawsuit abuses while preserving protections for homeowners.
Lawyers and consumer advocates, however, say the new law will severely limit homeowners' ability to hold insurance companies accountable when they take months or years to pay for a claim, underpay or wrongfully deny legitimate claims. And they are exhorting Harvey's victims to preserve their rights under current law by filing claims before the new measure takes effect Friday.
"I know this may seem like the last thing people have on their mind as they are stranded from their families, homes and businesses, but the new law strips people of their rights," said Geoff Henley, of the Henley & Henley firm in Dallas, "and so immediate action is necessary."
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Sen. Kelly Hancock, R-North Richland Hills, who sponsored the legislation in the Senate, said lawyers are misleading homeowners, who should remain focused foremost on their safety.
"There is no need to rush to file a claim. Put your safety first. Do not return to seriously damaged property unless you are informed that it is safe," Hancock said.
The new law reduces the amount of interest insurance companies will have to pay to homeowners if they take too long to pay for a claim. Currently, if a court finds that the company delayed payment, the company must pay the claim with 18 percent interest. The new law knocks the interest down to about 10 percent. The law also reduces the amount of attorney fees that homeowners can recover if they don't estimate with 80 percent accuracy the amount of damages done to their home when they file suit against the insurer.
Lawyers and consumer advocates say those measures make it harder for homeowners to demand timely payment for the damages done to their homes and will make it more difficult for them to find lawyers willing to sue insurance companies who've wronged them.
"There is nothing about this bill that helps policyholders," said Will Adams, vice president of legislative affairs for the Texas Trial Lawyers Association. "Everything about this bill makes it harder for policyholders to hold insurance companies accountable."
Adams said homeowners can protect their ability to receive 18 percent interest on delayed payments by filing their claims before Sept. 1. But the law requiring more accurate damage estimates is only triggered after a homeowner files a lawsuit, and none of Harvey's victims are likely to sue before Friday.
"There are going to be thousands upon thousands, if not millions, who aren't going to be able to do that, and they're going to be stuck," Adams said.
Lucy Nashed, a spokeswoman for Texans for Lawsuit Reform, the lead supporter of the legislation, said its opponents are exaggerating the potential impacts. Most homeowners will not be affected, she said, because most people go through the regular insurance claims process and do not sue their insurers.
"Texas has some of the strongest consumer protections in the nation for policyholders that are denied or underpaid by insurance companies," Nashed said. "That is still the case."
She said the new law protects homeowners even further by reducing unnecessary lawsuits that increase homeowners' insurance premiums.
"The abuse exists, it's there, and to turn a blind eye to that is not helpful to Texas homeowners," she said.
Hancock reiterated that the new law does not affect the claims process, only lawsuits. And he said homeowners can still get up to 20 percent interest on claims that are not paid in a timely way.
"Sadly, while the storm is still raging and acts of heroism abound, a select few bad actors have circulated misinformation regarding insurance claims to scare property owners, all for the sake of profit," he said.
But Lauten encouraged Harvey victims not to take any chances that might result in losing out on their ability to ensure insurance companies make good on their promises to protect their most valuable investment. He urged homeowners to take photos of the damages to their homes, to immediately find their insurance policies and file claims, and to hire a lawyer right away.
"It takes an unlevel playing field that's already incredibly biased in favor of insurance companies and makes it a mountain the insured has to climb to get fair treatment," he said.
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