As Harvey floods Houston, a new Texas weather-insurance law could spell more bad news for its victims
Texas is changing how weather-related insurance lawsuits are handled starting Sept. 1, when Tropical Storm Harvey has barely ceased dumping historic levels of rain on Houston and other parts of southeast Texas. Gov. Greg Abbott (R) signed the law, HB 1774, on May 27, promoting it as a way to protect insurance companies from frivolous hailstorm-released lawsuits, though it applies to all weather-related property damage, including from hurricanes, wildfires, and floods.
Texas lawyers' organizations and consumer advocacy groups warn that the law will significantly reduce the ability of homeowners to hold insurance companies accountable if they delay storm-related settlements for months or years, underpay for property damage, or wrongly deny legitimate claims. They encourage homeowners to file claims before Friday to maintain the benefits of the current law, including higher penalty fees (18 percent of the claim, versus 10 percent under the new, adjustable rate). All claims filed before Sept. 1 would still be subject to the new law's reductions on the amount of legal fees homeowners can recoup in court if their original claim isn't accurate enough and new legal protections for individual insurance agents.
State Sen. Kelly Hancock (R), the main Senate sponsor of the bill, said lawyers are exaggerating the effects of the law. "There is no need to rush to file a claim," he said. "Put your safety first. Do not return to seriously damaged property unless you are informed that it is safe." Lucy Nashed, a spokeswoman for Texans for Lawsuit Reform, the group backed by insurers and the GOP that pushed for the legislation, highlighted that the law applies only to lawsuits, not claims, and that most homeowners don't have flood insurance, which is mostly covered by the National Flood Insurance Program anyway and therefore not subject to state law. (Only about 15 percent of homes in Houston's Harris County are covered by the FEMA-administered flood insurance program.)
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Jeff Raizner, a Houston lawyer with of the Texas Trial Lawyers Association, said the new law does make some useful changes, but tips the balance too far toward the already powerful insurance industry. "I want to be completely fair, there were some bad actors" in the legal profession, he told The Texas Tribune. But "much of this new law is a money grab by the insurance industry." Will Adams at the Texas Trial Lawyers Association agreed. "There is nothing about this bill that helps policyholders," he told The Dallas Morning News.
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Peter has worked as a news and culture writer and editor at The Week since the site's launch in 2008. He covers politics, world affairs, religion and cultural currents. His journalism career began as a copy editor at a financial newswire and has included editorial positions at The New York Times Magazine, Facts on File, and Oregon State University.
-
Visa and Mastercard agree to lower swipe fees
Speed Read The companies will cap the fees they charge businesses when customers use their credit cards
By Peter Weber, The Week US Published
-
Reddit IPO values social media site at $6.4 billion
Speed Read The company makes its public debut on the New York Stock Exchange
By Peter Weber, The Week US Published
-
Housing costs: the root of US economic malaise?
speed read Many voters are troubled by the housing affordability crisis
By Peter Weber, The Week US Published
-
Feds cap credit card late fees at $8
speed read The Consumer Financial Protection Bureau finalized a rule to save households an estimated $10 billion a year
By Peter Weber, The Week US Published
-
Immigration helped the US economy outpace peers
speed read The U.S. economy grew at an annualized rate of 3.2% last quarter
By Peter Weber, The Week US Published
-
4-day workweek gets boost from UK study
Speed Read Following a six-month trial, the majority of participating British companies are still using the truncated schedule
By Peter Weber, The Week US Published
-
US sues to block Kroger-Albertsons merger
Speed Read The Federal Trade Commission sued to block the $24.6 billion merger between the grocery giants
By Peter Weber, The Week US Published
-
Nvidia sees historic stock rise on AI chips success
Speed Read U.S. chipmaker Nvidia achieved the biggest one-day increase in value of any company in history
By Peter Weber, The Week US Published