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.)

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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.