An insurance reform bill signed into law by the Republican governor of Texas in May could allow insurance companies to underpay victims of the devastation brought about by Hurricane Harvey.
According to Dallas-Ft.Worth real estate expert Candy Evans, House Bill 1744 was signed by Gov. Greg Abbott with the understanding that it would clamp down on insurance fraud and limit the ability of policy holders to sue their insurer.
As Evans notes, “The law reduces the penalties insurance companies can face if they settle claims for too little, and it lessens the chance the companies will have to pay the homeowner’s attorneys fees if the homeowner sues. It also protects individual agents from things like diminished credit scores if they are individually sued.”
More pertinent, in light of the Harvey devastation, the bill includes all weather-related damages including floods, wildfires, hail and hurricanes.
According to Evans, the limitations should come as no surprise, with State Sen. John Whitmire (D-Houston) warning about the untended consequences of the bill during debate in May.
“I think we will hear from our constituents across the state when we have storms,” Whitmire stated.
According to attorney Terry Traveland, the bill — which becomes law on Friday — is retroactive.
“It doesn’t matter when you file the claim, it is when you file the suit.” she said before offering advice to victims of Harvey.
“They should go ahead and file a claim and let their insurance company know that they think they have damage,” she said. “If you get down there two or three weeks later and there is no damage, then you just call back and say, ‘Hey, we’re not damaged,’ and the insurance company is happy and the claim is closed.”
“To throw another kink into this, the actual federal common law preempts state law regarding flood damage,” she continued. “You should make a claim no matter what.”
“Yes, you will file with FEMA, too,” she continued. “But there is damage that will be flood, wind and from the rain, and you don’t know which. There are exceptions to the law that actually go under state law. I would advise them to make sure they have a camera — a real camera, although an iPhone will do if you don’t have one. Video the car and your house. Open the trunk, open the doors, document all the damage.”
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