Texas law makes it harder for victims to sue insurers

Bloomberg

As if victims of Hurricane Harvey didn’t have enough to deal with, a Texas law that takes effect September 1 may make it harder for them to sue insurers for payment of claims.
Texas House Bill 1774, passed earlier this year, was designed to curb lawsuits against insurers after natural disasters. Politicians and industry groups said litigation is sometimes driven by “storm-chasing” lawyers who team up with roofers and public adjusters to seek big payouts. The law could mean that insurers face fewer suits after catastrophes such as Harvey, according to Stephen Pate, a lawyer at Cozen O’Connor who has handled storm-related cases.
“There was a cottage industry of certain policyholder attorneys that were filing hailstorm claims” in previous storms that were bogus, Pate said. “These policyholder attorneys were preying on people.”
Consumer advocates say the law could add more delays to the already-tedious claims process and may discourage lawyers from taking on legitimate cases, according to the Consumer Federation of America’s Bob Hunter. He said victims of Harvey may have a harder time because of the law.
“These people are getting really whacked; to have a second whack because they can’t find a lawyer when they really need one, would be very sad,” Hunter, director of insurance at the CFA and a former Texas insurance commissioner, said. “The wise thing for the Legislature to do is to quickly pass a four-month extension of this bill, not impose something new in the middle of all this.”
Houston, the nation’s fourth-largest city, is largely under water after Harvey pummeled it with about 49 inches of rain.