The last thing victims of Harvey likely are thinking about right now is insurance claims.
But some lawyers are urging the countless Texans whose homes and businesses were damaged from the hurricane and ongoing flooding to file initial insurance paperwork before Friday.
Any claims initiated by then fall under current law. Any claims made Friday or beyond fall under a new law — House Bill 1774 — that some fear will make it harder for Texans to receive some insurance payments.
“It’s going to save the insurance companies a lot of money and cost homeowners a lot of money in denied claims,” said Jason Smith, a Fort Worth attorney who investigated insurance companies’ fraudulent practices in the Texas Attorney General’s office in the 1990s.
Texas Attorney General Ken Paxton on Thursday released a statement saying this new law “does not apply to the federal flood insurance program, nor does it apply to homeowner policies issued by the Texas Windstorm Insurance Association.”
State Sen. Kelly Hancock, R-North Richland Hills, who carried the bill in the Senate, emphasized that he currently is focused on the storm and making sure Texans get out of harm’s way.
He, and others, say the new law is being distorted.
“There is no need to rush to file a claim,” Hancock said. “Put your safety first. Do not return to seriously damaged property unless you are informed that it is safe.”
But several attorneys say Texans should hurry and at least start the claim process before Friday.
Smith said a detailed filing isn’t needed, just a simple email to the insurance company noting that the homeowner is making a claim on their homeowners policy for damage related to Hurricane/Tropical Storm Harvey.
Anyone who can’t get online access should write the same thing down on paper and get it in the mail as soon as possible.
“That’s enough to initiate the claims process,” Smith said. “You don’t have to have all the information yet. You just need to say ‘there’s damage to my home’ and send it to the insurance company.”
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The new law applies to a variety of property damages involving “forces of nature” such as lightning, hail, rainstorms, flood, wind, snowstorms, wildfire, tornadoes — or hurricanes.
The goal was to cut down on excessive lawsuits, many related to hail storms.
The new law shrinks the penalty interest rate insurance companies must pay out if they make late payments to Texans. The rate currently is 18 percent; it drops to around 10 percent as of Friday.
Texans with rejected claims may still sue the insurance company. But the new law also drops the chance that insurance companies will have to pay in full for a homeowner’s attorney fees.
Hancock noted Texans can still sue, as well, if an insurance company “acts in bad faith.” In those cases, he urges anyone affected to report their insurance company to the Texas Department of Insurance Consumer Help Line at 1-800-252-3439.
Beyond that, if a lawsuit is needed, “HB 1774 limits lawyer’s fees so that more awarded damages stay in the pockets of the rightful recipient, the property owner,” according to the statement from Hancock’s office.
The law goes into effect, along with nearly 700 others, on Sept. 1.
Texans for Lawsuit Reform, which supported this legislation, has indicated critics are overstating concerns about the new law.
Paxton echoed those sentiments Thursday.
“Texas policyholders will continue to have strong remedies against insurance companies, whether claims are filed before Sept. 1 or after Sept. 1,” Paxton said in his Thursday statement.
State Rep. Chris Turner, D-Fort Worth, opposed this measure.
“The measure that passed does nothing to lower insurance premiums or protect homeowners,” Turner, head of the House Democratic Caucus, said when it passed. “Instead, it punishes Texans who make legitimate weather-related claims by making it easier for insurance companies to deny them.”
Texas attorneys have been posting messages online, particularly on Facebook, encouraging Texans to get their claims in — if at all possible — before Friday.
“We fear this natural disaster is going to be compounded by the man-made disaster of dangerous laws that make it harder to fight insurance companies when they wrongfully deny, delay or underpay valid claims,” said Ware V. Wendell, executive director of Texas Watch.
“Texas property owners should arm themselves with knowledge, get their claims on file as soon as they discover damage, and refuse to take no for an answer if insurance companies try to strong-arm them in the wake of this terrible storm.”
Smith said any delays in paying out claims will hurt the homeowner or business owner trying to make repairs — and financially help insurance companies.
Not only that, but “the longer an insurance company drags the process out, the more likely a policy holder will be willing to take less on their claim just to get money on their claim,” Smith said.
He stresses that the insured should not give up if a claim is denied by their insurance company.
“Ask them to re-evaluate it, ask for a lawyer, but don’t take no for an answer,” Smith said. “Insurance companies are notorious for denying claims just to see who will pursue them.”
Tips for Harvey victims
Many Texas lawyers recommend filing an initial claim by Aug. 31. Follow up later with your insurance company with a second email and document all interactions with the company.
Be alert for scams and people who chase storms.
Only file claims directly with your insurance company. Don’t give money or information to people in your neighborhood promising fast repairs.
Know that the bigger the loss is, the more likely you may need an attorney to make sure the claim is paid.
Source: Star-Telegram research