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.