Weathering The Storm: Texas’ Hailstorm Litigation Reform Bill

Texas is known for its prolific weather events — wind, hail, tornadoes and, most recently, Hurricane Harvey — all of which can wreak havoc and cause significant damage to residential and commercial properties. As the locals say: “If you don’t like the weather in Texas, wait five minutes” and the next weather pattern will roll in. But six-12 months after the storm rolls out, Texas is known for another prolific event: the filing of storm litigation cases across the state. While some of these claims have been meritorious, many are not, resulting in clogged courthouses and escalating attorneys’ fees.

Texas House Bill 1774, which became law on September 1, 2017 (codified as Texas Insurance Code §542A, “Certain Consumer Actions Related to Claims for Property Damage”), is Republican-backed legislation intended to address “insurance claims and certain prohibited acts and practices in the business of insurance.” It applies to all first-party property claims that pertain to “damages to or loss of covered property caused, wholly or partly, by forces of nature, including an earthquake or earth tremor, a wildfire, a flood, a tornado, lightning, a hurricane, hail, wind, a snowstorm, or a rainstorm.” Supporters that argue the legislation will reduce unwarranted storm litigation by: (1) weeding out frivolous claims before they reach the courthouse; and (2) giving insurance companies a means to identify and settle meritorious claims before they become lawsuits. Opponents argue the legislatio