Amarillo ABC News 7: Texas Senate bill aims to make suing insurance companies a challenge

Texas Senate bill aims to make suing insurance companies a challenge

May 5, 2015

Amarillo ABC News 7,  Stephen Graves

The Texas senate has passed a controversial bill that aims to reduce the amount of lawsuits filed against insurance companies in the event of property damage.

Severe weather is a normal occurrence here in the panhandle. One of the most recent storms happened in May 2013. Amarillo is still seeing ramifications of the disastrous hail storm event. Severe damage means — insurance claims.

“We still find claims every day. People will call and not know they had damage,” said Greg Norton.

Norton is the owner of a roofing company right here in Amarillo. He’s in the front line of dealing with insurance companies and he says it can be frustrating.

“We’re still seeing the damage of 15 – 20% residential, however in the commercial side of it, we’re seeing an extremely high number of claims remaining unpaid, denied or in the argument phase and numerous of those are now going to lawsuits,” Norton said. “And this is what the insurance carriers beef is — that we’re suing them.”

The act of filing numerous lawsuits against the insurance companies is what Senate Bill 1628 in the Texas senate is trying to prevent. It would make it harder for homeowners to sue an insurance company by establishing certain mandates.

The author of the bill says it’s meant to prevent scammers from having easy access to filing false claims with insurance companies.

Representative John Smithee of Amarillo supports the bill, but wants to make revisions with his House Bill 3646.

“We’re going to reserve of course the right to sue an insurance company if that’s the last resort, but we’ve got to try to reduce the instances in which a suit is filed,” said Smithee.

Insurance companies are on board with the proposed legislation, but local lawyers say the flaws outweigh the good.

“The insurance company needs to pay what they’ve been paid to pay. When you pay a premium that should require them to pay if and when the damage claim is made,” said Attorney Dean Boyd. “An insurance company can basically act in bad faith and do whatever they want. It’s ten times worse and more difficult than it is now. People already have a really hard time getting their insurance claims paid.”

The bill is currently being discussed in the Texas House of Representatives.