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top Controversial bill aims to end ‘frivolous’ lawsuits against insurance companies

Controversial Bill Aims to End ‘Frivolous’ Lawsuits Against Insurance Companies May 6, 2015, Brett Crandall Senators in Texas passed a controversial bill aiming to end frivolous lawsuits filed against insurance companies. Those against the legislation warn filing an insurance claim could become much more cumbersome if the bill becomes a law. Three years after McAllen saw the city’s costliest natural disaster, some damage still sits unrepaired. A 2012 hail storm led to an unprecedented number of insurance claim and thousands of lawsuits. “Nothing compares with what we saw in Hidalgo County. One out of every three weather claims turned into a lawsuit. That’s unprecedented,” said Mark Hanna of the Insurance Council of Texas. Insured losses were originally estimated around $250 million, but after lawsuits and arbitration it has more than doubled – rising to about $600 million. The high number of lawsuits hurts homeowners, Hanna said. “You’re the epicenter; you started it all, Hidalgo County. And since then you got insurance companies saying, ‘Hey we don’t want to do business here anymore,’ you’re seeing homeowner insurance rates go up because of all of these frivolous lawsuits. You didn’t do yourself any favor,” Hanna said. Texas currently has the third highest homeowner insurance rates in the country. On April 30, the Texas Senate passed SB 1628, a bill that claims to prevent those rates from skyrocketing. The law would hurt homeowners, making it more difficult to sue insurance companies for better settlements, McAllen attorney Michael Moore said. “It’s like they’ve given the insurance company a get out of jail free card,” Moore said. Moore, who has taken on dozens of hail damage cases, said the SB 1628 will place a bigger burden on the policy owner to get what they need when they file a claim with their insurance company. “It gives the insurance company the right to file some type of complaint against the homeowner for criminal violations but at the same time the insurance company that undervalues the claim and doesn’t take care of the homeowner like they should has no penal ramifications whatsoever,” Moore said. In the meantime, the courts have more than 6,000 cases to hear in Hidalgo County alone. The bill still must be debated and passed in the Texas House of Representative and signed by the governor before it becomes... Read More

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... Read More

My High Plains: Proposed Law to Help Insurance Companies?

Proposed Law to Help Insurance Companies? May 5, 2015, Kelly James AMARILLO–  Texas property owners may be losing some protections when it comes to filing an insurance claim.A watchdog group has concerns about a bill making its way through the Texas legislature. Senate bill 1628 already passed the state senate. The house version will soon be debated. According to the group “Texas Watch”, if signed into law, it would make millions of individual and commercial insurance policies in Texas nearly worthless overnight. The bill’s author in the senate says the bill would help cut down on fraud. But, consumer groups says it does much more than that. In fact, they say it would take away many rights of the property owners. For instance, it would allow insurance companies to use deceptive practices to deny or delay claims. The executive director of Texas Watch, Alex Winslow, says the bill would also remove any penalties insurance companies are now forced to pay for using said deceptive practices. “The current form of Senate Bill 1628 insurance companies have incentive to cheat their home and business customers. We need to restore and preserve the rights of policy holders so that they can get paid in full and on time for their valid insurance claim.” Winslow said. Winslow says if it becomes law, insurance companies would be able to pay claims whenever they feel like because the penalties and interest would be eliminated.... Read More

Dallas Morning News: Don’t expect that a bill to restrict homeowner lawsuits will drive down your premiums

Don’t expect that a bill to restrict homeowner lawsuits will drive down your premiums April 30, 2015 Dallas Morning News, Jim Mitchell Your dog runs through your screen door and you expect your insurance company to pay for the door. That is an abuse of insurance. Bad apple roofers, adjusters and lawyers gin up excessive litigation. That also is an abuse of insurance. But when there is a truly catastrophic event, a hail-damaged roof, for instance, homeowners must have an avenue of recourse if they feel that their insurer is shortchanging them. Homeowners should be concerned that Sen. Larry Taylor, R-Friendswood, is spearheading legislation that would make it more difficult for homeowners to challenge their insurance company. Taylor says the problem is a “storm of litigation” from homeowners in the wake of Hurricane Ike in 2008 and has worsened as homeowners file expensive claims for hail damage. He says across the state, a rise fueled in part by shady roofers, adjusters and lawyers. He defends his bill in this statement on his website. I get it in the abstract. I have no problem with a crackdown on abuses caused by shady roofers, adjusters and lawyers who plaintiff shop. But let’s scale this back a step or two. Texas remains a profitable state for insurers despite the state’s location in the eye of Mother Nature’s hurricanes, tornadoes and hailstorms. In other words, we don’t have an insurance crisis in Texas because insurers still see this as a highly profitable market with pro-insurance regulations and healthy profit margins. Taylor’s bill, SB 1628, will not result in a rollback in premiums. It will result in higher profit margins for insurers and block people with legitimate claims from pursuing those claims. Clearly, financial solvency keeps insurers in Texas, and that has merit for consumers for going naked. But let’s not pretend that this bill will lower homeowner premiums or make insurers more willing to honor claims without a... Read More

WFAA: Bill could gut protections against insurance companies

Bill could gut protections against insurance companies April 30, 2015 WFAA, David Schechter Consumer protection advocates say Texas lawmakers want to strip a consumer’s right to sue insurance companies in cases where an insurance company unfairly denies paying a claim. Lawmakers behind the bill say they’re trying to stop lawsuits against insurance companies by scammers who come in after a major storm and sue over bogus or inflated claims. It’s exactly the kind of consumer protection against an insurance company that Cheryl Demarco said she needed. In 2012 a massive hail storm chewed up the 100,000 square foot roof over her indoor sports complex in Rockwall, called RISE. Reporter David Schechter shows us how the proposed legislation could hurt small business that pay for insurance but may not be able to use it when they need it most. Under a leaky roof, her business was suffering. “We had to shut games down,” Demarco said. A roofer estimated her damage at over $500,000 dollars. But, she says, an adjuster representing her insurance company estimated there was zero damage– without even coming out to look. “He didn’t even come out,” Demarco said. “Not, initially. No,” she added. Demarco sued, taking advantage of Texas’ consumer protection laws, and won. The terms are confidential. Now, her lawyer, Linda Dedman, says proposed legislation in Austin, called Senate Bill 1628, would gut a consumer’s right to sue insurance companies and adjusters who act in bad faith. “It was actually conceived of and introduced by the insurance industry,” Dedman said about the bill. Supporters of the bill say it would stop a cottage industry of scammers who flood in after a storm trying to take advantage of insurance companies. The bill is sponsored by Republican Senator Larry Taylor, from the Houston area – who is an insurance agent. His office did not respond to our request for a comment. Attorney Dedman says she believes Taylor is beholden to the insurance industry. “That’s where he earns his livelihood and that’s where he gets a lot of his campaign contributions,” said Dedman. Dallas-area Senator Don Huffines supports the legislation. In a statement, he writes: “When overzealous trial lawyers abuse the system, it forces premiums higher and burdens all consumers. (This bill) will help keep a few greedy lawyers from driving insurances prices up for Texas homeowners.” But the way Demarco sees it, when your business is suffering because your roof is leaking that expecting an insurance company to... Read More

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