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Austin American Statesman: Insurance bill seeks to curb lawsuits, worries consumer groups

Insurance bill seeks to curb lawsuits, worries consumer groups April 30, 2015 Austin American Statesman, Tim Eaton A redux rumble between the trial lawyers and the tort reformers is getting heated these days at the Capitol. In the past, the Texas Trial Lawyers Association and Texans for Lawsuit Reform have fought viciously over windstorm cases, but now they have found a new source of animosity: insurance claims over hail damage and legislation that could shield insurance companies from lawsuits. Each chamber has a version of the legislation. In the House, state Rep. John Smithee, R-Amarillo, is carrying House Bill 3646, but it remains in committee. In the Senate, state Sen. Larry Taylor, R-Friendswood, is further along in the process after his chamber approved Senate Bill 1628 on Thursday. The bills’ authors have said the measures were designed to prevent increases in property insurance premiums that could follow excessive and frivolous lawsuits stemming from hail damage claims. Consumers “are going to pay a whole lot more for insurance” if the bill doesn’t become law, Taylor said. Sherry Sylvester, a spokeswoman for Texans for Lawsuit Reform, lauded Taylor’s bill in a written statement, saying it “will stop the latest wave of lawsuit abuse in Texas – storm-chasing trial lawyers who go from hailstorm to hailstorm manufacturing lawsuits for attorney fees.” Complaints to the Texas Department of Insurance are at an all-time low, but the number of lawsuits is increasing and the damages being sought have been more than the original claims, Sylvester said. Taylor, Texans for Lawsuit Reform and the insurance industry all have been critical this session of trial lawyers, including Houston attorney Steve Mostyn, who is often seen as the face of the Texas plaintiffs’ bar. Mostyn and his firm have sued the Texas Windstorm Insurance Association for hundreds of millions of dollars over damage caused by Hurricane Ike in 2008. He also filed about 1,000 hail cases — or about a fifth of the total — in Hidalgo County after a 2012 storm. Mostyn said he hasn’t testified on the legislation and hasn’t been very active in the legislative process this session. “I think the bill is horrible for businesses and consumers here,” he said, “but I am not the front on this.” For their part, trial lawyers and other opponents have accused Taylor of creating burdensome requirements for would-be plaintiffs and for unfairly giving immunity to insurance agents and adjusters. The result, lawyers say, is stranding consumers... Read More

Texas Tribune: Senate Bill Makes It Harder to Sue Insurers

Senate Bill Makes It Harder to Sue Insurers April 30, 2015 Texas Tribune, Jay Root & Julian Aguilar A controversial bill that would make it harder for homeowners and companies to recover certain damages from their insurance companies — cheered by the insurance industry and criticized by liberal groups and some businesses — cleared the Texas Senate on Thursday. Senate Bill 1628 by state Sen. Larry Taylor, R-Friendswood, would make broad changes to the way homeowners and businesses can sue insurance companies that don’t deal with them fairly, or don’t adequately pay out on claims made under property and casualty insurance policies, such as losses after a storm, fire or accident. The bill would establish a two-year time limit on seeking claims. And before being allowed to sue for deceptive acts or unfair claims handling, policyholders would have to provide advance written notice, sign a statement attesting that damages occurred and show proof of damages. It would also offer certain new immunity protections to insurance agents and adjusters who are named in lawsuits. And the bill would lower the penalty that insurance companies face for late payments. Democrats and trial lawyer-backed groups have adamantly opposed the measure, arguing that it takes away property owner rights that have been enshrined in Texas insurance law for decades. “It expressly immunizes wrongdoers,” said state Sen. Kirk Watson, D-Austin. “That means a Texan who was wronged by their insurance adjuster or an insurance agent would be in a position of not being able to hold them accountable.” Insurance company interests and groups favoring lawsuit restrictions say the bill is needed to rein in abuses by trial lawyers seeking to cash in after catastrophic events, such as when storms hit the coast or hail pounds West Texas. Bill author Taylor said his legislation would stop storm-chasing trial lawyers while keeping premiums low for property owners. “Some unscrupulous contractors, public adjusters and case runners troll entire neighborhoods to solicit lawsuit clients,” he said. “This unethical behavior makes millions of dollars off the backs of unaware consumers who see their deductibles and premiums rise after a weather catastrophe hits.” Taylor said he’s heard of claims that should have been as simple as a new roof ballooning to more than $125,000. Bad actors go “venue shopping” for courts or judges inclined to side with the plaintiffs, he said. “There were people who should not be being sued, sued just to get the lawsuit into certain venues,” Taylor said during floor debate on Wednesday. Critics... Read More

Express-News: Texas home insurers see healthy profits in 2014

Texas home insurers see healthy profits in 2014 April 21, 2015 San Antonio Express-News DALLAS (AP) — Texas home insurers saw a third straight year of healthy profits in 2014 due to higher rates and fewer severe storms across the state. But The Dallas Morning News (http://bit.ly/1FaCKoT ) reports a rising tide of lawsuits filed by homeowners in recent years has companies worried that more could be on the way. The industry seeks legislation that would curb homeowners’ ability to sue insurers for unpaid claims or unfair practices. State insurance department records show though that those lawsuits didn’t hurt companies’ bottom line last year, but Mark Hanna of the Insurance Council of Texas says the number of lawsuits against insurers has been “off the charts” in recent years and companies are worried that more are on the way. Hanna says actual damage to roof in McAllen caused by hail and wind was estimated to be $250 million, but the figure swelled to almost $600 million because of lawsuits filed by homeowners. “Here we are with insurance companies posting extremely healthy profits for three straight years and four of the last five years,” said Alex Winslow of Texas Watch, a consumer group active in insurance issues. “Insurance companies already hold all of the cards, and now they want to stack the deck against policyholders with valid claims.” Insurers paid out an average 46.4 percent of their premiums to cover property losses in 2014. Rates of 60 percent or lower are considered a good target for profitability, and most large companies hit that benchmark last year.... Read More

Dallas Morning News WATCHDOG: Watchdog: Texas insurance lobbyists have a plan you won’t like

Watchdog: Texas insurance lobbyists have a plan you won’t like April 20, 2015 Dallas Morning News, Dave Lieber The Watchdog wants you to know that the insurance industry is trying to slide something slick through the Texas Legislature toward Gov. Greg Abbott’s signing pen that’s designed to pay you smaller insurance claims. How? By making it much harder for people with all kinds of insurance policies to use their rights to win deserved financial settlements in court. That’s not how the bill’s author explains it. Sen. Larry Taylor, R-Friendswood, who owns Truman Taylor Insurance Agency, claims this is pro-consumer. Taylor said last week in a hearing for his Senate Bill 1628 that he wants to stop the march of lawyers and public adjusters who contact potential customers and offer to help file lawsuits against insurance companies. The result of this solicitation for business, the senator claims, is that 1 of every 3 catastrophic claims in Texas ends up in court. He warns that if his bill doesn’t pass, insurance companies will cut back their coverage offerings. “We need to take care of the consumers on this,” Taylor said. Ha. No, make that a double: ha-ha. Texas Watch, a nonpartisan insurance watchdog, warns that Taylor’s bill is priority one in 2015 for the industry because, if passed, it would “succeed in stripping policyholders of their ability to force fair, timely payments,” says the group’s executive director, Alex Winslow. If a company fails to pay in a timely way, it faces penalties under laws that have been around for decades. Taylor’s bill, Texas Watch warns, promotes low-ball settlement offers, makes insurance company adjusters unaccountable for their actions and restricts the time allowed to file claims. The bill also creates “gotcha” provisions that allow insurers to easily deny claims, Texas Watch says. A thin line separates consumers’ rights from annihilation, and this is the thin line. In this case the line was marked at the hearing by two state senators, both lawyers, who understood the layers beneath the anti-litigation spin given by the bill’s author. Sens. Kirk Watson, D-Austin, and Rodney Ellis, D-Houston, chewed up Taylor’s bill with legal questions that nonlawyer Taylor couldn’t answer. “Obviously, I did not draft this,” Taylor said at one point about his bill. Later, The Watchdog asked Taylor’s office who did write the bill. No answer. Taylor also declined an interview request. His office issued a statement that said, in part: “SB 1628 is a consumer... Read More

DMN: Texas home insurers see another strong year but still seek limits on lawsuits

Texas home insurers see another strong year but still seek limits on lawsuits April 20, 2015 Dallas Morning News, Terrence Stutz AUSTIN — Texas home insurers, led by the three largest companies, racked up a third straight year of healthy profits in 2014, thanks to higher rates and low levels of stormy weather across the state. But the industry is still seeking legislation that would curb the ability of homeowners to sue insurers for unpaid claims or unfair practices. Industry representatives contend the changes are needed to protect companies from a rising tide of lawsuits filed by homeowners, particularly for hail-damaged roofs. Such lawsuits didn’t hurt insurers’ bottom line last year, premium and loss numbers filed with the Texas Department of Insurance show. Overall in 2014, insurers paid out an average 46.4 percent of their premiums to cover property losses. That figure, known as the “loss ratio,” was slightly higher than in the previous year, but still reflected a good profit margin for most insurers. A loss ratio of 60 percent or lower is considered a good target for profitability, and almost all large companies hit that benchmark in 2014. “Here we are with insurance companies posting extremely healthy profits for three straight years and four of the last five years,” said Alex Winslow of Texas Watch, a consumer group active in insurance issues. “Insurance companies already hold all of the cards, and now they want to stack the deck against policyholders with valid claims.” Mark Hanna of the Insurance Council of Texas, an industry group, said the number of lawsuits against insurers in recent years is “off the charts” and has companies worried that more could be on the way. In McAllen, he said, an estimated $250 million in actual damage to roofs caused by hail and wind swelled to almost $600 million recently because of lawsuits filed by homeowners. Few storms in 2014 Regarding the recent financial fortunes of insurers, Hanna noted that Texas last year had no hurricanes and “the lowest number of tornadoes ever recorded” — which also meant fewer damaging hailstorms. “It is an up-and-down business. We have good years and bad years,” he said, citing two bad years — 2008, when Hurricanes Ike and Dolly slammed the Texas coast, and 2011, when two destructive wind and hail storms hit the Dallas-Fort Worth area just six weeks apart. Both years saw massive property losses. State Farm, the largest property insurer in Texas, showed a... Read More

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