San Angelo Standard-Times: Bill that could make it harder to sue insurers advances

Bill that could make it harder to sue insurers advances

May 19, 2015

San Angelo Standard-Times, Matthew Waller

AUSTIN — A controversial insurance bill — which supporters say protects insurers from over-suing after events such as hail storms — is advancing through the Legislature as the end of the session fast approaches.

Beaman Floyd, executive director of the Texas Coalition for Affordable Insurance Solutions, has been supportive of the bill and its intent to stamp out too many frivolous lawsuits.

However, Floyd said, “We do have some concerns about the current iteration of the bill,” Senate Bill 1628, from Sen. Larry Taylor, R-Friendswood.

For example, he believes certain individual appraisers should have more protection from getting sued individually, instead directing suits more toward the company.

The bill was voted on in a committee meeting that was not recorded on camera, like the vast amount of committee meetings, and got a 6-3 vote in the House Insurance Committee.

According to insurance industry reports, about 1 percent of insurance cases traditionally have gone to court, Taylor has said. But recently in the wake of the hail storms, that percentage went to about 30 percent.

He argued that people are soliciting for lawsuits, signing homeowners up simply by asking, “Were you affected by hail?”

After two storms in Hidalgo County in 2012, 22 percent of the claims became lawsuits, the Texas Coalition for Affordable Insurance has noted.

Attorney Ernest Martin Jr. of international law firm Haynes and Boone wrote a letter to the Texas Senate warning senators of “unintended consequences.”

“I write to express my deep concern and opposition to Senate Bill 1628. While I appreciate the sponsor’s intent in introducing this bill, namely, to address perceived abuses in pursuing hailstorm claims, the bill goes way beyond this intent and instead has many unintended consequences which will significantly harm Texas business interests.”

Policyholders might largely lose out on recovering certain costs and legal damages, detractors have noted.

Current law includes an 18 percent interest payment against insurance companies for underpaying claims, but the bill might let the companies avoid the penalty.

The AARP, an organization that advocates for retirees, planned to protest the bill with phone calls and social media postings, according to a release. The group also is concerned about negating the 18 percent interest payment by only making part of it payable.

“It’s wrong to punish honest people who’ve already been victimized by weather-related catastrophes … again,” AARP Texas state director Bob Jackson said in a release. “This is not how you deal with any excesses in the system or bad apples in the bunch.”

Matthew Waller covers state news as the Austin Bureau chief. Contact him at and follow him on Twitter @waller_matthew.