IF YOU HEARD THAT FILING YOUR CLAIM AFTER 9/1/2017 WAS A PROBLEM, READ THIS
There has been a huge amount of misinformation circulating on social media about the impact of House Bill 1774 (the hailstorm bill) as it relates to the catastrophic events we are experiencing due to Hurricane Harvey. Our friends at TSLA put out a good explanation of accurate information to help spread the right facts, so we will copy their explanation here. You can communicate this to your insureds to reassure them in these trying times:
HB 1774 does not change the insurance claims process. A person making a claim with their insurance company after September 1, 2017 will go through the same process as a person making a claim before September 1, 2017.
The new law applies only to a lawsuit that is filed against an insurance company by a policyholder when the policyholder's insurance claim is not timely paid or is underpaid, or when the insurance company acts in bad faith in dealing with the policyholder's claim.
Lawsuits are the exception, not the rule. The vast majority of Texans will go through the regular insurance claims process without needing to file a lawsuit.
Texans continue to have the strongest consumer protections in the nation against insurance companies. This includes the full recovery of amounts owed under an insurance policy, plus penalty interest, court costs, and attorney fees. Additionally, if the insurance company acts fraudulently or in bad faith, Texans may recover triple the amount of their actual damages, which is unchanged by the new statute.
The primary purpose of the new statute is to require written notice of a dispute before a lawsuit is filed. If a lawsuit is filed, it would happen months or years after the initial claim was made with the insurance company. Nothing in the new law passed by the Legislature earlier this year requires that the initial insurance claim be made in writing or by a specific date.
Furthermore, the new law will not apply to most claims or lawsuits arising from Harvey, because most of the policyholders' claims will be for damage caused by flooding. These claims will be made under the federal flood insurance program and governed by federal law.
Similarly, the new law will not apply to lawsuits pursued against the Texas Windstorm Insurance Association (TWIA), which is subject to an entirely different statute governing post-disaster lawsuits. TWIA provides insurance for many people affected by Harvey.
The new law is designed to do two important things:
In sum, the new law does not affect the claims process. Instead, it affects only the lawsuits that sometimes follow the claims process. Furthermore, it does not create a new deadline for action by policyholders.
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