Valid Concerns on Valid Claims
The threat to property owners filing insurance claims in the wake of Hurricane Harvey is real. Earlier this year, the Texas Legislature passed HB 1774, which reduces incentives for insurance companies to pay claims on time and in full. More aptly referred to as the Blue Tarp Bill, the legislation prolongs the rebuilding process for communities and keeps blue tarps on roofs longer. On September 1, the bill will go into effect and our insurance laws will be changed for the worse. Those affected by Harvey who file their property insurance claims before September 1 will be protected by stronger penalties on insurers that delay valid property claims. Those who file their valid property claims on or after September 1 will see those penalties reduced from 18% to a floating rate currently set at 10%, slashing accountability measures for bad-acting insurers by almost half. (See bill text below.) While many flood claims and wind claims along the coast will not be affected by this particular law, the Blue Tarp Bill will hurt many Texans rebuilding after Harvey.
This spring, we asked Governor Abbott to veto the Blue Tarp Bill. (Read the full letter detailing our many concerns here.) Texans sent over 2,400 petitions asking him to fight for Texas policyholders, not the big insurance companies. Unfortunately, the governor signed the bill into law on May 26.
Our deepest sympathies are with those affected by Harvey. We hope that every insurance company honors their promise and pays all claims on time and in full, but it takes strong laws to force insurance companies to do the right thing, and our laws have been weakened. For those Texans who may have to hold their insurance company accountable in court, we fear this natural disaster is going to be compounded by the man-made disaster of dangerous laws that make it harder to fight insurance companies when they wrongfully deny, delay, or underpay valid claims.
It is our duty to educate the public, and we will work to keep Texans informed about how they can help themselves as they put their lives back together. Those affected by Harvey can learn more about how to help themselves and their families in these trying times here. Our fellow Texans deserve nothing less than the best information, and we will do everything in our power to get it to them.