You deserve the truth.Claiming there is a hail storm lawsuit “crisis,” insurance lobbyists are pushing SB 10 and HB 1774. But, what do these bills actually do?
They gut long-standing provisions that help individuals and businesses resolve disputes with their insurance company. They affect all weather related property insurance claims – not just hail claims. They allow insurance companies to escape accountability.
ARE THESE BILLS REALLY JUST ABOUT HAIL STORM LAWSUIT ABUSE?
These bills impact all disputes with your insurance company – not just hail claims and not just claims considered “frivolous.”
While insurance lobbyists are spinning these bills as “hail storm” insurance legislation that addresses “lawsuit abuse,” the bills actually affect ALL weather related property insurance claims.
IS THE TEXAS INSURANCE MARKET PROFITABLE AND COMPETITIVE?
The Texas insurance market is incredibly robust, increasingly competitive, and highly profitable, according to TDI.
Between 2012 and 2015 – the period insurance lobbyists say was a “crisis” for Texas insurance companies – insurers posted $4.5 Billion in underwriting profits. This equals 13.6% profit just on premium payments and does not include additional market gains. This is significantly higher than the 16-year average.
IS THERE AN INSURANCE LITIGATION CRISIS IN TEXAS?
Despite a series of catastrophically severe hail storms in recent years, data from TDI’s comprehensive market review shows that insurer losses were only marginally higher with persistently low litigation rates.
From 2012 to 2015, hail losses increased a mere 2 cents per $1 of premium. Additionally, the litigation rate on disputed home insurance claims has fallen from 2.7% in 2012 to just 0.7% in 2015.
Following extreme weather events with major property damage like those in the Rio Grande Valley, the Panhandle, the Metroplex, and Bexar County in recent years, more claims are filed. This leads to more disputes as insurers attempt to cut their losses by paying fewer claims. In fact, the TDI data indicates that between 2012 and 2015 insurers paid 9% fewer hail claims per 100 policies.
CAN INSURANCE COMPANIES ALREADY DISMISS “FRIVOLOUS” CLAIMS?
Current law gives insurance companies ample tools to address fraud, including civil penalties and sanctions for attorneys and public insurance adjusters, as well as criminal action.
As with any profession, some bad actors may cut corners when bringing claims. That’s why the Legislature has been justifiably tough on barratry. As a result, law firms caught engaging in this despicable practice have been shut down and public adjusters have been curtailed. In 2015, lawmakers enacted tough new laws to clamp down on public adjusters who engage in barratry. As a result, public adjuster license renewals have dropped dramatically, indicating that bad actors are fleeing the market.
And, in cases of fraud, insurers can recoup their costs.