Gov. Greg Abbott Defends Insurance Law That Some Say Could Cost Harvey Victims Money

AUSTIN - Gov. Greg Abbott said Wednesday that he will not change the effective date of a new law that some lawyers worry will leave thousands of Harvey's victims shortchanged on their homeowners insurance claims."Any claims along those lines are absolutely bogus," Abbott said. "The implementation of this bill does not affect the ability of any policyholder to be able to file a claim or have that claim paid."Lawyers are urging waterlogged homeowners to file insurance claims before Friday to avoid losing out on important rights that lawmakers limited this year when they passed House Bill 1774. The new law reduces the amount of interest insurance companies will have to pay to homeowners if they take too long to pay for a claim. Currently, if a court finds that the company delayed payment, the company must pay the claim with 18 percent interest. The new law knocks the interest down to about 10 percent. The law also reduces the amount of attorney fees that homeowners can recover if they don't estimate with 80 percent accuracy the amount of damages done to their home when they file suit against the insurer.Insurance companies and their advocates say the measure was designed to limit lawsuit abuses while preserving protections for homeowners. Texans for Lawsuit Reform, a lead proponent of the law, said in a press release that few people would be affected by the measure because it only applies in the relatively small number of instances when a homeowner sues their insurance company. Abbott said homeowners should not worry about filing claims before the new law takes effect Friday."Property owners with covered damages maintain the same rights," he said, "whether they file a claim before or after Sept. 1."The governor referred to a statement from the Texas Department of Insurance, which reassured homeowners affected by Harvey that they would maintain the same rights to an insurance claim.Abbott said the new law simply "empowers policyholders to keep more money in pockets as opposed to paying more money to lawyers who may file their claim."Geoff Henley, a partner at Henley & Henley P.C., laughed hysterically at Abbott's claim the law would save homeowners money."That isn't merely laughable, that is viscerally risible," he said.Lawyers and consumer advocates contend the new law will make it harder to hold insurance companies accountable when they take months or years to pay for a claim, underpay or wrongfully deny legitimate claims. They agree with Abbott and the insurers that the law applies to only lawsuits. But in order to preserve current legal protections if they need to later sue their insurer, a homeowner must file their claim before the new law takes effect Sept. 1."When they take the teeth out of the law, the consumer loses," said Henley. "Carriers pay people because the alternative is worse, not because they're charitable."About 29,000 people signed onto an online petition effort calling on lawmakers to hold a special legislative session to delay the law's implementation.Initial estimates began trickling in Wednesday from 66 of the cities and counties affected by Harvey's catastrophic wind and rain show that nearly 49,000 homes have been damaged or destroyed. Those numbers, likely the very tip of an enormous iceberg, don't even include some of the biggest counties that sustained a direct hit when Hurricane Harvey slammed ashore last week.State Farm Insurance, the biggest insurer in Texas, reported fielding more than 27,000 claims by Wednesday.An early report from the property information firm CoreLogic projected that as many as 232,721 homes could be lost, causing almost $40 billion in damage. Moody's Analytics estimates that Harvey could cause up to $65 billion in property damage overall.Henley said homeowners who can should photograph damage to their property and file claims in writing before Friday. Set up an appointment with an insurance adjuster as soon as possible, he recommended, and always get a second opinion on the value of the damage to the home."The statute they have passed is absolutely going to make it easier for insurance companies to drag their feet, low-ball people and sit back and do nothing," he said. "There are going to be people in really desperate straights six months from now. I sincerely doubt [Abbott] will be so glib then."  Continue reading...