Texas is still being deluged by Harvey, now a tropical storm, as forecasters say more rain is on the way. Those in areas, like Houston, which sustained massive damage from Hurricane Harvey, must now brace for more challenges as a new insurance law will soon take effect that could add insult to some very real and costly injuries. This Friday, September 1, House Bill 1774, nicknamed the Blue Tarp Bill, becomes law. Claims filed against homeowners insurers before Friday are exempt from the Blue Tarp Bill; those filed on or after Friday will fall under the new law. This is bad news for homeowners who are already facing more bad news – in the form of massive property damage – than anyone should face.
Texas is still being deluged by Harvey, now a tropical storm, as forecasters say more rain is on the way. Those in areas, like Houston, which sustained massive damage from Hurricane Harvey, must now brace for more challenges as a new insurance law will soon take effect that could add insult to some very real and costly injuries. This Friday, September 1, House Bill 1774, nicknamed the Blue Tarp Bill, becomes law. Claims filed against homeowners insurers before Friday are exempt from the Blue Tarp Bill; those filed on or after Friday will fall under the new law. This is bad news for homeowners who are already facing more bad news – in the form of massive property damage – than anyone should face.
What exactly does H.B. 1774 do? Justinian C. Lane of Justinian & Associates said, “Sadly, this is just another example of the screw-the-consumer attitude taken by the Texas Legislature. Lessening the penalties for denying or delaying the payment of claims will have one result: More claims will be improperly denied or delayed. It’s unfortunate that this bill took effect when it did, but perhaps the coincidence will be noteworthy enough that consumers will notice that their representatives don’t have their best interest at heart. My heart, however, goes out to the thousands of people whose lives have been affected by this hurricane, and whose lives will sadly be affected by unethical insurance companies.”
According to Texas Watch, a citizen advocacy group “dedicated to ensuring that insurance companies and other corporations are accountable to their customers,” the state’s homeowners insurers have outperformed their counterparts across the country in terms of profits for three years.
At its core, the Blue Tarp Bill is nothing more than a “get out of jail free” card for insurers who try to get out of paying legitimate claims by acting in bad faith. Insurers are businesses and businesses care about profits. For every claim paid, the insurers’ profits fall; this is why they don’t like to pay. The companies get around writing checks in a variety of ways, ranging from denying claims to delaying or underpaying claims. They have a whole host of methods at their disposal, including:
- Delaying or denying your compensation without a good reason
- Failing to react promptly and reply to your claim
- Not performing a proper and thorough investigation of your damages
- Trying to get you to settle for less than your damages cost
- Neglecting to tell you that there is an appeals process for denied claims
- Not explaining why they denied or underpaid your claim
- Making it unnecessarily difficult for you to provide the documentation for your claim or asking for things that aren’t necessary
- Intimidating you through harassing investigative methods
The current law allows homeowners to take action against insurers acting in bad faith. The Blue Tarp Bill severely limits the actions an insurer can take. It also drastically limits the penalties insurers face for acting in bad faith.
Currently, homeowners may collect an interest penalty of 18% of their claim if their insurer delays paying a valid claim. The Blue Tarp Bill does away with this, replacing it with a simple interest penalty that is much less than 18%.
According to Texas Watch, H.B. 1774 also “forces many insurance cases into our backlogged and understaffed federal courts, where it takes twice as long to receive justice; imposes additional costs on property owners; and may make it harder for them to find a lawyer willing to take their case. It does nothing to ensure property claims related to weather are paid on time or in full, meaning it effectively punishes homeowners and business owners in our state. Bottom line, it is a bill that insurance industry lobbyists wanted, and the Texas Legislature and Governor Abbott gave it to them.”
What does Gov. Abbott have to say? According to an article in the New York Times, he called Harvey “one of the largest disasters America has ever faced.” He went on to warn “against expecting anything resembling recovery any time soon, or a return to the way things were,” and closed with, “We need to recognize it will be a new normal, a new and different normal for this entire region.” Indeed, it will be. And, thanks to the Blue Tarp Bill, that “new and different normal” could look a lot like New Orleans in the wake of Katrina, if insurers aren’t forced to honor the policies from which they profit.
Without prompt and full payment of legitimate claims, Texans who suffered property damage from Harvey will have a difficult time rebuilding. If insurers try to weasel out of paying, say by lowballing a claim and offering seventy-five cents on the dollar, homeowners will pay the price. As Texas Watch points out, homeowners “can’t put on 75% of a roof.” Under H.B. 1774, the insurers are no longer being incentivized, through large penalties, to pay the full value of claims.
What can you, as a homeowner, do?
The Texas Department of Insurance (TDOI) offers these helpful suggestions:
- “Call your insurance agent or company as soon as possible to report property damage. For help with company contact information, use Company Lookup or call our Consumer Help Line at 1-800-252-3439. Keep a record of everyone you talked to with your company. Be prepared to answer questions about the damage. If you need financial help, ask your agent about an advance payment.
Note: Read TDI’s statement about deductibles after a storm. - File a claim. Follow the call immediately with a written claim to protect your rights under Texas’ prompt-pay law.
- If you have a separate wind and hail policy with the Texas Windstorm Insurance Association, report claims at 1-800-788-8247.
- If you have a flood policy with the National Flood Insurance Program, report any flood damage to your insurance agent or adjuster.
- Contact your auto insurance company if your car was damaged by a storm and you have comprehensive coverage.
- Ask your agent about living expenses. Most insurance policies will cover some of the costs you have if you are unable to live in your home because of damage that is covered by your insurance. Check with your insurance company about coverage for living expenses, and keep your receipts for these costs.
- Make a list of your damaged property. Take pictures and videos of the damage if possible. Don’t throw away damaged items until your insurance adjuster has seen them.
- Remove standing water and dry the area as soon as possible. Move water-soaked items to a dry, well-ventilated area. If you must move items outdoors, put them in a secure area to protect them from theft.
- Make repairs needed to protect your home and property from more damage. Cover broken windows and holes to keep rain out. Don’t make permanent repairs until instructed by your insurance company. Keep a record of how much you spend on repairs and save all receipts.
- Contact the Red Cross or FEMA for help. If you need shelter or emergency food or water, contact the Red Cross at 1-800-733-2767. If you’re not insured and need financial help, call FEMA at 1-800-621-3362 to see what help is available.
Justinian & Associates has also provided a sample hurricane Harvey insurance claim letter to preserve your rights as an insured.
It’s also advisable to contact a lawyer who can help, not only with the filing process, but with any post-filing issues. As Amber Pang Parra of Justinian & Associates said, “I reviewed the Blue Tarp Bill and it may prevent some attorneys from helping people with potentially smaller claims or lower property values. I am also worried that this could disproportionately affect the most vulnerable population, the elderly and those with lower incomes, keeping them from getting representation in times of need. It could also make the claims process take much longer by allowing insurance companies to pull claims in litigation into Federal courts.”
For more information on the claims process, what you must do, and things to beware of, please visit this site.
It is vital that you file your claim before September 1, 2017! That means no later than August 31! Consider sending the claim by overnight mail (guaranteed next day delivery) no later than August 30, 2017, scan and email the claim to the company’s email address for claims by August 31, 2017, or fax the claim to the insurance company by August 31, 2017.
Be sure you obtain confirmation from any overnight carrier that the letter will be delivered tomorrow. Some overnight delivery companies are presently unable to provide one-day delivery because of the storm.
Don’t delay in getting your claims filed, or you could lose out on much-needed funds to repair and rebuild.
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