Aug 282017
 

Recently, our legislator’s found it within their own best interest to reduce the penalties insurers pay when they are caught dirty dealing on your insurance claim. Yes, you read that correctly. Not on a good day, but a day when they are caught, red handed.

 

As a licensed Public Insurance Adjuster, I deal with this on an hourly basis. Every claim, every time. Insurers do what they have the unique ability to do… say no. Regardless of whether it is right or wrong. No. Pretty simple way to earn money, especially when your lobbyist have bought the entire legislative body, either directly or indirectly. (Most of our legislators are investors who own stocks in things like, well… #insurance. So, when the stock does well, so do they. Claims are bad for stocks, especially when they have to pay full amounts, or get penalized for not paying when they were supposed to, or what they were supposed to, normally both.)

 

The result is legislation that was passed against the many, many business leaders and homeowners who protested it, and is now becoming a very real problem for anyone who files any type of claim in Texas.

In a nutshell, they have reduced penalties by nearly half, reduced the amount that can be recovered, and reduced/limited attorney fees. Again, this is not on a good day, but a day when they are actually caught. It is like telling your 4-year-old that stealing a cookie was bad, and as a punishment, she was getting 2 more cookies…

 

Here is the bill: Located at Texas Legislature Online

Or read it here:

85R20435 LED-F
By: Bonnen of Galveston, Lucio III, Parker, H.B. No. 1774
    Frullo, Phillips, et al.
Substitute the following for H.B. No. 1774:
By:  Phillips C.S.H.B. No. 1774
A BILL TO BE ENTITLED
AN ACT
relating to actions on and liability associated with certain
insurance claims.
       BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
       SECTION 1.  Section 541.156(a), Insurance Code, is amended
to read as follows:
       (a)  A person who receives notice provided under Section
541.154 or 542A.003 may make a settlement offer during a period
beginning on the date notice under Section 541.154 or 542A.003 is
received and ending on the 60th day after that date.
       SECTION 2.  Section 542.060, Insurance Code, is amended by
amending Subsection (a) and adding Subsection (c) to read as
follows:
       (a)  Except as provided by Subsection (c), if [If] an insurer
that is liable for a claim under an insurance policy is not in
compliance with this subchapter, the insurer is liable to pay the
holder of the policy or the beneficiary making the claim under the
policy, in addition to the amount of the claim, interest on the
amount of the claim at the rate of 18 percent a year as damages,
together with reasonable and necessary attorney’s fees. Nothing in
this subsection prevents the award of prejudgment interest on the
amount of the claim, as provided by law.
       (c)  In an action to which Chapter 542A applies, if an
insurer that is liable for a claim under an insurance policy is not
in compliance with this subchapter, the insurer is liable to pay the
holder of the policy, in addition to the amount of the claim, simple
interest on the amount of the claim as damages each year at the rate
determined on the date of judgment by adding five percent to the
interest rate determined under Section 304.003, Finance Code,
together with reasonable and necessary attorney’s fees.  Nothing in
this subsection prevents the award of prejudgment interest on the
amount of the claim, as provided by law. Interest awarded under
this subsection as damages accrues beginning on the date the claim
was required to be paid.
       SECTION 3.  Subtitle C, Title 5, Insurance Code, is amended
by adding Chapter 542A to read as follows:
CHAPTER 542A.  CERTAIN CONSUMER ACTIONS RELATED TO CLAIMS FOR
PROPERTY DAMAGE
       Sec. 542A.001.  DEFINITIONS. In this chapter:
             (1)  “Agent” means an employee, agent, representative,
or adjuster who performs any act on behalf of an insurer.
             (2)  “Claim” means a first-party claim that:
                   (A)  is made by an insured under an insurance
policy providing coverage for real property or improvements to real
property;
                   (B)  must be paid by the insurer directly to the
insured; and
                   (C)  arises from damage to or loss of covered
property caused, wholly or partly, by forces of nature, including
an earthquake or earth tremor, a wildfire, a flood, a tornado,
lightning, a hurricane, hail, wind, a snowstorm, or a rainstorm.
             (3)  “Claimant” means a person making a claim.
             (4)  “Insurer” means a corporation, association,
partnership, or individual, other than the Texas Windstorm
Insurance Association, engaged as a principal in the business of
insurance and authorized or eligible to write property insurance in
this state, including:
                   (A)  an insurance company;
                   (B)  a reciprocal or interinsurance exchange;
                   (C)  a mutual insurance company;
                   (D)  a capital stock insurance company;
                   (E)  a county mutual insurance company;
                   (F)  a farm mutual insurance company;
                   (G)  a Lloyd’s plan;
                   (H)  an eligible surplus lines insurer; or
                   (I)  the FAIR Plan Association.
             (5)  “Person” means a corporation, association,
partnership, or other legal entity or individual.
       Sec. 542A.002.  APPLICABILITY OF CHAPTER. (a) Except as
provided by Subsection (b), this chapter applies to an action on a
claim against an insurer or agent, including:
             (1)  an action alleging a breach of contract;
             (2)  an action alleging negligence, misrepresentation,
fraud, or breach of a common law duty; or
             (3)  an action brought under:
                   (A)  Subchapter D, Chapter 541;
                   (B)  Subchapter B, Chapter 542; or
                   (C)  Subchapter E, Chapter 17, Business & Commerce
Code.
       (b)  This chapter does not apply to an action against the
Texas Windstorm Insurance Association or to an action relating to
or arising from a policy ceded to an insurer by the Texas Windstorm
Insurance Association under Subchapter O, Chapter 2210. An action
against the Texas Windstorm Insurance Association or that relates
to or arises from a policy ceded to an insurer by the Texas
Windstorm Insurance Association under Subchapter O, Chapter 2210,
is governed by Chapter 2210.
       Sec. 542A.003.  NOTICE REQUIRED. (a) In addition to any
other notice required by law or the applicable insurance policy,
not later than the 61st day before the date a claimant files an
action to which this chapter applies in which the claimant seeks
damages from any person, the claimant must give written notice to
the person in accordance with this section as a prerequisite to
filing the action.
       (b)  The notice required under this section must provide:
             (1)  a statement of the acts or omissions giving rise to
the claim;
             (2)  the specific amount alleged to be owed by the
insurer on the claim for damage to or loss of covered property; and
             (3)  the amount of reasonable and necessary attorney’s
fees incurred by the claimant, calculated by multiplying the number
of hours actually worked by the claimant’s attorney, as of the date
the notice is given and as reflected in contemporaneously kept time
records, by an hourly rate that is customary for similar legal
services.
       (c)  If an attorney or other representative gives the notice
required under this section on behalf of a claimant, the attorney or
representative shall:
             (1)  provide a copy of the notice to the claimant; and
             (2)  include in the notice a statement that a copy of
the notice was provided to the claimant.
       (d)  A presuit notice under Subsection (a) is not required if
giving notice is impracticable because:
             (1)  the claimant has a reasonable basis for believing
there is insufficient time to give the presuit notice before the
limitations period will expire; or
             (2)  the action is asserted as a counterclaim.
       (e)  To ensure that a claimant is not prejudiced by having
given the presuit notice required by this chapter, a court shall
dismiss without prejudice an action relating to the claim for which
notice is given by the claimant and commenced:
             (1)  before the 61st day after the date the claimant
provides presuit notice under Subsection (a);
             (2)  by a person to whom presuit notice is given under
Subsection (a); and
             (3)  against the claimant giving the notice.
       (f)  A claimant who gives notice in accordance with this
chapter is not relieved of the obligation to give notice under any
other applicable law. Notice given under this chapter may be
combined with notice given under any other law.
       (g)  Notice given under this chapter is admissible in
evidence in a civil action or alternative dispute resolution
proceeding relating to the claim for which the notice is given.
       (h)  The giving of a notice under this chapter does not
provide a basis for limiting the evidence of attorney’s fees,
damage, or loss a claimant may offer at trial.
       Sec. 542A.004.  INSPECTION. Once notice is given under
Section 542A.003(a), a person to whom notice is given may send a
written request to the claimant to inspect, photograph, or
evaluate, in a reasonable manner and at a reasonable time, the
property that is the subject of the claim.
       Sec. 542A.005.  ABATEMENT. (a) In addition to taking any
other act allowed by contract or by any other law, a person against
whom an action to which this chapter applies is pending may file a
plea in abatement not later than the 30th day after the date the
person files an original answer in the court in which the action is
pending if the person:
             (1)  did not receive a presuit notice complying with
Section 542A.003; or
             (2)  requested under Section 542A.004 but was not
provided a reasonable opportunity to inspect, photograph, or
evaluate the property that is the subject of the claim.
       (b)  The court shall abate the action if the court finds that
the person filing the plea in abatement:
             (1)  did not, for any reason, receive a presuit notice
complying with Section 542A.003; or
             (2)  requested under Section 542A.004 but was not
provided a reasonable opportunity to inspect, photograph, or
evaluate the property that is the subject of the claim.
       (c)  An action is automatically abated without a court order
beginning on the 11th day after the date a plea in abatement is
filed if the plea:
             (1)  is verified and alleges that the person against
whom the action is pending:
                   (A)  did not receive a presuit notice complying
with Section 542A.003; or
                   (B)  requested under Section 542A.004 but was not
provided a reasonable opportunity to inspect, photograph, or
evaluate the property that is the subject of the claim; and
             (2)  is not controverted by an affidavit filed by the
claimant before the 11th day after the date the plea in abatement is
filed.
       (d)  An affidavit described by Subsection (c)(2)
controverting whether the person against whom the action is pending
received a presuit notice complying with Section 542A.003 must:
             (1)  include as an attachment a copy of the document the
claimant sent to give notice of the claimant’s action; and
             (2)  state the date on which the notice was given.
       (e)  An abatement under this section continues until the
later of:
             (1)  the 60th day after the date a notice complying with
Section 542A.003 is given; or
             (2)  the 15th day after the date of the requested
inspection, photographing, or evaluating of the property is
completed.
       (f)  If an action is abated under this section, a court may
not compel participation in an alternative dispute resolution
proceeding until after the abatement period provided by Subsection
(e) has expired.
       Sec. 542A.006.  ACTION AGAINST AGENT; INSURER ELECTION OF
LEGAL RESPONSIBILITY. (a) Except as provided by Subsection (h), in
an action to which this chapter applies, an insurer that is a party
to the action may elect to accept whatever liability an agent might
have to the claimant for the agent’s acts or omissions related to
the claim by providing written notice to the claimant.
       (b)  If an insurer makes an election under Subsection (a)
before a claimant files an action to which this chapter applies, no
cause of action exists against the agent related to the claimant’s
claim, and, if the claimant files an action against the agent, the
court shall dismiss that action with prejudice.
       (c)  If a claimant files an action to which this chapter
applies against an agent and the insurer thereafter makes an
election under Subsection (a) with respect to the agent, the court
shall dismiss the action against the agent with prejudice.
       (d)  If an insurer makes an election under Subsection (a)
but, after having been served with a notice of intent to take a
deposition of the agent who is the subject of the election, fails to
make that agent available at a reasonable time and place to give
deposition testimony, Sections 542A.007(a), (b), and (c) do not
apply to the action with respect to which the insurer made the
election unless the court finds that:
             (1)  it is impracticable for the insurer to make the
agent available due to a change in circumstances arising after the
insurer made the election under Subsection (a);
             (2)  the agent whose liability was assumed would not
have been a proper party to the action; or
             (3)  obtaining the agent’s deposition testimony is not
warranted under the law.
       (e)  An insurer’s election under Subsection (a) is
ineffective to obtain the dismissal of an action against an agent if
the insurer’s election is conditioned in a way that will result in
the insurer avoiding liability for any claim-related damage caused
to the claimant by the agent’s acts or omissions.
       (f)  An insurer may not revoke, and a court may not nullify,
an insurer’s election under Subsection (a).
       (g)  If an insurer makes an election under Subsection (a) and
the agent is not a party to the action, evidence of the agent’s acts
or omissions may be offered at trial and, if sufficient evidence
supports the submission, a jury may be asked to determine the
agent’s responsibility for claim-related damage caused to the
claimant.  To the extent there is a conflict between this subsection
and Chapter 33, Civil Practice and Remedies Code, this subsection
prevails.
       (h)  If an insurer is in receivership at the time the
claimant commences an action against the insurer, the insurer may
not make an election under Subsection (a), and the court shall
disregard any prior election made by the insurer relating to the
claimant’s claim.
       (i)  In an action tried by a jury, an insurer’s election
under Subsection (a) may not be made known to the jury.
       Sec. 542A.007.  AWARD OF ATTORNEY’S FEES. (a) Except as
otherwise provided by this section, the amount of attorney’s fees
that may be awarded to a claimant in an action to which this chapter
applies is the lesser of:
             (1)  the amount of reasonable and necessary attorney’s
fees supported at trial by sufficient evidence and determined by
the trier of fact to have been incurred by the claimant in bringing
the action;
             (2)  the amount of attorney’s fees that may be awarded
to the claimant under other applicable law; or
             (3)  the amount calculated by:
                   (A)  dividing the amount to be awarded in the
judgment to the claimant for the claimant’s claim under the
insurance policy for damage to or loss of covered property by the
amount alleged to be owed on the claim for that damage or loss in a
notice given under this chapter; and
                   (B)  multiplying the amount calculated under
Paragraph (A) by the total amount of reasonable and necessary
attorney’s fees supported at trial by sufficient evidence and
determined by the trier of fact to have been incurred by the
claimant in bringing the action.
       (b)  Except as provided by Subsection (d), the court shall
award to the claimant the full amount of reasonable and necessary
attorney’s fees supported at trial by sufficient evidence and
determined by the trier of fact to have been incurred by the
claimant in bringing the action if the amount calculated under
Subsection (a)(3)(A) is:
             (1)  greater than or equal to 0.8;
             (2)  not limited by this section or another law; and
             (3)  otherwise recoverable under law.
       (c)  The court may not award attorney’s fees to the claimant
if the amount calculated under Subsection (a)(3)(A) is less than
0.2.
       (d)  If a defendant in an action to which this chapter
applies pleads and proves that the defendant was entitled to but was
not given a presuit notice stating the specific amount alleged to be
owed by the insurer under Section 542A.003(b)(2) at least 61 days
before the date the action was filed by the claimant, the court may
not award to the claimant any attorney’s fees incurred after the
date the defendant files the pleading with the court.  A pleading
under this subsection must be filed not later than the 30th day
after the date the defendant files an original answer in the court
in which the action is pending.
       SECTION 4.  (a) Section 541.156, Insurance Code, as amended
by this Act, and Chapter 542A, Insurance Code, as added by this Act,
apply only to an action filed on or after the effective date of this
Act. An action that is filed before the effective date of this Act
is governed by the law as it existed immediately before the
effective date of this Act, and that law is continued in effect for
that purpose.
       (b)  Section 542.060(c), Insurance Code, as added by this
Act, applies only to a claim, as defined by Section 542A.001,
Insurance Code, as added by this Act, made on or after the effective
date of this Act. A claim made before the effective date of this Act
is governed by the law as it existed immediately before the
effective date of this Act, and that law is continued in effect for
that purpose.
       SECTION 5.  This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution.  If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2017.

 

As you can see, the folks who are filing Hurricane Harvey claims are on an uphill battle before they ever get started.

 

We did not bring Hurricane Harvey, or any of the flooding. We cannot reverse the laws no more than we can reverse the destruction. What we can do… work to repeal this abomination of a law while we help folks recover with what is available now. In other words, we will continue to #ProtectTheInsured!

I am Cal Spoon, and yes I am in this business. Yes, before it is all over with, we will have worked these claims and hopefully made a profit. It is what we do. It has taken years upon years of knowledge to get where we are. We have successfully fought against nearly every insurer out there. Someone has to, and at last count, there were only approximately 750 people in this entire great state of ours who have this very special license. Never forget, the people who owe you the money are sending their guy out… 

 

My advice, file all claims prior to September 1st, 2017. This will not even come close to derailing this new law, but it will allow the one concession I am aware of, it will still cost them 18% when they are caught with their hand in the cookie jar.

 

Then hire a licensed, competent Public Insurance Adjuster.

 

Need a FREE Insurance Claim Review, fill out the contact form below, or call us toll-free at 877-41-2BUST

No Recovery, Absolutely No Fee!

 

 

 

 

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