Sep 042017

The truth behind Texas’ new Insurance Law.


The new law, otherwise known as “HB 1774”, or the “Blue Tarps Bill”, will only affect you if… you disagree with what your insurer says after a catastrophic loss, such as Hurricane Harvey.

If your insurer comes rushing out, pays you everything you are owed, on their own, you have absolutely nothing to be concerned about… Lest we forget, those same insurers are sending “their” guy to tell you how much they “owe” you.

In reality, we have proven time after time, insurers routinely underpay on all claims. So, this law would affect all claims in the event that the carrier actually “gets caught”.  I have heard many different versions, from many different credible sources (one of which also included a divorce lawyer overland park). I have yet to hear the real meat hit the public’s eye.

The ONLY thing this law does, is reduce the penalties an insurer will pay in the event they are caught.

It is a broad statement that encompasses many facets, all leading to one outcome.  Here is an example scenario:

Insured purchases both Flood and Wind insurance to South Carolina business insurance. Hurricane Harvey devastates the South Texas Coast, more specifically, Rockport, Texas. Insured has covered losses from both Wind and Flood. Structure is gone, completely. Texas has a 5-day “Liquidated Demand” clause in the policy, which means that when a structure is deemed to be totaled by any reasonable means, the insurer has 5 days to pay structure limits. Notice that this coverage is separated, and very specific. It is the only portion of the policy it applies to… the structure, only one portion of the coverages available to the insured. One of many. This clause, like many others, serves dual purposes.

(It allows the insurer to pay the mandated amount, keeping their obligation to timelines, while effectively purchasing good will from the insured… While this may not seem like a big deal, it is. A very big deal. It paves the way for what is to come next. A laundry list of forms, procedures and details designed for one thing. Minimize pay outs. When you, the insured, becomes wear of the entire thing, there will be someone on the insurer’s payroll, taking full advantage of the situation, by asking questions and giving answers that suggest maybe you are “embellishing” the value of this, and that… and don’t forget, we paid the full structure limit right away!)

Back to our insured… we have established coverage for both, Flood and Wind. Now, the question remains, which one did what? Did water come from both places? The roof and the ground? Does Wind only owe for a roof? Does Flood owe for EVERYTHING below the Flood line?

Now suppose any one single item is in contention. Let us choose contents. Great Grandma’s antique hutch that has been through 8 generations. Flood water has damaged the lower half, while a Wind created opening allowed water in from rains, which damaged the top of the hutch. Flood agrees to cover, but your contents is maxed out and wind is refusing coverage, attempting to state Flood was responsible. (Hurricane Katrina and Sandy proved that neither private carriers not the government can be trusted when they were spending their money to pay legitimate claims.)

You now have a dispute, and the new law affects you. Remember, before you had a dispute, this law did not affect you. Now that you do have a legitimate dispute, this Law, HB 1774, directly affects you!


In short form, Layman’s terms:

  • Unless you filed your claim prior to September 1, 2017, your insurer will only owe you 10% as opposed to the original 18%, when caught not paying “promptly”, according to law.
  • If your agent did not do their job, and the adjuster purposefully takes provable illegal routes to deny your claim, or any portion of it, they will no longer be held accountable, if their employer decides to take the responsibility. (This means that when adjusters, engineers… like the ones who doctored the reports in Hurricane Katrina and Hurricane Sandy, can be exempted from any charges based on the entity whose benefit their deception rewarded.) In other words, the carrier will get a small “fine” and it will be business as usual before the payment is issued.
  • Set requirements for filing a law suit that did not exist prior to HB 1774. Again, notice this is after they have been caught, and you the insured are attempting to only get what was owed.
  • Set very restrictive guidelines for attorney’s who handle these claims, to obtain fees. There is a number they must present at the beginning, prior to discovery, that reflects what an end result “may” come up to. Approximately within 20%. So, with experience and hypotheticals, without discovery, they must be within that 20% spread in order to obtain.
  • In the event of a dispute, it has effectively limited an insured’s right to recover. That is what HB1774 has done.

If your rights were limited, who received the benefit?

If your recovery is limited, who received the benefit?

How can your agent, the adjusters, engineers and many others who deny your legitimate claims be exempted, yet you, the insured can be retaliated against, and held to those standards they have been exempted of?

No, contrary to what the folks who keep saying this does not affect you are saying… Unless.

Unless you have valid dispute. Then it gives the carrier the benefit on every item introduced as part of this law.

There is NO benefit to us, the insured. Not one single benefit. As the days, weeks and months come and go, and recovery efforts are stalled, there will be one reason. HB 1774 allowed it. HB 1774 made it possible for insurers to knowingly hold your money longer, while paying less penalties.

When they get caught.

Cal Spoon


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