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In the legislative session that ended in May 2017, the Texas Legislature passed HB 1774, which finally prevented abusive lawsuits that dramatically increased the cost of home insurance for all Texans. Unscrupulous people are taking advantage of the devastation caused by Hurricane Harvey in Texas to spread false stories about what HB 1774 did and did not change.

Fortunately the organization Texans for Lawsuit Reform has released a solid factual statement with the truth, the short answer of which is a resounding NO!:

Statement Regarding Hurricane Harvey and HB 1774

AUSTIN – Texans for Lawsuit Reform today issued the following statement regarding Hurricane Harvey:

“TLR was founded in Houston and continues to have strong roots in the community. We are devastated to see the damage that has been unleashed on the city, and on our friends, family and neighbors,” TLR President Dick Trabulsi said. “The Texans affected by this historic disaster deserve our full support as they begin to pick up the pieces. To assist with disaster relief efforts across the impacted area, TLR has made a donation to the American Red Cross, and we ask all Texans to join us supporting the relief efforts and in praying for all who have been impacted.”

As with any evolving situation of this nature, misinformation can spread quickly. Texans should have the facts about insurance claims following Hurricane Harvey:

The normal insurance claims process has not changed. Reform legislation passed in the last legislative session (HB 1774) goes into effect on September 1, 2017, and applies to lawsuitsfiled after that date. A person making a claim with her insurance company after September 1, 2017 will go through the same process as a person making a claim before September 1, 2017. Texans should contact their insurance companies directly to file claims.

Lawsuits are the exception – not the rule, and the vast majority of Texans will resolve their claims without needing to file a lawsuit.

Beware of anyone—lawyer, adjuster, contractor, or anyone else—claiming to help you get more money from your insurance company.

If your insurer does improperly deny or delay paying your claim, Texas has the strongest consumer protections in the nation for you, which will continue to be the case after September 1, 2017. Texans can receive full damages for unpaid claims, can recover attorney fees for legal action taken to recover those damages, and can also recover penalty interest. If an insurer acts fraudulently or in bad faith, additional remedies, including the recovery of triple damages, are available to Texans. This is true today, and it will be true after the reform legislation HB 1774 goes into effect on September 1, 2017.

The primary purpose of the new statute is to require written notice of a dispute before a lawsuit is filed. If a lawsuit is filed, it would happen months or years after the initial claim was made with the insurance company. Nothing in the new law passed by the Legislature earlier this year requires that the initial insurance claim be made in writing or by a specific date.

• The requirement for a written pre-lawsuit notice (not pre-claim notice) to the insurance company ensures the company is aware of its policyholder’s complaint and has had an opportunity to adequately address that complaint before being sued. It is a part of existing Texas law and does not disadvantage policyholders.

Furthermore, the new law will not apply to most claims or lawsuits arising from Harvey, because most of the policyholders’ claims will be for damage caused by flooding. These claims will be made under the federal flood insurance program and governed by federal law.

Similarly, the new law will not apply to lawsuits pursued against the Texas Windstorm Insurance Association (TWIA), which is subject to an entirely different statute governing post-disaster lawsuits. TWIA provides insurance for many people affected by Harvey in our coastal counties.

The law that will become effective on September 1, 2017, is designed to do two important things:

1. Discourage the feeding frenzy by lawyers and contractors following natural events occurring in Texas over the past several years. These unscrupulous actors have taken advantage of thousands of hard-working Texans over the past several years.

2. Encourage out-of-state insurance adjusters to come work in Texas following a massive disaster like Harvey. In the following days and weeks, it will be critically important for out-of-state adjusters to work in Texas to ensure that insurance claims are evaluated and paid in a timely manner.

In sum, the new law does not affect the claims process. Instead, it affects only the lawsuits that sometimes follow the claims process. Furthermore, it does not create a new deadline for action by policyholders.

It’s a sad fact that lawsuits are getting more common and more expensive. Even if you never lose a multi-million-dollar court case, just preparing for the first phase of a lawsuit can easily run up legal bills in the tens of thousands of dollars.

Even worse, no one knows in advance what specific event may be the one that triggers that kind of lawsuit in their life. Will it be someone injured:

  • In a car accident – whether it’s you driving or someone you let drive your car?
  • At your home – through what seems at the time as a simple trip, or something happening around the pool or on the trampoline?
  • Online – losing their job or reputation because of something you or a family member say on Facebook or a blog, whether or not you even realize the potential impact?

A Personal Umbrella Insurance Policy (subject to exceptions and limitations, of course) can cover not just the jury damages or settlements in these types of cases, but also the legal costs to defend them.

Without a personal umbrella policy you may be stuck settling a case you might have won simply because you don’t have the money to pay the lawyers to fight it out.

Don’t put yourself at that risk. We’d be happy to refer you to a great independent insurance agent who can make sure you have the coverages you need.

With as little rain as we’ve had in Texas the last few months, it’s hard to think about needing an Umbrella, but many more of your clients need the protection than you may think.

An Umbrella policy protects against liability lawsuits. In these days when people can win a huge lawsuit over being surprised that coffee is hot, serious liability protection is more important than ever. Without the proper coverage you could see your entire life’s work evaporate in one gut-wrenching bang of a gavel.

You may need a Personal Umbrella policy if you:

  • Own or drive a car. In one study by Gen Re (a Berkshire Hathaway company), serious auto accidents were almost 90% of total personal umbrella losses. In just one example, a driver talking on his cell phone crashed into a motorcycle, causing brain and organ damage to the motorcycle passenger, resulting in a settlement of $2.9 million.
  • Own a rental property. Rental properties can be great sources of income, but they can also pose big exposures. In just one example, two children died in a fire after playing with matches at a rental property, resulting in a $1.1 million settlement.
  • Own a dog. Texas is one of the more owner-friendly states and follows a “one bite rule” that means legal liability for a dog bite requires that a) the owner knew the dog had bitten someone previously or had the dangerous propensity to bite a person, b) the bite was caused by the negligence of the dog owner or handler, c) the bite was caused by a violation of a leash or other animal control law, or d) the injury was caused intentionally by the person handling the dog. Nevertheless, dog bite liability claims can be very severe, with one woman who suffered wounds from a dog bite receiving a verdict of $1.5 million.
  • Use a computer or cell phone. In 2007 there were 106 lawsuits against people posting statements on the internet, and the number of these lawsuits has been increasing rapidly. Suits and claims from bullying related to cell phone texts and pictures are also becoming more common. Even if you win a case like this, defending against it without insurance to cover legal fees can be financially catastrophic.
  • Want the best value in liability coverage. iMGA now offers excellent Personal Umbrella coverage with limits from $1 million to $5 million, underwritten by an A.M. Best A Rated A size XV insurance company. Limits that large can frequently be added for less than the liability cost just on a personal auto policy, and also includes coverage for exposures not included in the either auto or homeowners insurance policy.

Skipping through these scary legends of our jackpot court system, don’t you think you should talk to your clients about their willingness to expose their assets to the redistribution of their wealth to ambulance chasers and lottery hopefuls?

If you are a Texas Independent Insurance Agent who does not already represent iMGA and you’d like to be able to offer this coverage to your clients, contact us today.

If you are a Texan who would like this valuable protection – talk to your Texas Independent Insurance Agent about getting an iMGA umbrella. They’d also be happy to help you with an iMGA homeowners, rental property, dwelling fire, or mobile home policy with included Equipment Breakdown coverage and give multi-policy discounts!  Or if you’d prefer, complete the form and we’ll refer you to the nearest iMGA agent.

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