Bill Introduced in Texas Legislature Would Affect Property Damage Claims

On behalf of Ethan Shaw

In recent years, many hailstorms in Texas have resulted in tens of thousands of claims against property and casualty insurers. Many of these claims are the result of third-party contractors, adjusters and attorneys going into affected areas and soliciting business. In response to this situation, earlier this year Senator Larry Taylor of Galveston introduced S.B. 1628. The goal of the bill is to reduce the number of lawsuits filed against insurance companies by ensuring only meritorious claims are filed. It would make it more difficult for homeowners to file lawsuits against insurers by establishing additional requirements.

For example, the bill adds to existing law Sec. 541.1541 applicable to actions “brought by an insured relating to or arising from a claim made under an insurance policy for damage to or loss of real property or tangible personal property alleged to be covered by the policy.” 2015 Texas Senate Bill No. 1628, Texas Eighty-Fourth Legislature.

The requirements under the new section are as follows:

An insured must provide written notice to all potential defendants within 61 days before the lawsuit is filed. If the amount sought by the insured involves damages for items previously submitted to the insurer, the notice must be signed by the insured and state:

  • The specific items and amounts alleged to be owed by the insurer
  • The amount of the actual damages, other damages, interest and expenses, specifically stated for each item, that the insured alleges are owed
  • The amount of attorneys fees the insured reasonably has incurred
  • An amount that includes the amounts described above that the insured will accept in full and final satisfaction of the claim
  • The name of every person to whom notice is given under this section

If the amount sought by the insured involves damages for items not previously submitted to the insurer, the notice must also include:

  • A statement of the reason the damage items were not previously submitted
  • Copies of reports, estimates, photographs and other items reasonably supporting the additional items
  • A statement that the insured will cooperate in allowing the insurer to inspect the insured property for purposes of investigating the additional damage items

The notice must be sent to the insurer by certified mail, return receipt requested

Source: 2015 Texas Senate Bill No. 1628, Texas Eighty-Fourth Legislature

The bill also contains provisions prohibiting certain public adjuster activities, creating a practical standard for bona fide disputes, defining actual damages, addressing liability for persons working on behalf of the insurer, clarifying illegal insurance and estimate practices and prohibiting improper solicitation.

The bill passed the Senate on April 30, 2015. It has received a first reading in the House and was referred to the insurance committee which distributed a favorable report on the bill on May 21, 2015.