Editor’s note: This story has been updated for clarity.
If your home or business has damage from Hurricane Harvey, you should notify your insurance company—in writing—that you intend to file a claim before a new law takes effect on Friday, according to the Texas Trial Lawyers Association. Even though the hurricane occurred before the law took effect, a claim filed on Friday or after will likely be covered by a new law that seeks to reduce frivolous insurance lawsuits.
On Friday, the penalty for an insurance company that doesn’t promptly pay a claim as a result of a lawsuit will be determined by a market-based formula that is currently at 10 percent. The former penalty was 18 percent. The new law also gives lawsuit immunity to insurance adjusters who low-ball a claim.
From the Texas Bar Association:
Texas property owners should be aware that House Bill 1774, passed by the 85th Texas Legislature, will change the law regarding how legal actions for certain insurance claims are handled, including some claims for property damages or losses caused by natural disasters. If you need to make an insurance claim related to Hurricane Harvey, you should study how the law may affect you. Claims made before September 1, 2017, will be subject to current law; those filed on or after September 1 will fall under the new law.
Texas Trial Lawyers Association spokesman Alex Winslow said the notice of a claim can be filed directly on an insurance company’s web site, by fax or certified mail, but it is best done in writing and with the policy holder retaining a copy of the filing. Winslow said the claim does not need to say anything more than that the policy holder suffered damage from Hurricane Harvey and intends to file a claim. The notice should contain the name and contact information of the policy holder and, if possible, the insurance policy number.
Winslow said the new law may not affect federal flood insurance or windstorm policies held on the coast by the Texas Windstorm Insurance Association, a state-run consortium that provides hurricane coverage on the immediate coast. But Winslow said that because of uncertainty in the new law, the trial lawyers association is urging everyone to be safe rather than sorry, and file a notice with their insurance carrier before Friday.
Still, this new law won’t affect the bulk of policy holders. As the Texas Tribune notes, most homeowners’ policies don’t cover flooding in Texas. And the ones that do are usually through National Flood Insurance Program, which is not subject to state regulations.