New Property Insurance Law in Texas Starts Sept 1

There is a lot of misinformation and fear mongering circling the internet about a new Texas insurance law set to take place September 1, 2017.

House Bill 1774

House Bill 1774 was signed by Gov. Greg Abbott on May 26, 2017 and scheduled to take effect September 1, 2017. The new law applies to property insurance claims and lawsuits filed on or after September 1, 2017.  House Bill 1774 will reduce the amount of penalty interest from 18 percent to 10 percent in which insurance companies have to pay when they fail to pay a legitimate claim in a timely manner.  The new percentage amount will be determined by a market-based formula which is capped at 20%.  The current rate is 10 percent.

The bill also includes the requirement for policyholders to provide notice before filing a lawsuit, changes to the requirements for inspections, and recovering attorney's fees.

The law applies to wind claims but not most flood insurance claims.  Flood claims are administered by the federal government so policies purchased under the National Flood Insurance are not affected by state law.  The new law also does not apply to the Texas Windstorm Insurance Association which provides hailstorm and windstorm insurance in coastal counties.

Please Note:  The new law does not prevent homeowners from filing a claim or lawsuit after September 1st.   The new law only reduces the amount of interest, penalty, and attorney fees the insurance company must pay if they delay or not pay a legitimate claim.  The new law will not change the way claims are processed.  

How to File a Claim

Insurers should file claims on all insurance policies (including auto policy) before September 1, 2017 (even if you don't know the amount of damage) by making a phone call or sending an email to the insurance company requesting a claim be opened.  You should immediately follow this up with a letter and send it through the United States Postal Service first class mail AND a copy by Certified Mail Return Receipt Requested.  In the letter you should mention the following:

  • that you made a phone call and talked to a representative (make sure you have the person's name or ID) or sent an email (list email address) at a certain date and time
  • when the claim occurred, if you know, if not use a general date and time
  • what type of damage that you know about or anticipate
  • request they open a claim and assign an adjuster
  • request they date the claim as of the date of the initial phone call or email
  • include any other information discussed in the phone call or email

Make sure you send the letter through the United States Postal Service (both first class mail and certified mail/return receipt requested) and not Federal Express or some other method.  Most policies state claims must be filed using USPS First Class mail and some insurance companies deny claims based on information sent via Federal Express or some other carrier.  

For help with insurance questions, visit Texas Department of Insurance's Help After Harvey Website or call the Customer Help Line at 1-800-252-3439.

 

 

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