Hailstorm lawsuit bill ignites battle between Texas watchdog groups

A Texas Senate bill aimed at reining in the growing surge of hailstorm lawsuits in the state has sparked a battle between watchdog groups.

Back in March, Sen. Larry Taylor, R-Friendswood, introduced SB 1628. The 20-page bill aims to put in place a two-year statute on claims; stop plaintiffs from naming adjusters in their suit; and require plaintiffs to give notice of their storm damages when filing suit.

Also, adjusters who refer policyholders to plaintiff attorneys could be hit with barratry charges.

In response to SB 1628, Texas Watch, a self-proclaimed consumer protection group, launched a campaign urging Lone Star residents to “take action” and stop the “dangerous bill.”

“Policyholders pay premiums in exchange for a promise from their insurance company that claims will be paid in full and on time,” Texas Watch states on its web site. “Too often insurers fail to hold up their end of the bargain by unfairly denying, delaying, or underpaying valid claims. However, CSSB 1628 gives to industry and takes from policyholders.”

To spread its message, Texas Watch has been busy crafting pod casts and an online video, which asserts insurance lobbyists seeking to “incentivize lowball settlements” and create “gotcha” provisions allowing insurers to deny claims are behind the bill.

The group’s opposition to the bill has not escaped the attention of Texans for Lawsuit Reform, the state’s largest civil justice reform group.

“Texas Watch is not a public interest consumer watchdog, they are a trial lawyer front group that is fighting lawsuit reforms that will help protect homeowners’ access to affordable insurance policies in Texas," said Sherry Sylvester, a TLR spokesperson.

"Texas Watch is using distortion and misinformation to protect the storm-chasing trial lawyers who have manufactured an avalanche of hailstorm lawsuits across Texas for the purpose of generating legal fees.”

Sylvester says Texas Watch has long tried to deceive the public by portraying it as a pro-consumer group.

According to its filing with the Texas Secretary of State, the seven-member board of Texas Watch is dominated by personal injury trial lawyers and their allies, including the longtime spokesman for the Texas Trial Lawyers Association Willie Chapman, and Dallas trial lawyer D. Shawn Stevens.

The current deputy director of Texas Watch, Ware Wendall, is also a personal injury trial lawyer.

TLR believes the “abusive” lawsuits brought after a storm will disrupt the insurance market in Texas, resulting in less competition, higher deductibles, higher premiums and limited coverage.

“Storm-chasing trial lawyers are following the same model that left the Texas Windstorm Insurance Association (TWIA) virtually bankrupt following Hurricane Ike,” said Sylvester.

“Unscrupulous attorneys go from hailstorm to hailstorm trolling for clients using massive advertising campaigns – TV, billboards, direct mail, and door-to-door solicitation – to push homeowners to file lawsuits even after their initial claims have been paid."

SB 1628 is designed to hinder trial lawyers from drumming up mass litigation following a storm, such as the hailstorm that stuck McAllen in Hidalgo County in March of 2012.

The storm caused $250 million in damages. The subsequent lawsuits that followed in the storm’s wake drove the cost up to $600 million, according to the Insurance Council of Texas.

On average, 2 percent of insurance claims become lawsuits. But in the McAllen storm, the number jumped to 22 percent.