By RICHARD WEEKLEY
When we began fighting lawsuit abuse in Texas 22 years ago, we had no idea how long the battle would take. We have won some great tort reform victories that have strengthened the Texas economy and helped make the Texas civil justice system a model for the nation. But today, we are seeing a new wave of ambulance-chasing personal injury trial lawyers - storm chasers - who must be stopped.
Storm-chasing trial lawyers go from hail storm to hail storm filing massive numbers of hail-damage lawsuits that are reducing consumer access to property insurance and will increase property insurance deductibles and premiums for all Texans.
At least two insurance carriers have decided they must quit writing homeowners' insurance in Hidalgo County and other carriers are contemplating doing so. Some property owners have already reported an increase in deductibles to such a high level that hail claims are essentially going uncovered.
Texas has the most severe weather in the nation. Even without lawsuit abuse, hailstorms cost the Texas marketplace $10.3 billion in damages from 2004 through 2013. Now hail damage is becoming even more expensive because of the explosion in lawsuits generated by storm-chasing trial lawyers.
This latest plague of lawsuits started in Hidalgo County, but a growing body of statistical and anecdotal evidence shows the litigation abuse is spreading across Texas. Storm-chasing trial lawyers are following the same model used to bankrupt the Texas Windstorm Insurance Association following Hurricane Ike. They troll for clients using massive advertising campaigns - TV, direct mail, even door-to-door solicitation - to push homeowners to file new claims even after their initial claims have been paid. Some of these trial lawyers have joined with unscrupulous roofers, public adjusters, contractors and others - some with questionable or no qualifications - to help them find clients.
One small Texas insurance carrier who insured homes in Hidalgo County had 2,517 hail claims and 688 lawsuits generated from those claims - 27.33 percent. Prior to the onslaught by storm-chasing trial lawyers, the normal percentage of lawsuits to claims was less than 1 percent. Over 20,000 hailstorm lawsuits have been filed statewide - 300 alone in the past week.
Plaintiff attorneys and their solicitors often pursue these policyholder claims because an attorney-fee award and an 18 percent penalty interest are mandatory under Texas law if an insurance company is just a day late or a dollar short in paying a claim. Even a small claim carries automatic attorney fees that are often many times greater than the amount of the claim itself. This enriches the lawyers, but ultimately every Texas policyholder will pay the price in higher premiums.
What is startling about this avalanche of lawsuits against homeowners' insurance companies is that the Texas Department of Insurance reports that complaints against insurance companies have actually declined for the past five years. It makes no sense that people would file fewer complaints about their homeowners' insurance but sue more.
Over the past five years, hailstorms have not changed, insurance policies have not changed and insurance laws have not changed. The only explanation for the explosion in lawsuits is storm-chasing attorneys who are manufacturing lawsuits for legal fees.
State Rep. John Smithee, R-Amarillo, and state Sen. Larry Taylor, R-Friendswood, have filed bills in the Texas House and Senate aimed at stopping the abusive practices of the trial lawyers and public adjusters. Texans who understand the importance of keeping our economy strong by reducing job-killing lawsuit abuse should support this legislation.
Weekley, of Houston, is co-founder and CEO of Texans for Lawsuit Reform.