David Yates Aug. 19, 2015, 1:51pm


Spring of 2015 was not kind to the Lone Star State, bringing record rainfall in some cities and pummeling others with harsh hailstorms – costly bouts of weather that resulted in the most claims in Texas Windstorm Insurance Association history.

According to data furnished by the association, TWIA opened 12,961 claims from April to June, 1,379 more claims than those submitted in Hurricane Rita’s wake in 2005.

Manuel Villarreal, a TWIA ombudsman, says as of August the association has closed 95.2 percent of the spring claims, with claim payments issued in 12.3 days on average.

“It was a really rough spring for everyone … but this is not the same TWIA as in 2008,” Villarreal said, adding that new leadership has modernized the association to satisfy consumers much quicker.

Following Hurricane Ike in 2008, Texas trial lawyers made hundreds of millions of dollars filing thousands of lawsuits against TWIA – the sole provider of windstorm insurance for gulf coast residents.

To stem the tide of lawsuits against the association following major storm strikes, the Texas Legislature passed House Bill 3 in 2011, requiring claimants to go through an appraisal process before filing suit.

TWIA litigation statistics show only 1 percent of HB 3 claims involve a dispute and less than 0.1 percent involve a lawsuit.

“HB 3 ended the humongous amounts of litigation,” said Mark Hanna, spokesperson for the Insurance Council of Texas. “Lawyers can’t go in there and haphazardly sue after a major storm.”

However, HB 3 only applies to TWIA claims, says Hanna, meaning insurance companies are still vulnerable after major storm strikes.

For example, the hailstorm that stuck McAllen in Hidalgo County in March of 2012 caused $250 million in damages, but the subsequent lawsuits that followed in the storm’s wake drove the cost up to $600 million, according to ICT.

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

Senate Bill 1628 sought to curb those lawsuits this past legislative cycle, but met with heavy resistance by Texas trial lawyer groups and was ultimately killed.

Hanna said he’d eventually like to see all storm claims filed in Texas have to go through an appraisal process first, expressing concerns about hailstorm litigation continuing unabated in the state.

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