Hailstorm lawsuit reform bill introduced in Texas Senate

By David Yates | Feb 13, 2017

AUSTIN – On Feb. 13, Lt. Gov. Dan Patrick and state Sen. Kelly Hancock, R-North Richland Hills, announced the filing of Senate Bill 10 – a piece of legislation aimed at ending hailstorm lawsuit abuse.

Both Patrick and Gov. Greg Abbott have made public remarks on the importance of hailstorm lawsuit reform.

During his State of the State address, Abbott proclaimed: “Hailstorm litigation is the newest form of lawsuit abuse.”

Patrick echoed the sentiment during his press conference, saying there is always a new issue when it comes to tort reform and that Texas’ tort reform efforts have had a substantial impact on improving the Texas economy.

Patrick added that storm litigation rates have increased 15 fold, leading to insurers increasing premiums and reducing coverage.

Hancock referred to a small group of trial lawyers driving the abuse as “bad actors,” making “legislative enactment necessary.”

The bill ensures disgruntle insureds maintain the right to sue. However, if enacted, SB 10 will only permit the plaintiff’s lawyer to either sue for deceptive trade practices or unfair settlement, not both.

The bill also seeks to end barratry in hail litigation, as reports of lawyers employing contractors and insurance adjusters to drum up clients have continued to surface the past several years.

SB 10 further requires prospective plaintiffs to give 60 days notice, allowing the insurer time to rectify the issue, and stops plaintiffs from suing their individual insurance representative.

“No person should be personally liable just for doing their job,” Hancock said at the press conference, adding that SB 10 will help maintain a healthy Texas economy.

State Rep. Greg Bonnen filed a companion bill, HB 1774, in the Texas House.

In late January, Texans for Lawsuit Reform, one of the largest proponents of hailstorm reform the past several years, announced its 2017 proposal targeting “storm chasing lawyers.”

TLR issued the following statement following the announcement of the bill filings:

“Hail-related litigation is the worst lawsuit abuse in Texas today. If left unchecked, it will hurt every Texas homeowner through increased property insurance premiums and deductibles, or reduced or lost coverage. We are pleased that Sen. Hancock and Rep. Bonnen’s legislation provides a common-sense solution that will stop this abusive litigation and protect the right of every Texas homeowner to sue their insurance company if it fails to pay timely, or acts unfairly or in bad faith.”

Two years ago, a bill crafted to end hailstorm lawsuit abuse died in the Texas House.

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