AUSTIN – Texas lawmakers have filed Senate Bill 10 in an effort
to pass legislation that would decrease, or halt altogether, hailstorm
Texas Gov. Greg Abbott, Lt. Gov. Dan Patrick and state
Sen. Kelly Hancock, R-North Richland Hills, announced the filing of the bill
“Hail litigation has spiraled out of control in Texas,
mainly because of a small group of bad actors who abuse the system,” said
Hancock in a statement published Feb. 13. “Senate Bill 10 will address this problem,
improve transparency and protect Texas consumers from sky-high premiums without
infringing on their right to make an insurance claim or sue their insurance
company when it's not holding up its end of a deal.”
The insurance industry looks favorably on Senate Bill
10 and its efforts to place limits on hailstorm litigation.
“Hailstorm lawsuits are absolutely on the rise as far
as percentage of claims we get after storms,” Joe Woods, vice president of
state government relations in Texas for Property Casualty Insurers Co. of
America (PCIAA), told The Record. “Hailstorm claims in Hidalgo
County are particularly on the rise.”
Senate Bill 10’s focus is to help keep property insurance
costs low and ensure that insurance policies are available in hailstorm and
catastrophe prone areas.
“If we don’t do something, insurance companies are
going to have to respond by limiting policies or increasing their rates,” Wood said.
The bill will still allow for an insured person’s
right to sue, but they will only be able to sue for deceptive trade practices
or unfair settlement rather than both, which is happening now. It would also
curb lawsuits brought by lawyers, adjusters and roofers, who the insurance
industry said preys on people who might have only filed a claim before they
According to Senate Bill 10, “After a claimant gives
notice to an insurer and before the date the claimant files the action for
which notice is given, the insurer may send a written request to the claimant
to inspect, photograph, sample, or test the property that is the subject of the
claim, stating a reasonable date and time for conducting the inspection,
photographing, sampling, or testing.”
An insurance claimant must respond in writing to a
request for an inspection no later than ten days after a request. If the
claimant objects to the request, they must file a motion for protection and
state their basis for the objection.
Wood said hailstorm losses add up to more than
hurricane losses in terms of catastrophic losses. While hurricanes occur less
frequently, hailstorm litigation has had a dramatic impact on the insurance
“Over the past 15 years, insurance companies profit has
averaged around one percent,” Wood said. “In 2016, for every $1 a
company took in a premium, they will have losses amounting to $1.30.”
Wood added that it is important for the insurance
industry to build rates that level out catastrophic losses.
“I absolutely support this bill. I think it has a
great chance of passage,” Wood said.