HOUSTON – Not long after Hurricane Harvey crashed upon Texas shores, trial lawyers began publicly urging victims to file insurance claims before Sept. 1 – the date a new law aimed at ending weather-related lawsuit abuse goes into effect.

The confusion surrounding House Bill 1774, passed during the latest legislative session, was perhaps most amplified with a wildly circulated post made by State Bar of Texas President-Elect Joe Longley, who warned policyholders to make a claim before Sept. 1.

Many of the state’s most high-profile trial lawyers, including Houston’s Mark Lanier and Beaumont’s own Brent Coon, followed suit with similar messages of insured doom on their social media accounts.

And Houston attorney Steve Mostyn, perhaps HB 1774’s largest opponent, has especially been active on Facebook, Twitter and in the news media the past several days.

Mostyn, who refuses to speak with the Record, has made hundreds of millions of dollars suing insurers in the wakes of hurricanes and other weather-related disasters.

The flurry of conflicting news stories and posts put pressure to Gov. Greg Abbott to delay the new law’s effective date and even warranted a response from Texas’ chief lawyer.

“There has been much misinformation, some of it apparently deliberate, about the impact of HB 1774 on property insurance claims,” said Attorney General Ken Paxton in an Aug. 31 statement.

“First, please know that the bill does not apply to the federal flood insurance program, nor does it apply to homeowner policies issued by the Texas Windstorm Insurance Association. For all other property insurance policies, the legislation does not change the claim filing process or the time lines for filing claims.

“Texas policyholders will continue to have strong remedies against insurance companies, whether claims are filed before Sept. 1 or after.”

Still, Paxton’s statement stands in stark contrast with recent media reports, which some went so far as to stress “consequences” for policyholder who delay action.

For example, on Aug. 28 Texas Lawyer posted an article in which the opening paragraph reads: “Texas lawyers have some crucial advice for victims of Hurricane Harvey: Notify your insurance company of home or business damage before Sept. 1 or suffer the consequences of a new state law that reduces the penalties insurers pay for delaying or denying claims.”

Currently, if a court finds an insurer unlawfully delayed or denied payment, an 18 percent penalty can be assessed. When the new law goes into effect, that amount will be capped at 10 percent.

HB 1774 also requires pre-lawsuit notices and impacts the amount of recoverable attorneys’ fees.

Many of the proponents of HB 1774, including state tort reform groups like Texans Against Lawsuit Abuse, have issued to statements to combat the “misinformation” purportedly being circulated.

“As is often the case in the aftermath of natural disasters, there’s been considerable misinformation on how the new law will impact homeowners,” said Jennifer Harris, TALA’s executive director.

“The bottom line is the normal insurance claims process has not changed, and a homeowner’s ability to file suit and receive full damages for unpaid claims does not change when the law takes effect on Sept. 1.”

While lawyers like Lanier argue pre-suit notices are “warning” letters that give insurance companies up to 60 days to pay with no penalty, Harris says the change gives insurance companies time to resolve a claim before being taken to court – preserving the homeowner’s right to sue and ensuring that natural disasters aren’t used for financial gain driven by personal injury lawyers.

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The Mostyn Law Firm
3810 W Alabama St
Houston, Texas - 77027

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