Texas Senate Passes Homeowners Insurance Lawsuit Restrictions

A controversial bill that would place restrictions on homeowners insurance lawsuits passed the Texas Senate. The bill passed by a vote of 21-10 and will move on to the Texas House of Representatives. If the bill passes both houses, it will go to the desk of Governor Greg Abbott, who is expected to sign it into law. Proponents of the homeowners insurance lawsuit restrictions claim that it will reduce frivolous and expensive claims. Opponents have stated that it places undue burdens on homeowners and heavily favors insurers.

Provisions of Homeowners Insurance Lawsuit Bill

According to the bill’s author, Senator Larry Taylor (R-Friendswood), the bill seeks to “ensure that consumers are protected from unfair and deceptive practices by insurers.” However, the bill also proposes several restrictions that would limit when and how property holders could file a homeowners insurance lawsuit against an insurer. These restrictions include allowing insurers to offer a “compromise settlement” for less than the amount of the claim and forcing policy holders to submit additional paperwork before filing a lawsuit.

Politics Drive Homeowners Insurance Lawsuit Debate

Although the homeowners insurance lawsuit bill passed the Senate, the vote was split along party lines, with Democrats casting all the “no” votes. Sen. Taylor claims that he proposed the homeowners insurance lawsuit bill to prevent what he called another “storm of litigation” after several major weather disasters affected state residents. Senator Rodney Ellis (D-Houston) told reporters that the bill would cause homeowners to “back off” from legitimate homeowners insurance lawsuits and accept “lowball” offers rather than fight the insurance companies in court.

Consumer Groups Oppose Homeowners Insurance Lawsuit Bill

Consumer advocate groups have spoken out against the propose homeowners insurance lawsuit restrictions. Alex Winslow of Texas Watch, a consumer advocacy group that monitors the insurance industry, told reporters that the senators who voted for the homeowners insurance lawsuit bill “chose to protect insurance industry tactics” and “would …undermine crucial policyholder protections.” He also said that the bill’s provisions would “mak(e) it easier for insurance companies to cheat” their policy holders.

Homeowners Insurance Lawsuit Bill Author Denies Conflict of Interest

Sen. Taylor, who also co-owns and insurance agency, claims that no conflict of interest exists between his business and his proposed legislation. He told reporters that the frequent occurrence of Texas weather disasters, ranging from Hurricane Ike in 2008 to the McAllen hailstorm of 2012, has forced both the industry and the state to make massive changes. Sen. Taylor proposed the homeowners insurance lawsuit restrictions to fight what he called a “storm of litigation” following these disasters and denies tilting the balance unfairly toward insurers.

Source: Dallas Morning News
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