BILL TAKES AIM AT HAILSTORM LAWSUIT ABUSE
(AUSTIN) — A bill filed in the Senate Monday seeks to curb the skyrocketing number of lawsuits filed against insurers for bogus or inflated hailstorm claims. According to a survey by the Texas Department of Insurance, the number of hailstorm-related lawsuits filed against insurance companies has increased fifteen-fold since 2011. This activity has led to insurers decreasing and even declining to insure homes against hailstorms in the areas with the most litigation. The Business and Commerce Committee was directed to study this issue over the interim, and Chair Kelly Hancock announced Monday a bill to combat this trend.
Senator Kelly Hancock of North Richland Hills announced a bill to combat a surge in hailstorm-related litigation driving insurers out of the market in Texas.
One of the factors at the heart of this problem, according to Hancock, is the practice of inciting clients to sue companies, known as barratry. "Essentially they're stormchasers who partner with unethical roofers and public adjusters and recruit homeowners to file unnecessary lawsuits instead of moving through the standard insurance claims process," he said. Another factor contributing to the surge in hailstorm litigation is that insurers can be sued separately under two different sections of state law, potentially doubling the number of suits and damages paid by a losing insurer.
SB 10, by Hancock, would bar attorneys from collecting fees if an insurance company can prove barratry, and clarifies that a suit can only be filed through one of the two related sections of the state code. It also gives an insurance company 60-days notice before a lawsuit progresses so that they can have a chance to remedy the issue with the home owner before they get to court and prohibits filing suit against a claims adjuster personally.
Hancock was joined at the press conference by Lt. Governor Dan Patrick, who directed the Business and Commerce Committee to study this issue last year. Patrick also assigned the bill one of his specially reserved low bill numbers to reflect the priority he places on the issue. "We've seen a deluge of these kinds of lawsuits in the last several years," he said. "It means the insurance companies are raising premiums on homeowners and business owners. Deductibles are higher, that's costing our citizens of Texans real money out of their pocket that's going to lawyers."
Two other low-numbered bills prioritized by the Lt. Governor were in front of the Senate State Affairs committee this morning. The first, SB 13 by Houston Senator and Committee Chair Joan Huffman, would prohibit the automatic deduction of union dues from the paychecks of state employees. She said that Texas is one of the few remaining states that still permits this practice. Her bill would prohibit these automatic deductions, but employees could choose to donate funds on their own. Unions for first responders are exempted from the bill, as well as those for public employees in towns with fewer than ten-thousand residents.
The second bill, SB 24, also by Huffman, would protect sermons by clergy members from subpoenas. This follows a 2014 case where Houston city attorneys requested the text of several area pastors who spoke against that city's proposed equal rights ordinance. Though the subpoenas were eventually dropped, Huffman wants to make sure that never happens again. She cited the opinion of then-Attorney General Greg Abbott, who said that it was a "direct assault on the religious liberty guaranteed by the First Amendment." Huffman's bill would prohibit subpoenas of a religious leader's speeches delivered during a time of worship in civil cases involving governmental entities. "It is narrowly tailored to protect religious leaders' First Amendment rights and prevent government overreach and intimidation," she said. Both bills will come up for a committee vote on Thursday.
The Senate will reconvene Tuesday, February 14 at 11 a.m.