Hurricane Harvey: File Property Damage Claims Before September 1st

Though the full extent of the damage arising from Hurricane Harvey won’t be known for months, policyholders with insurance claims arising from the storm should strongly consider filing claims with their insurers now. A new, pro-insurer law will take effect in Texas on September 1, 2017, and claims filed before September 1st will not be subject to the new law.

In sum, Texas House Bill 1774 will apply to all insurance coverage suits concerning property damage that results from “forces of nature,” including hurricane, flood, and rain. The new law creates additional procedural hurdles for policyholders, and potentially limits the amount of their recovery. Specifically:

• The bill requires policyholders to provide notice to insurers 61-days before suit is filed, and to permit the insurer to inspect the damaged property. Failure to do so will allow the insurer to abate the lawsuit.
• If an insurer wrongfully refuses to pay a claim, and the policyholder prevails in a coverage suit, the bill also applies a new, less favorable formula to compute the pre-judgment interest owed to the policyholder and significantly limits a policyholder’s ability to collect its coverage case attorneys’ fees.

Claims filed before September 1, 2017, will not be subject to the new requirements and limitations. Most insurers permit claims to be filed electronically, and policyholders should consider filing claims now to best protect themselves in the event of a future dispute with their insurers.