A bill that could impact Texans’ bank accounts is set to go to vote in the state House Thursday. 

Supporters of the controversial bill say it will lower premium prices for home and business owners, while critics argue the proposal will make it easier for insurance companies to deny or delay claims. 

It’s called “hailstorm legislation” but House Bill 1774 would apply to all forces of nature, from floods to wild fires.

State Representative Greg Bonnen, R-Friendswood, wrote HB 1774 to stop storm-chasing attorneys who travel to areas hit by severe weather to recruit clients and file “abusive” lawsuits against insurance companies.  

“The ultimate consequence of that is policyholders pay more, they see higher deductibles, and they see less coverage available to them,” Bonnen said.

The insurance watchdog organization, Texas Watch, believes the bill will make it easier for insurers to delay and deny legitimate claims for home and business owners.  

“This bill would gut your property rights, if it passes your insurance policy will not be worth the paper it’s printed on,” said Ware Wendell, executive director of Texas Watch.

Under HB 1774, insurance companies can assume responsibility for suits filed against an individual employee, like an adjuster. 

If the company is based outside of Texas the case is sent to federal court, which Wendell said will take twice as long as state court and will double the cost.

“Long story short you’re going to have a very hard time taking your insurance company to court,” Wendell said. “It will make it very difficult to find a lawyer who is willing to take your case and without a lawyer you’re a lamb to the slaughter.”

According Texans for Lawsuit Reform, a non-profit organization that helped shape the bill, 36,000 weather-related lawsuits have been filed in the state since mid-2012. Before that the number of cases averaged around 750 per year. 

Rep. Bonnen said, “We’ve already started to see 12 companies raising rates and seven companies either limiting, or reducing, or eliminating coverage and that will become a more severe problem.”  

According to Texas Watch, lawsuits are on the rise because “insurance companies are forcing people to sue them by making it harder for you to get paid on your claim,” Wendell said.

HB 1774 would reduce penalties for insurers that wrongly delay claims from 18 percent to 10 percent.

The bill would also add teeth to an existing state law that requires attorneys to provide written notice 60 days before a lawsuit is filed. If the policyholder’s attorney does not give an insurance company that notice, the company would not be responsible to pay the lawyer’s legal fees.

The insurance company would not have to pay the legal fees for the plaintiff’s lawyer if the cost estimate is five times or more what a judge or jury finds the amount of damages to be.

At Texas Watch, Wendell said, “It punishes homeowners and business owners with valid claims and it rewards the worst insurance companies that take the longest to pay claims.”

Rep. Bonnen said the said HB 1773 would not tilt the scales of justice in favor of big insurance companies. He added the bill is meant to reduce frivolous lawsuits that hike premiums and increase costs for policyholders. 

“The legislature has an opportunity to end that abuse,” Bonnen said, “While at the same time preserving everybody’s right to sue their insurance company if they are not paid fully or timely or if anyway the insured does not act in good faith.”

The bill was taken up in the House just before 6 p.m. Thursday and debate continued on into the evening. As of 8 p.m. several proposed amendments to the bill had been voted down and at the time of this post the House had yet to vote on HB 1774. 

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