New Laws Impact on Harvey
This outlines the immediate impact of the new Texas insurance law that goes into effect September 1, 2017 on Hurricane Harvey claims. The law in effect today provides for an 18% per annum penalty if an insurance company delays in payment. Under current law, you can also recover your attorney’s fees on the amounts recovered.
The new law will drop prompt pay to less than 10%. This significantly lowers the insurance company’s incentive since they are able to make money on your money as they delay. Additionally, the new law makes it much more difficult to obtain attorney’s fees. The new law also allows the insurance company to remove the case to federal court where they customarily have a better outcome.
In order to avoid the new law in its entirety, suit must be filed before September 1, 2017. This will not be possible for Hurricane Harvey claims because the insurance company has not done anything wrong yet.
However, if you put the insurance company on written notice that you are making a claim under your policy before September 1, 2017, the part of the new statute that lowers the prompt pay penalty will not apply. In other words, if you notify your carrier by Thursday, the carrier faces an 18% penalty for not paying your claim fairly and promptly. If you place them on notice on Friday or later, the insurance company will benefit significantly.
What Kind of Insurance?
The new law does not apply to auto policies or government sponsored FEMA flood claims. FEMA flood claims do not come with a penalty or the recovery of attorney’s fees. Some rare property insurance policies insure for flood and are not government sponsored. For those policies, the new state law applies and should be avoided by placing the insurance company on written notice before midnight, Thursday 8-31-17.
If you are not certain how much of your damage is caused by wind or flood, you should give written notice by the August 31, 2017 deadline. If you are not sure what kind of flood policy you have, you should do the same. There is no down side from early notice.
Harvey Claim Recommendations
- Email and write your insurance company and agent. State that you are putting them on notice of your claim pursuant to the law prior to HB 1774 to preserve your rights. Making a claim before the deadline on your carrier’s website or directly probably preserves your rights but a separate notice ensures protection.
- Flood insurance is not the same as homeowners’ insurance. Its government insurance administered by third parties. They have strict unforgiving rules. You must file a proof of loss within 60 days. I expect that to be extended, but use 60 days as the deadline until an extension is confirmed. After it is filed, you only have 60 days to supplement with additional damage. You will be held to the amount claimed in your final proof of loss from then on. The proof of loss is very important.
- If you have damage due to FLOOD and you DO NOT HAVE specific flood insurance, you need to AS SOON AS POSSIBLE go to https://www.fema.gov/apply-assistance and apply for assistance. Your homeowner’s insurance will very likely not provide any coverage for ANY flood related damages at all. FEMA will soon be inundated with claims for assistance, so the sooner you get your application submitted the better.
- Public adjusters are an awesome resource. Flood claims are technical. If you hire a public adjuster, make sure that adjuster is competent in this area. www.Mytapia.com is a good start to find a public adjuster or we can recommend a few that we rely on it for their expertise.
- Make a claim with your Home Owners insurance. Do it by email or writing. They have 15 days to acknowledge your claim but this will be extended to 30 days since your damage is due to a named storm. You can generally do that by going directly to your carrier’s website and filing a claim there. If not, call the carrier directly, and then follow-up in writing. Keep track of the manner in which you file the claim, the date you did it, and the claim number you receive. If you don’t get a claim number – it may not count. Get a claim number.
- Make a claim in the same manner with your Auto Carrier, if necessary.
- Photograph all property damage, including the contents of your house. Back up the photos in a safe place. Do not destroy or tear out anything without photo documentation. Take an overall video-start outside and around your house going from room to room.
- Document everything you pay out due to storm related damage. Insurance companies are suspicious of poorly documented claims that could cast a shadow on your entire claim. Use your phone to take pictures of receipts for tear-out, remediation, hotel bills, meals and anything you think you have remotely incurred due to the storm. I strongly recommend emailing them to yourself for additional backup. Save old receipts for contents and photograph serial numbers on all damaged electronics.
- Use a tape measure, yard stick or anything that shows perspective when documenting the level of the high-water line in your home if safely possible.
- Document all your dealings with the insurance adjuster. There will be catastrophe adjusters coming from other states and local adjusters handling claims. You may start with one and have a few more before the claim is fully adjusted, so get their contact information. Photograph their business cards. Confirm everything in writing. Reconfirm all oral agreements by email. Document! Document!
- Caveat Emptor Warning – Do not hire a remediation company or public adjuster without a reference and written contract. Read the fine print. You do not have to hire the remediation company the adjuster recommends. Insurance companies have a preferred list. Generally, to get on the list means special rates are given to the company in exchange for the recommendation and direct billing arrangement.
If you need any further assistance, please don’t hesitate to contact us at (866) 529-1020.
Robert D. Green
Green and Barton
440 Louisiana St., Ste. 1900
Houston, Texas 77002
Daniel P. Barton
Green and Barton
1201 Shepherd Dr.
Houston, Texas 77007