Tuesday, August 29, 2017

New Texas Insurance Code provisions take effect this Friday, restricting policyholders' rights against insurers who mishandle business and personal property claims arising from storms and other natural disasters.

Our June 26 blog post, New Texas Hail Law Restricts Property Policyholder Rights Far Beyond Hail Claims, provides a detailed analysis of the new law, codified at section 542A of the Texas Insurance Code.

Although various aspects of the new law will likely impact Hurricane Harvey claims that end up in litigation after the law's effective date, reduced penalty interest provisions apply to claims made on or after September 1.

Under the new law, late payments will be subject to the current interest rate (which is now 5%) plus 5%. Claims made before Friday, September 1 are governed by the penalty interest provisions in the old law — i.e., 18% interest on claims that are not paid timely. In other words, the penalty interest rate for late payments effectively drops from 18% to 10% on Friday.  

If you have experienced losses as a result of Hurricane Harvey, notify your insurers in writing before Friday, September 1 in compliance with the notice provisions of your policies. Provide all information requested in your policies and indicate that the loss or damage is continuing. 

About Amy Stewart Law:

In addition to handling complex and high-stakes insurance coverage and bad faith litigation, Amy Stewart Law assists corporate policyholders with strategic advice relating to pre-litigation claim negotiations and coverage denials, indemnity and insurance provisions in third-party contracts, and insurance procurement and renewal issues. Contact us at information@amystewartlaw.com for more information.