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What You Need to Know about Texas’ Hailstorm Bill

hailstorm bill
What You Need to Know about Texas' Hailstorm Bill
What You Need to Know about Texas’ Hailstorm Bill

As a homeowner, you look to insurance as a means of protecting your property, and finances, should disaster strike. You also want to stay abreast of changes in insurance laws, policies, or premium amounts. All of these factors could affect your coverage and how much you pay. At Daic Law, we aim to provide our readers with information they need to know about legislation and possible changes that may affect them. In this article, we discuss the “Hailstorm Bill”, and what it means for you.

Texas Hailstorm Bill Background

In February 2017, the Texas Department of Insurance published a presentation to the Texas Legislature. Titled “Interim Charges: The Cost of Weather-Related Property Claims and Related Litigation”, the presentation results shows startling statistics concerning weather-related insurance claims in Texas. These statistics included:

  • A 900 percent increase in hail and wind claims involving adjusters or attorneys since 2012.
  • A 1,400 percent increase in policyholder lawsuits, with more than 50 percent based in South Texas.
  • Hail-related loss ratios averaged 21 percent across the state, with a 268 percent increase in claims based in South Texas in 2012.

After these statistics were published, many insurance companies increased rates or withdrew from policies related to wind and hail damage. This resulted in many Texans lacking the important coverage they needed.

Texas Hailstorm Bill Information

Since 2012, there have been numerous changes brought into legislation to address affordability and availability of insurance coverage as it relates to weather damage. The 2017 Hailstorm Bill (HB1774/SB10), was passed earlier this year with amendments addressing many of the previously unaddressed concerns. Slated to become effective September 1, 2017, the Hailstorm Bill contains a few major components aimed at reducing lawsuits while attempting to provide homeowners the coverage they need. These components include:

  • Creation of Texas Insurance Code, Section 542A, applying to first-party property claims involving “forces of nature”, such as:
    • Earthquake
    • Flood
    • Tornado
    • Lightning
    • Hail
    • Hurricane
    • Wind
    • Wildfire
    • Snowstorm
    • Rainstorm
  • All other claims will continue under the existing rules of Texas Insurance Code, Section 542.
  • Policyholders pursuing a lawsuit must file a pre-suit notice with their insurance company at least 61 days prior to filing. The notice must detail damages and attorney fees. This requirement allows the insurance company time to inspect the property and attempt to resolve the matter outside the court system.
  • Upon becoming effective, the current 18 percent annual interest payout for policyholders whose insurer did not comply with Chapter 542 of Texas Insurance Code would fall to 10 percent per Section 304.003 of Texas Finance Code.
  • The new law includes a provision allowing an insurer to assume liability as an “agent” who performs “any act on behalf of the insurer” once pre-suit notice is filed. If they assume liability, the agent may not be subject to a lawsuit.

Understanding Changes and Your Rights

The Hailstorm Bill represents the promise of balance between the rights of insurers and policyholders. Unfortunately, many Texans still find themselves embattled in dispute over claims, denials, or payment. In such cases, contact Daic Law to speak with our insurance recovery attorney about protecting your legal rights and getting the compensation you deserve. Fill out our contact form, or call us at 877-893-6040 to learn more.


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[…] What You Need to Know About Texas’ Hailstorm Bill […]

[…] of the most important effects that the Hailstorm Bill will address is the large number of lawsuits filed against insurers of Damage and Property (Note […]

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