FEMA Waives and Extends Proof of Loss Requirement for Harvey Victims

This week, the Federal Emergency Management Agency (FEMA) issued a memorandum that waives the requirement that National Flood Insurance Policy policyholders have to submit and sign a proof of loss or sign an adjuster’s report prior to receiving payment on their claim. Now, the insurance company is directed to pay policyholders, as soon as possible and without the need for this extra step in signing and swearing to a proof of loss form or signing and swearing to an adjuster’s report / estimate of damages.

Additionally, if policyholders believe that there are extra or additional damages not covered by the adjuster’s report / estimate, then they are given one year from the date of loss to sign and submit their proof of loss of damages. This is significant as policyholders can now get independent contractors or adjusters to evaluate and assess their damages to see if all damages were covered by the insurance company’s adjuster in his/her estimate.

Moreover, the memorandum makes clear that your insurance carrier is to pay your claim as quickly as possible.

To read the full memorandum, please click here.

The Brasher Law Firm is experienced in handling flood claims and issues surrounding flood insurance disputes. If you believe that your insurance company has handled your claim unfairly, please call us at (409) 832-3737 for a free consultation today.

The Truth about Insurance Law Changes

During the course of Hurricane Harvey ravaging Southeast Texas, Corpus Christi, Dickinson, Rockport, Houston and surrounding counties, like Jefferson, Orange, Hardin, Jasper, Tyler, etc…, speculation from both sides of the aisle spread like wildfire about what the new changes to the Texas Insurance Code would mean for victims of Hurricane Harvey. People barely made it to shelters, and the sponsor of House Bill 1774 (HB 1774), Senator Kelly Hancock, issued a press release claiming the bill would have “no impact on the insurance claims process”. Simultaneously, the group that lobbied for the bill for the past few years, Texans for Lawsuit Reform, tried to justify this bill by saying that “If your insurer does improperly deny or delay paying your claim, Texas has the strongest consumer protections in the nation for you, which will continue to be the case after September 1, 2017.” Yet, despite these statements, the State Bar of Texas president-elect, Joe Longley, strongly encouraged homeowners to file their claims before September 1, 2017 as the changes in the law could adversely affect them.

So where is the disconnect coming from? What Texans for Lawsuit Reform (also known as TLR) failed to mention is that this bill strips the so-called strong consumer protections that Texans used to have if their insurance company fails to timely pay a claim or unreasonably denies a claim. And despite Sen. Hancock’s statements, the bill will have an impact on the insurance claims process. Because quite simply put, the insurance companies will now have less of an incentive to pay you properly and timely.

How did we get here?:

TLR and the group of legislators that supported HB 1774 have been trying for years to get a bill like this passed. In the 2015 legislative session, Senator Larry Taylor, an insurance agent and state senator, tried to pass a similar piece of legislation. This piece of legislation became known as the “hailstorm bill” based on the large number of hailstorm claims that Hidalgo County and other parts of the Valley saw in 2012-2014, which then led to numerous lawsuits because of insurance companies not paying or adjusting these claims properly. Homeowners and business owners from across the state testified against the bill. And the bill eventually failed.

However, before the 2017 legislative session even began, Lt. Governor Dan Patrick made it a top legislative priority to pass the “hailstorm bill”. He even had the Senate Committee on Business & Commerce discuss the issues prior to the start of the legislative session to expedite the process. Thus, it was destined that the “hailstorm bill” would become revived in the 2017 Legislative Session, and with a Republican majority, certainly pass. But they did not simply leave it at only hailstorms – they included every single natural disaster in the new bill.

What does it mean for me?:

So what does the bill mean for you and how will it impact you?

First, if you want to file a claim for damages to your property, as a result of wind or rain damage, there are potential benefits to doing so before Friday, September 1, 2017. Here’s why:

  • The old Texas Insurance Code §542.060 allowed an 18% penalty interest if an insurance company delayed in paying your claim or failed to adhere to certain timelines under the insurance code in handling your claim.
  • The new Texas Insurance Code §542.060 cuts that 18% penalty interest by almost half (a 45% reduction) to only 5% on top of the interest that is already allowed by the Finance Code (about 5%).

So if your claim ends up being improperly denied, improperly handled, or not timely paid, then the insurance company would get away with a slap on the wrist instead of a much larger penalty.

How is the interest calculated or determined? Based on the timing of when you give notice of your claim. So, the advice that the State Bar of Texas president-elect, Joe Longley, is giving regarding filing claims before September 1, 2017 has merit.

Second, the majority of the bill is aimed at cutting protections for Texans once they file a lawsuit. Almost all Texans who suffered due to Hurricane Harvey won’t be filing a lawsuit before September 1, 2017, so the remaining of the bill’s changes and cuts to consumer protections will apply no matter if you file your claim before or after September 1, 2017.

These provisions will cut the amount your attorney can recover for his/her fees (which cannot legally be shared with you anyways, despite statements to the contrary) for working on your case and taking it all the way to trial and, in some cases, through the appellate process. Many of the attorneys working in this area of law have “contingency fee” contracts, which means, even if the claim takes years through the litigation process, they don’t get paid a dime until they recover something for you. Despite the fact that most insurance companies’ lawyers get paid by the hour, they still saw it fit to cut the contingency fee lawyers’ bills. This will discourage many lawyers from taking these types of cases and will leave many homeowners without local lawyers who can help them out.

If an adjuster messes up in handling your case – he / she is no longer liable for their actions. Instead, the insurance company can just take up their defense, and the lawyers are prevented from even telling the jury that the insurance company has taken up the adjuster’s defense.

The provisions will also make it easier for an insurance company to get cases filed against them dismissed. Pre-suit notice was always required even before this new law took effect. So the groups claiming that the point was to give pre-suit notice fail to inform you that this was always required. However, now, the insurance companies and our courts will determine if it is “sufficient” and if they feel as though it is not, the case will be dismissed. If you don’t give the insurance company, who has had multiple opportunities to handle your claim and inspect the damages, another bite at the apple to inspect your damages – then your case is automatically abates (meaning your lawsuit is basically put on hold).

So how can these groups claim that the protections are the same? Well, you’d have to ask them. In the meantime, The Brasher Law Firm is here to help you and we welcome your questions.

Where the Promises End and Bad Faith Begins – Part II

So you have paid your annual premiums for Long Term Care for 30 years. Now you need to collect. You are managing your parents’ account and you need to place a parent in an assisted living facility. Thank goodness you purchased long term care.

Think again.

The long-term care policy your parent purchased was written in a time when the basic long term care needs that your parent anticipated was nursing home, hospice, or home health care. Assisted Living facilities were new. But, Assisted Living Facilities have their own license through the state, provide round the clock nursing care, keep charts, require physician’s orders for admission, etc., so surely they are covered, right?

Wrong.

Many insurance companies like to hold you to that original agreement. And since it does not name “assisted living facilities” then they are not covered. None of the other facts matter. It doesn’t matter that when you purchased the policy you wanted coverage for whatever facility you would be required to live in (other than your home) that would cost extra. You bought the policy with those thoughts in mind. When the agent told you to add the endorsement for home health care, you did it to cover all your bases. But now, after paying $5000/year for over 30 years, the insurance company is denying your benefit. You get no value for that investment – no return – no dividend – nothing. The insurance company got the luxury of investing those funds for the last three decades and you get nothing.

Maybe you were denied for another reason than this. In any event, please contact our firm as we are looking for cases to take against insurance companies who are doing this. It is wrong. Insurance companies are supposed to put your interest on even terms with theirs – they are a fiduciary to you. We welcome the opportunity to see if they have kept their end of the promise they sold to you or your loved ones.

Nishi Kothari joins Brasher Law Firm

Brasher Law Firm is welcoming a new member to its elite team of attorneys. Nishi Kothari, a graduate of the University of Texas School of Law, who previously spent time as a Limited Partner at Arguello, Hope, and Associates, PLLC., is the newest addition to the Texas Law Firm. Ms. Kothari spent her time at Arguello, Hope and Associates, focusing her practice on homeowner’s insurance disputes. 
Her arrival comes on the heels of two successful trials, in which she teamed up with Brasher Law Firm to earn significant judgments for their clients.
While in law school, Ms. Kothari was awarded a public service scholarship, which she used to actively fight for the immigration needs of low-income individuals and families. 
Ms. Kothari is also an active member in the community. She is a member of the Houston Bar Association, Houston Trial Lawyers Association, and former Co-VP of Outreach and CLE for the South Asian Bar Association, Houston chapter.

Supreme Court defends Insurance Code while Republican legislatures try to destroy it

The Texas Supreme Court handed down a significant case on April 7, 2017, outlining the rights, duties, and remedies available to Texas policyholders. These rights are found in what we lawyers refer to as the Texas Insurance Code (“Code”). The Code provides protections against:

1. Unfair settlement practices

2. Misrepresentations

3. Late payments of insurance proceeds when a claim is filed.

While the Republicans in the Texas House and Senate are working hard to rob policyholders of their rights, being pushed by insurance lobbyist, the Republican-controlled Texas Supreme Court is doing the opposite. When confronted with a legal issue that questioned the very rights and protections available, the Court upheld and even strengthened those Code provisions. Maybe the Legislators should just leave it to the judges.

In USAA v. Gail Menchaca, the jury found that USAA violated the Code provisions, including, “conducting a reasonable investigation” and “failing to pay a claim when liability is reasonably clear.” The jury did NOT find that USAA breached the contract. In cases like this, both issues are submitted to the jury. And, if the jury finds for the plaintiff for both, the Plaintiff is left to choose between the two. But, in Menchaca, the jury only found the Code violations, not the breach.

Because of a lot of muddy jurisprudence, including requests by the defense bar to extend the law into these areas, Texas jurisprudence was left without a clear trail. USAA argued that unless there is a breach, that none of the Code provisions apply. Menchaca argued that violation of the Code provisions can support an award of policy benefits. Starting with the basic premise that an insurance agreement is a “unique type of contract” because the insurer has “exclusive control over the evaluation, processing, and denial of claims,” and can easily take advantage of its insured, has unequal bargaining power, the starting point is understanding that an insurance contract is not like other contracts. As a result, Texas law has added protections for policyholders. It would be silly now to ignore those protections.

The Texas Supreme Court agreed with Menchaca and found the following:

1. An insured cannot recover policy benefits as damages for an insurer’s statutory violation if the policy does not provide the insured a right to receive those benefits. Translation: Coverage, not breach, determines whether or not the Code provisions apply.

2. An insured who establishes a right to receive benefits under the insurance policy can recover those benefits as actual damages under the Insurance Code if the insurer’s statutory violation causes the loss of the benefits. Translation: If the jury finds a statutory violation, that finding can support recover of policy benefits (provided there was coverage).

3. Even if the insured cannot establish a present contractual right to policy benefits, the insured can recover benefits as actual damages under the Insurance Code if the insurer’s statutory violation caused the insured to lose that contractual right. Translation: Did the insurance company do something in the investigation that prevented the insured from asserting coverage?

4. If an insurer’s statutory violation causes an injury independent of the loss of policy benefits, the insured may recover damages for that injury even if the policy does not grant the insured a right to benefits. Translation: Stoker independent carve out stays the same – this is applicable even if no coverage.

5. An insured cannot recover any damages based on an insurer’s statutory violation if the insured had no right to receive benefits under the policy and sustained no injury independent of a right to benefits. Translation: Just summing up 1-4.

6. And fifth, an insured cannot recover any damages based on an insurer’s statutory violation if the insured had no right to receive benefits under the policy and sustained no injury independent of a right to benefits.

USAA Texas Lloyds Co. v. Menchaca, 14-0721, 2017 WL 1311752, at *4 (Tex. Apr. 7, 2017)

So, maybe now we can be rid of the tortured jurisprudence equating coverage with breach. I have personally witnessed counsel argue that based on the seminal case (pre-Menchaca) – Stoker – that the issue was breach, not coverage. But Stoker held that coverage was what triggered duties under the Code, not breach. Let’s hope those arguments now go away.

Maybe your representative and senator will consider this before deciding to re-write the Codes and removing protections from Policyholders.

Insurance companies and their lobbies paying a lot for change in the law

While Texas insurance companies are making money hand over fist, they are also claiming a litigation crisis is taking place that has forced them to alter and exclude certain coverages from their policies and increase premiums to policy holders. Meanwhile, insurance advocates are pressuring state lawmakers to change litigations laws that would adversely affect the policyholders they should be working for instead of against.

In Spring 2015, Senate Bill 1628 was introduced by Sen. Larry Taylor, a politician and owner of Truman Taylor Insurance Agency, that was touted it would rein in property insurance litigation. One aspect of the bill, had it passed, would have benefitted professionals by granting insurance adjusters and agents immunity from being held liable with litigation – essentially protecting himself from future lawsuits.

Insurance companies and agents are still fighting the so-called litigation crisis and in March 2016, at the request of the Senate Business and Commerce Committee – which Sen. Taylor is a member of – and House Insurance Committee, the Texas Department of Insurance requested information from insurance companies relating to hailstorm claims litigation. On October 5, 2016, TDI presented its preliminary findings to the Texas Senate Business and Commerce Committee. On December 1, 2016, the House Insurance Committee also was presented with the information. What the committees plan on doing with that information is still up for debate with the next legislative session which began January 10, 2017.

What is certain, however, is that members of the Texas Senate and Business Commerce Committee and the House Insurance Committee have been the recipient of nearly $4 million in campaign contributions from insurance companies and the political action committee Texans for Lawsuit Reform (TLR) – which looks to buckle down on hailstorm litigation as one of their main focuses, according to information available from the National Institute on Money in Politics.

Of Sen. Taylor’s $4.6 million in campaign contributions, almost $1.4 million, or 30 percent, has come from agencies and committees that have issues with the litigation crisis. Other members of the committees that were seeking information relating to hailstorm damage litigation that have received significant campaign contributions include: John Frullo, Chair of the Senate committee; Kenneth Sheets, Senate committee member; and Kelly Hancock, Chair of the House committee. Of all the campaign contributions these candidates received, 11 percent of Sen. Frullo’s, 19 percent of Sen. Sheets’, and 17 percent of Rep. Hancock’s came from insurance sources and the TLR.

Out of all the contributions the TLR has made to candidates running for office, Sen. Taylor has received the second highest amount of campaign contributions. Combined, these four lawmakers account of 73 percent of campaign contributions made by the TLR and 55 percent of insurance contributions to Senate and House committee members – which combined is comprised of 18 members.

While increased litigation has taken place in recent years, as Bryan Blevins stated during the October hearing, “Well, if claims aren’t getting paid, then people are going to be unhappy about that. You’re going to see more lawsuits.”

The logical conclusion is that there is no litigation crisis. It is merely a cause and effect situation that has been brought about because of big insurance companies trying to get over on the people that have paid their premiums for years by not holding up their end of the bargain.

While that may seem logical, the TLR and insurance campaign committees have paid significantly to key members of the committees, who are now acting in favor of insurance companies by bringing forth bills that would limit homeowners abilities to get their homes repaired.