Month: August 2017

Texas New Insurance Law

Don’t Believe Everything You Read About The New Insurance Law – Especially When It Comes From Lobbyists

Contrary to what Texans for Lawsuit Reform wrote in its press release, the reduction of the penalty interest rate will disincentivize prompt payment during the claims process

Recent changes to Texas insurance law are set to have a considerable impact on Texans affected by Hurricane Harvey. This week, the lobbyist group Texans for Lawsuit Reform (TLR) issued a widely distributed press release concerning the recent changes to Texas insurance law.  In it, they say, “the new law does not affect the claims process.”  They say it “affects only the lawsuits that sometimes follow the claims process.”  They even say, “it does not create a new deadline for action by policyholders.”  There’s quite a bit of confusion about this new insurance law, and to be honest it isn’t very well written, but these statements from TLR aren’t correct.

Less than 1% of claims arising out of a major natural disaster actually result in lawsuits, so contrary to what TLR has distributed, this is very much about the claims process. The better and quicker that process is handled, the less likely it is that the claims process will lead to litigation. The goal of consumer protection laws is to put financial incentives in the right place and avoid litigation. When it comes to insurance, the stronger the penalty for non-compliance, the more likely it is that an insurance company will comply with the law during the claims process so that litigation can be avoided. Reducing the penalty interest rate by nearly 50% disincentives insurance companies to complete and conclude the claims process in a timely and efficient manner. It gives them a financial incentive to hold onto claims payment money longer. It materially affects the promptness with which the claims process is conducted, and it very much matters to Texans.

The part of the new insurance law that everyone is concerned about right now are the amendments to Section 542.060 of the Texas Insurance Code reducing the interest rate from 18% to 10%.  And for Section 542.060, September 1, 2017 is a very important date, because if you notify your insurance company of a claim on or after that date, the rate they must pay if the claim is unlawfully denied is cut nearly in half. This is the case regardless of whether or not a lawsuit is ever filed.

Section 542.060 has been around for a long time, and it has always required the payment of penalty interest on unlawfully delayed insurance claims, regardless of whether a lawsuit is filed.   In fact, our firm has seen many occasions where responsible insurance companies voluntarily complied with this law and paid the 18% interest during the claims process if their first estimate was understated, even in the absence of lawsuit or court order requiring them to do so.

The payment of penalty interest when a lawsuit is filed is treated differently that the ordinary claims process under the law. Under Section 542.060, a recalcitrant insurer must pay penalty interest any time a claim is unlawfully delayed, but they must also pay attorneys’ fees if that delay results in litigation.   This distinction for claims that result in litigation is addressed by a subsection of 542.060, which only requires the payment of attorney’s fees if a lawsuit is filed.

The TLR press release is misleading, because it inaccurately claims that the new insurance law only affects lawsuits and not the ordinary claims process. The reduction in interest materially affects the claims process, because it disincentives insurance companies to act promptly and efficiently. Now they will pay half as much interest if they unlawfully delay a claim during the claims process. At this point, most of us have probably figured out that TLR had a draftsman’s role in House Bill 1774, and they intended its application to the claims process when they designed two different effective date provisions, one for “an action,” and a separate one for “a claim.” Our state lawmakers may be confused about this, but it’s a safe bet that TLR isn’t.

Don’t Trust Everything You Read About The New Insurance Law

So the bottom line is this: If an insurance claim is made before September 1, 2017, then 18% interest applies to the claim if the insurer delays payment.  If the claim is made on or after September 1, 2017, then the new 10% interest rate applies.  And as TLR accurately points out, all of this applies to state law claims, which do not include flood claims made under a National Flood Insurance Program insurance policy. If you have a flood claim under an NFIP policy, your claim is not affected by the new Texas law. But if you have a wind claim or even an excess flood policy issued outside of NFIP, then the prudent course of action is to notify your insurer of your Hurricane Harvey claim before this Friday, September 1, 2017.

After all, there just may be a reason why TLR is suggesting otherwise.

Lawmakers from Hurricane Hit Communities Enabled and Voted for the Insurance Bill

Texas Lawmakers From Some of the Hardest Hit Communities Voted For House Bill 1774

As the damage caused by Hurricane Harvey continues to worsen in the heavily impacted areas, local heroes have emerged.  The long list of first responders, civic leaders, and volunteers include Aransas County Emergency Management, Texas Task Forces for Search and Rescue, numerous departments of public safety (DPS), and scores of local fire and police departments. Thousands of local citizens have donated boats and time to perform impromptu rescue services and over 3,000 local search and rescue operations have been completed.  True leadership is emerging – Constables are riding along with their men and women and personally carrying out these rescue missions.  Even Houston Texans star J.J. Watt has waded in, personally donating $100,000.00 and setting up a donation website.

While we celebrate these first responders and heroes in our communities, we also need to be mindful of how poor leadership can have devastating impacts on damaged communities, and there are glaring examples of that as well.

The powerful, foreign insurance lobby used local Texas legislators, lobbyists, and downtown lawyers to pass House Bill 1774, which creates new challenges for Texas families, small businesses, churches, and property owners.  This part could not be made up – the law takes effect this Friday, September 1, 2017.  The insurance companies and financial institutions behind this damaging new law are based far away from Texas and its impacted communities. Many are based on Wall Street, in Massachusetts, and as distant as London, Zurich, and Tokyo.  But these foreign insurance carriers could not pass the laws themselves, they needed local Texas enablers willing to push the legislation forward, putting foreign interests above the well-being of Texans and our communities.

Galveston, Dickinson, League City, and other local communities fighting through this natural disaster have their local Representative, Greg Bonnen, to thank if their insurance carriers do not fully and promptly pay their storm claims.  Bonnen authored and pushed this anti-Texan legislation through. Harvey-impacted citizens in Matagorda, Lake Jackson, Angleton, and Brazoria can ask Dennis Bonnen why he sponsored House Bill 1774.  Look to see whether your own local Representative sponsored this legislation, but be prepared to be disappointed – there were over 65 Texas sponsors.

Rockport and Corpus Christi remain devastated by this Category 4 Hurricane, and what benefit to Texans could Corpus Christi and Rockport State Representative Geanie Morrison have possibly identified when she co-sponsored this insurance bill, making it much harder for her own constituents to hold an insurance company accountable for unlawful behavior. Those in West Houston should closely analyze whose interests Representative Dwayne Bohac had in mind when he sponsored the insurers’ windstorm bill. In Friendswood, Texas Senator Larry Taylor carried the water for the conglomerate foreign insurance carriers as he sponsored the Senate version of the bill.  Houston Senator Paul Bettencourt did the same.  Numerous other Texas State Representatives and State Senators failed to stand up to the out-of-state insurance lobby.  Their communications teams will likely laud their civic participation in helping clean up after Hurricane Harvey, despite their detrimental work authoring, sponsoring, and voting for House Bill 1774 instead of look after the property rights of Texas families and businesses.

Texas Lawmakers Picked Big Foreign Insurers’ Money Over Texans’ Property Rights

As citizen-heroes continue to pour in to help their neighbors all along southeast Texas, it is important to pay tribute to what makes Texas truly great – courage, even in adverse times, and a willingness to fight for what is right.   It is also important to identify what Texas legislators voted to benefit foreign insurance and financial institution interests, rather than their own neighbors, friends, and family members.

Hurricane Harvey Insurance Claims

Hurricane Harvey Insurance Claims Misinformation

There is a quite a bit of incorrect information floating around about Hurricane Harvey and notice of an insurance claim, some of it propagated by pseudo first party insurance law experts, or honestly, lawyers who don’t know what they are talking about. Homeowners just trying to help are jumping into the fray, and repeating some of this incorrect information. There’s particular confusion about what the impact of notice on or after September 1, 2017 will be, and even some confusion about the types of policies the new law applies to. Let’s clean some of this up, because the notice requirements differ based on the type of policy. And next to ensuring the safety of your family and friends and protecting your property, nothing is more important right now than understanding the logistics of how and when you should notify your insurance company of a claim.

The new Texas insurance law applies to wind claims, not flood claims. The differences are discussed in more detail below, but here’s the key takeaway: Policies that cover wind claims are governed by state law, so the new rules apply to wind claims. Policies that cover flood claims are governed by federal law and are part of the National Flood Insurance Program, which in turn is part of FEMA, so the new Texas rules do not apply to flood claims.

The impact of notice on or after September 1, 2017 only affects the interest rate on unlawfully delayed claims: Here’s where people are getting the most confused. The new law goes into effect on September 1, 2017 in all its glory. There’s nothing you can do to suspend its application. It applies to any lawsuit filed after that date – which means the new Texas insurance law will impact every lawsuit arising out of Hurricane Harvey. There is one, and only one exception to this. If you file your claim with the insurer before September 1, 2017, then the existing interest rate of 18%, and not the new rate of 10%, applies to unlawfully delayed claims. The information circulating that suggests notice prior to September 1, 2017 can suspend application of the new law in its entirety is just flat wrong. Like it or not, the new law will apply to virtually every single Hurricane Harvey claim. Notice before September 1, 2017 only affects the interest rate, but that’s a pretty big deal.

Why the 18% interest rate matters: Having handled many hundreds of lawsuits arising out of unlawfully handled Hurricane Ike claims, and literally thousands of first party insurance cases over a 25 year period, here’s what I know. The largest stockholders of most of the major insurance companies are massive asset managers like Vanguard, BlackRock, and State Street. They control trillions of dollars in assets, and have more money than many states or countries. And that means you can’t hurt them. You can’t teach them any lessons. The only thing that matters to them is the math. That’s why the interest rate is so important. At an 18% interest rate, an unlawfully delayed claim payment will cost a recalcitrant insurer an additional 50% of the value of the claim over two years, and after four years, they must pay twice the value of the claim. But at 10% interest, they can delay payment for a full ten years before the interest penalty doubles the value of the claim. Time is money, the insurance industry knows it, and the Texas legislature just cut the penalty for insurers who wrongfully delay property damage insurance claims by 45%. Of all the ways in which lawmakers betrayed the communities they represent, including some from the areas most affected by Hurricane Harvey, this windfall to the insurance industry hurts the most.

Let’s go over some specifics about providing notice after Hurricane Harvey:

Notice of a flood claim: In the most general terms, a flood insurance policy covers water rising up from the ground and seeping into a building or home. Much of the Houston area experienced flood damage. Flood policies are usually written through insurance companies, but they are part of the National Flood Insurance Program (NFIP), which in turn is part of FEMA. Not everyone has flood insurance. If you are in certain flood prone areas, a mortgage company will require flood insurance. But if you aren’t in a flood prone area, then flood insurance is completely voluntary and you are limited in what you can buy. You should give your flood insurance company notice of the claim right away, and you have to complete a proof of loss within 60 days of the loss. FEMA often extends the proof of loss date for major natural disasters, but you can’t count on that occurring. Our friends at United Policyholders have posted some valuable information about the flood claims process. A flood claim written on an NFIP backed policy is not subject to the September 1, 2017 time considerations under the new Texas law.

Notice of a wind claim: A standard homeowner’s insurance policy or commercial insurance policy will cover may different perils, including wind damage from hurricanes and tropical storms. If water comes into the home or building through a “storm created opening,” such as roof or window damage, then this type of policy should cover the loss. A wind loss claim is subject to the September 1, 2017 time considerations under the new Texas law. To avoid the 45% reduction in the interest rate, you must get notice of a wind claim loss on file with your insurance company before this Friday, September 1, 2017. And to avoid any miscommunications, it’s best to do this in writing.

What happens if there is both wind and flood damage, or you aren’t sure about the cause?: That’s simple. Give notice of both claims. Sometimes, it takes an engineer or other specialist to determine the cause of a loss, that is, whether it’s from wind, flood, or even non-covered items like wear and tear or manufacturing defects. If you don’t know, that’s ok, but be prudent and provide notice to both your flood insurer and your wind insurer.

Why did this change in the law happen?: Now that’s a great question. There are a handful of reasons, and more than a handful of culprits. We’ll address some of the why’s and who’s in future blog posts, and there’s blame to go around, but here’s some food for thought right now. Some of the biggest proponents of this new law, it’s author and sponsors, the people that overreached and overcorrected a perceived problem and helped the insurance industry grab and take liberties with Texas, some of these scoundrels who betrayed their communities, their friends, their family members, the same ones who are boasting of their efforts on social media right now, some of these state representatives and senators come from districts heavily impacted by Hurricane Harvey. We’ll point them out shortly.

Hurricane Harvey Claims

Critical Information About the Timing of Notice of Hurricane Harvey Claims

Hurricane Harvey has caused devastating damage all along the Texas coast. For property owners who have suffered damage, it is incredibly important to file an insurance claim as quickly as possible. Policyholders need to make sure their Hurricane Harvey claims are on file with the insurer before September 1, 2017.

There is an important nuance to the recent changes to the Texas Insurance Code.  Any lawsuit filed on or after September 1, 2017 will be subject to the new law which limits the amount of compensation a policyholder can obtain.  However, there is one partial exception: If a claim is made before September 1, 2017, then the 18% interest rate applies to delayed payment violations rather than the new 10% rate.

A CLAIM means a first party claim MADE by an insured, payable to the insured by the insurer, caused by forces of nature such as a hurricane or tropical storm. In the event the claim is made before September 1, 2017, the 18% interest rate will apply if there is a Texas Prompt Pay Act violation, regardless of whether a lawsuit is filed on or after September 1, 2017 (or ever filed at all).

The new rules reference that the claim must be MADE by the insured. While we interpret this to mean that notice of the claim must be sent to the insurer by the insured or a representative such as a public adjuster, we recommend you use the following procedure:

  • Submit a written notice of loss form to the insurer. Do not rely solely on a verbal notice of loss.
  • The insured should sign the notice of loss. While it is a reasonable interpretation of the statute that a public adjuster may sign the notice on behalf of the insured, we recommend that the insured sign the notice.
  • Keep proof that the notice was submitted. This can include a copy of an email, proof of an online submission, fax confirmation or other documented confirmation that notice was made including the date and time of the notice.
  • The insurer must acknowledge the claim in writing within 15 days of notice. Verify that the acknowledgment of notice you receive from the insurer reflects the correct date.

If a Hurricane Harvey claim is made on or after September 1, 2017, the interest rate will be reduced from 18% to 10%, so a non-compliant insurer will enjoy a 45% savings windfall in the rate it will pay when it violates the Texas Prompt Pay Act. To be sure, the other changes in the new insurance rules, such as the notice and inspection requirements, will apply since just about any lawsuit would be filed well after September 1, 2017. But the difference in the penalty interest rate for claims made prior to September 1, 2017 is significant, so policyholders and their representatives should act promptly to ensure that notice is provided in writing before September 1, 2017.

hurricane harvey

Stay Up To Date On The Latest Hurricane Harvey News

All along the Texas coast, people are preparing for Hurricane Harvey. Gathering supplies, prepping properties, and filling up your gas tank can help you weather the storm, and it’s incredibly important to stay up to date on the latest developments of Hurricane Harvey

Raizner Slania LLP recommends following updates from the Forensic Weather Consultants on both their Facebook page and website as well as the National Hurricane Center at the National Oceanic and Atmospheric Administration.

Oftentimes during natural disasters, misinformation is spread, potentially placing you and your family in even more danger. The Forensic Weather Consultants and the National Hurricane Center are reputable sources Texans can trust regarding the development of Hurricane Harvey.

While Hurricane Harvey is anticipated to make landfall Friday night or Saturday morning, the dangers for much of Texas could last into early next week. As hurricanes reach land, they can produce huge storm surges and high winds. Once a hurricane makes it onto land, the storm has the potential to drop another up to several feet of rain.

Hurricanes become very unpredictable once they make landfall. Residents in the path of the storm need to understand conditions can change very quickly. Continually monitoring weather reports and abiding by all mandatory evacuations, storm warnings, and watches issued by the National Weather Service is the best way to keep you and your family safe.

Safety Tips For The Storm

  1. Stay away from windows. High winds can cause many types of damage. If winds are powerful enough, small objects or even tree branches can be picked up and hurled through windows. For this reason, it is advised that all people avoid windows during storms.
  2. Stock up on water. You can buy bottled water at the grocery store, but it is also advisable to fill up bathtubs, sinks, and pots and pans with water. This will help insure plenty of water for your family in the event of a power or water outage.
  3. Generators need to be in open spaces. Do not operate your generator indoors, even with the door open (this includes inside a garage, too). Generators produce deadly gases and need to be kept in open spaces to allow for proper ventilation.
  4. Extinguish all candles and flames. If you are using candles or other flames in your home or business for light, be sure to extinguish them before going to sleep. Never leave any flame, not matter how small, unattended for even a few minutes.
  5. Bring pets indoors. Make sure all of your pets are kept safely inside your home.
MRSA Infection Lawsuits

Florida Couple Files MRSA Infection Lawsuit

Raizner Slania has filed a MRSA infection lawsuit on behalf of a Florida couple against 3M Company and Arizant Healthcare after the husband suffered a severe infection from the company’s Bair Hugger warming blanket.

In January 2014, the husband underwent a bipolar left hemiarthroplasty in which the head of the femur is replaced with an artificial implant. During the scope of the procedure, the Bair Hugger warming blanket was used to regulate his body temperature. However, the Bair Hugger also introduced contaminants from the operating room air into his open surgical wound, causing him to develop a periprosthetic joint infection. The pathogen identified was MRSA.

Methicillin-resistant Staphylococcus aureus, or MRSA as it is commonly referred to, is a strain of the common Staph infection that has grown resistant to antibiotics. Because of its resistance to the antibiotics normally used to treat infections, MRSA is often called a “super bug.” MRSA infections in joint replacement patients are particularly dangerous. Ordinarily, the presence of bacteria triggers the body’s immune system response, but bacteria present on artificial joints does not. This means the infection can go unchecked by the body.

Although MRSA is incredibly rare in nature, it can often be found in hospitals. MRSA can cause severe complications and even death. For patients who have contracted MRSA, extensive medical treatments must be undertaken to treat the infection.

As a result of the plaintiff’s own MRSA infection caused by the Bair Hugger, he underwent multi-staged removal and replacement surgeries, placement and removal of antibiotic spacer, irrigation and debridements, and long-term PICC line antibiotics. Additionally, he had to undergo a trochanteric osteotomy (an additional hip replacement surgery), open reduction and internal fixation of trochanter, excision of sinus tract, and sciatic nerve release/neurolysis.

The Florida couple believes 3M and Arizant were blatantly negligent in their failure to warn doctors and patients of the infection risk associated with the device. They also allege the Bair Hugger is defective in design and manufacture.

MRSA Infection Lawsuits

If you suffered a MRSA infection after a hip or knee joint surgery, you may be able to file a claim against the manufacturers of a warming blanket used during your hospital stay. The experienced medical device attorneys at Raizner Slania can analyze your situation and help you understand your legal options. Contact us today for a free consultation.