Hurricane Harvey: Anticipating a Flood of Claims and Litigation

The aftermath of Hurricane Harvey will include a surge in insurance claims by homeowners and commercial entities. Property and casualty insurers should be aware of a Texas insurance reform law relating to claims dispute litigation and recent directives issued by the Texas Department of Insurance.


House Bill 1774, signed into law by the Texas Governor in May 2017 and effective on September 1, 2017, will impact the process for insureds to initiate claims dispute litigation in Texas. The new law includes a 60-day written notice period before a lawsuit can be filed and imposes relatively short follow-up deadlines on insurers once notice is given. House Bill 1774 also reduces the amount of interest that can be awarded to a claimant and imposes new limits on recoverable attorney fees.

As noted in an August 31, 2017 Statement issued by Ken Paxton, Attorney General of Texas, HB 1774 does not impact claims under the federal flood insurance program or Texas windstorm Insurance Association. Although Attorney General Paxton’s Statement notes that “the legislation does not change the claim filing process or the time for filing claims”, the provisions of HB 1774 (and perhaps the urging of the plaintiffs’ bar) make it likely that some policyholders will try to submit claims before the September 1, 2017 effective date. In any event, the application and import of the new restrictions on interest and fees is sure to be at issue in cases filed by individual claimants and proposed class representatives.

The full text of HB 1774 is available here.


While additional pre-litigation dispute requirements may still be issued, TDI has already issued several bulletins offering guidance to insurers related to Hurricane Harvey. The bulletins issued to date, provide guidance (some of which likely presages the claims, coverage disputes and putative class action claims to come. We have outlined some of the guidance here and provide a few examples below:

  • “It is the opinion of the Texas Department of Insurance that it is inappropriate for insurers to re-rate, cancel, nonrenew, or refuse to provide coverage due solely to a policyholder’s status as a victim or evacuee of Hurricane Harvey. Further, it is not reasonable to change a policyholder’s rating classifications or increase their insurance rates solely because they are a victim or evacuee of Hurricane Harvey.
  • “TDI encourages carriers to provide relief to those policyholders in counties covered in the governor’s proclamations, including the suspension of premium payments to allow continuing insurance coverage. In conjunction with this effort and in accordance with the governor’s proclamations, TDI will work with carriers to minimize the regulatory effects of a carrier’s suspension of premium payments, specifically in regard to financial review requirements. The term “suspension” is not intended to mean the forgiveness of the premium. Carriers are encouraged to work with policyholders in the collection of premiums, including payment plans.”

A full list of Harvey-related TDI bulletins may be found online here.

For more information, please contact one of our experienced Catastrophe Litigation and Dispute Resolution Lawyers and Insurance Regulatory lawyers, including those listed here: