Texas law easing insurer penalties takes effect amid Harvey

In this aerial photo, homes sit in floodwaters caused Tropical Storm Harvey in Port Arthur, Texas, Friday, Sept. 1, 2017. Port Arthur's major roads were swamped by rising waters brought by Harvey(AP Photo/LM Otero)

AUSTIN, Texas — A new Texas law pushed by the insurance industry kicked in Friday, a week after Harvey made landfall, softening the financial penalty companies could face if they are sued for dragging out homeowner damage claims.

Republican Gov. Greg Abbott signed the changes in May, but they didn't take effect until now, along with most other new laws passed this year in Texas. The destruction wrought by Harvey ignited calls to delay the start date, but Abbott has dismissed the backlash as overhyped.

The record-breaking storm flooded thousands of homes in the Houston area and along the southeastern Texas coast, where Harvey made landfall on Aug. 25 as a Category 4 hurricane.

State officials say few Harvey victims are likely to be affected by the insurance law changes, because they doesn't apply to flood claims or coastal residents covered by the state's insurer-of-last-resort.

Insurers sued for dragging out claims previously had to pay 18 percent interest if a court ruled against them. Now that penalty is around 10 percent, which lawyers and consumer advocates say won't incentivize insurers to act as quickly.

"The timing is obviously horrible," said Mark Lawless, an Austin-based attorney who clients are mostly businesses. "Nobody anticipated having a major event four days before the effect date. I don't think people focused on what that meant."

The latest figures released Friday by state officials show that more than 50,000 homes have suffered major damage or were destroyed entirely by Harvey. More than 200,000 others homes were affected or sustained minor damage.

Abbott this week criticized lawyers who urged Harvey victims to rush to file claims before the law took effect, or risk losing out.

"Any claims along those lines are absolutely bogus," Abbott said.

Must Read

Recent developments surrounding the South China Sea

Aug 7, 2017

Recent developments surrounding the South China Sea: China's foreign minister says talks on a long-sought code of conduct in the waters may finally start this year if "outside parties" don't disrupt

Tesla swings to loss in 4Q, says Model 3 on target

Feb 23, 2017

Unable to string together profitable quarters, electric car and solar cell maker Tesla Inc. is reporting a loss for the last three months of 2016

Qualcomm seeks to block iPhone imports in patent dispute

Jul 6, 2017

Qualcomm is seeking to block iPhone shipments to the U.S., arguing that the phones infringe on six of its patents.

People also read these

Recent developments surrounding the South China Sea

Aug 7, 2017

Recent developments surrounding the South China Sea: China's foreign minister says talks on a long-sought code of conduct in the waters may finally start this year if "outside parties" don't disrupt

Tesla swings to loss in 4Q, says Model 3 on target

Feb 23, 2017

Unable to string together profitable quarters, electric car and solar cell maker Tesla Inc. is reporting a loss for the last three months of 2016

Qualcomm seeks to block iPhone imports in patent dispute

Jul 6, 2017

Qualcomm is seeking to block iPhone shipments to the U.S., arguing that the phones infringe on six of its patents.

Weather, 20 December
Houston Weather
+7

High: +11° Low: -2°

Humidity: 83%

Wind: NNE - 7 KPH

Canberra Weather
+27

High: +27° Low: +17°

Humidity: 87%

Wind: W - 20 KPH

Roissy-en-France Weather
+6

High: +6° Low: -5°

Humidity: 87%

Wind: ENE - 7 KPH

Florence Weather
+9

High: +9° Low: +6°

Humidity: 97%

Wind: ENE - 17 KPH

Parga Weather
+7

High: +16° Low: +4°

Humidity: 100%

Wind: SE - 25 KPH