One of the chief obstacles the people of Texas are facing right now is how to rebuild their lives after Hurricane Harvey. Homes, cars, and businesses were destroyed by the wind and rain last August, but for many of us, it might as well have been yesterday. Many families are still waiting for relief, and hundreds of homes and businesses remain devastated in Rockport, Corpus Christi, and beyond.
However, the obstacles people are facing aren't natural or inevitable—they're being intentionally created by the insurance industry. Even worse, the terrible consequences people are facing today is just one effect of the insurance lobby's years-long effort to destroy the laws that protect us.
How the Insurance Lobby Has Been Setting a Trap for Us
Our rights first took a hit in 2003 when the insurance lobby pushed for the passage of Senate Bill 14—a law that gave insurers more power over what they charged policyholders. Rates have since only gone up. The rise of rates (and the ability for insurers to decide where they service and how much they charge) created an impossible situation for homeowners and business owners. Low-to-middle income families were priced out of the coverage they needed, and that created far-reaching consequences.
For instance, due to for-profit insurance practices, coastal communities in Texas often only had one option for windstorm insurance: the Texas Windstorm Insurance Association (TWIA). In 2003, House Bill 3 tied up homeowners' hands by restricting their ability to dispute claims with the TWIA. Keep in mind that prior to 2011, a legal investigation revealed that the TWIA's system was designed to underpay or deny legitimate claims. In return for their behavior, the TWIA was granted even more power.
Harvey Is the Child of Bad Insurance Reforms
The relationship between insurance, consumers, and the law requires consumer protections. Without them, insurance companies have the power to cripple cities and destroy lives for the sake of profit. The previous generation of Texans knew that sort of power needed to be regulated. Many of you are beginning to see the need as well.
We're already seeing the effects of dismantling these laws:
- Only one-third of Harvey homeowner claims have been paid.
- Half of Harvey claims have been closed without payment.
- One-fourth of Rockport homes aren't livable spaces.
- One-third of Rockport businesses are still closed.
For-profit insurance is unlike other consumer products. The law requires us to buy insurance for our homes and cars. For mortgage loans, not qualifying for homeowners insurance is a dealbreaker. Building a future often requires us to go to insurers at some point in our lives.
Virtually no other private industry has the sort of power under the law that insurance companies do—that's why their practices need to be kept within tight boundaries through regulation. Otherwise, insurance companies will continue to be free to delay claims and wear down claimants until they give up or accept a settlement 30-50 percent smaller than what they deserve. As Ware V. Wendell, advocate for policyholders, once wrote: "When you're facing a giant in a legal fight, time and costs matter. Delay and expense favor the big guy and wear down the little guy."
If you need help facing your insurance company, call us for a free consult. Arnold & Itkin helps homeowners face their insurers on a level playing field—because we cover the costs of litigation, you'll actually have a chance to see your case through to the end as our laws intended.
Fill out a quick form to tell us what you need and we'll show you how we can help.