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Cravens Warren

Serving the risk management and commercial insurance needs of business. Cravens Warren, founded in 1946, has been serving the insurance needs of... read more

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  • 10011 West Gulf Bank
    Houston, TX 77040
  • Phone (713) 690-6000
    Fax (713) 690-6020
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Fact Check on HB 1774 - the "Blue Tarp Bill"

By Staff | Aug 29, 2017
Fact Check on HB 1774 -  the

Fact Check! There has been and continues to be incorrect information relating to the impact of House Bill 1774 on insureds' rights and obligations under their current policies and reporting of claims. If these posts and stories were intended to alarm and confuse the public, then those involved have achieved their goal. We want to help our clients understand the facts related to the new changes to the Texas insurance code.

What does House Bill 1774 do?

On September 1, 2017, House Bill 1774 will go into effect in Texas. Dubbed the "Blue Tarp Bill" by it's detractors, the law is intended to reduce the number of frivolous lawsuits against insurance companies for claims relating to earthquakes, tremors, wildfire, flooding, tornados, lightning, and wind, snow, and rain storms.

The new law has two primary components. First, if a policy holder files a lawsuit against the insurance company for failure to pay, paying too little, or not paying in a timely manner, the attorney for the plaintiff is required to provide additional details related to the basis and damages for the suit.

Secondly, in the event that the insurance company is liable, the new amendment to the Texas Insurance Code reduces the amount of penalty interest from 18% to around 10%.   

The new law only applies to private insurance companies, so the majority of flood insurance claims, roughly 86 percent of all flood insurance policy holders, would not be affected since they are underwritten by the NFIP (National Flood Insurance Program). Wind and hail damage claims covered by TWIA (Texas Windstorm Insurance Association) are also exempted.

Facts about HB 1774

  • The normal claims process has not changed.
  • Consumers continue to have a full-range of remedies in the event an insurer acts fraudulently or in bad faith.

  • Lawsuit-abuse legislation (HB 1774) applies to lawsuits filed after September 1, 2017.

  • The Texas Department of Insurance will, as always, in catastrophic events, be monitoring the activities of insurance companies to make sure that claims are being paid properly and promptly. 

  • Texas has the strongest consumer protections in the nation against insurers that unfairly deny or delay claims.

At Cravens Warren, we are here to: