Bankers. Car dealers. Convenience stores. A hotel chain. They're about as business-oriented as you can get.
But in recent days, they have been sounding the alarm about legislation — pushed as a pro-business answer to money-hungry trial lawyers — that critics say would stack the deck in favor of insurance companies at the expense of businesses and homeowners.
At issue is Senate Bill 1628, by state Sen. Larry Taylor, R-Friendswood, which supporters say would help consumers by preventing unnecessary increases in deductibles and premiums. The bill is a top 2015 priority of Texans for Lawsuit Reform, and it’s being described as the new generation of “tort reform,” or restrictions on lawsuits waged against people or companies by plaintiffs’ lawyers.
It passed the upper chamber on a party-line vote, but as the bill makes its way toward the floor of the Texas House, a slew of opponents — companies, pro-business trade associations, the Texas Association of Rural Schools, the Texas Mortgage Bankers Association and, most recently, AARP — all say the bill would leave them at a disadvantage in disputes over property damage claims. They are urging lawmakers to yank it from consideration.
Longview transportation company executive Ruben Martin, founder of East Texans Against Lawsuit Abuse, wrote House Speaker Joe Straus that in a rush to correct legitimate abuses of “storm chasing attorneys,” lawmakers are on the verge of going a step too far.
“While I have been a long-term supporter of tort reform in Texas, I cannot support” the legislation, his letter said. “It could make it difficult for businesses who suffer an insured loss to obtain prompt and full payment for such loss from the insurer. As a result, passage of the bill may make Texas a less desirable state in which to do business.”
The bill would make broad changes to the way homeowners and businesses can sue insurance companies that don't deal with them fairly, or don't adequately pay out on claims made under property and casualty insurance policies, such as losses after a storm, fire or accident.
The bill would establish a two-year time limit on seeking claims. And before insurance companies could be sued for deceptive acts or unfair claims handling, policyholders would have to provide advance written notice, sign a statement attesting that damages occurred and show proof of the damages. It would also lower the penalty that insurance companies face for late payments.
Taylor's office referred all questions about the bill to its House sponsor, state Rep. John Smithee, R-Amarillo.
Smithee said the bill's critics are overlooking the fact that it has been softened significantly since it was filed.
“Most of the emails that have been generated were generated based on the Senate bill and not the House committee report," he said. "There are several changes that are significant to litigation."
Smithee said the House version no longer includes a Senate provision protecting insurance agents from being sued if the insurance companies took responsibility and paid the damages.
"We even softened that [and said] in the House version if there’s any need to have agents in the suit, in other words if it would harm the policyholder not to have the agent [in the suit] … then the agents should be brought in," Smithee said.
Supporters of the sweeping changes point to claims resulting from a 2012 hailstorm in the Rio Grande Valley as proof the current system is being gamed.
TLR spokeswoman Sherry Sylvester said critics have been "grossly misinformed" by trial lawyers, who stand to lose millions of dollars if the bill passes.
"TLR and our supporters statewide are fully committed to passing this pro-consumer bill which is essential to prevent increases in insurance deductibles and premiums and other negative changes in insurance coverage," she said. "Like everything TLR advocates, SB 1628 is good public policy."
Opponents claim that argument is a red herring. They point to state data showing that Texas had more hailstorms in 2012 than in any other year from 2010 to 2014.
"While I appreciate the sponsor's intent to address perceived abuses in pursuing hailstorm claims in South Texas, unfortunately, the proposed bill goes far beyond its stated intent. Nothing in the bill even mentions hail claims," said Thomas Mastor, CEO of Sovereign Bank of Dallas, in a letter to Straus. "In fact, if the bill is passed not only will it impact those attempting to recover on hail claims in South Texas, but it will negatively impact every type of business that attempts to have legitimate business claims paid by insurance companies."
Others who want to see the bill stopped are asking ordinary Texans tell their stories to prove the issue isn't a feud that only affects tort reformers and trial lawyers.
"Please do not vote yes on this bill it will cripple so many honest homeowners," wrote an AARP member from Dallas that the group would only identify as Patricia. "I had to have a roof replaced over 5 years ago and my insurance denied my claim. I had to request arbitration before they would finally pay the claim. It took over 5 months of arguing with them and going through the arbitration process."
Should the legislation advance and be voted out of the House Calendars Committee, it's unclear if there's enough time to get it to the House floor for a vote. The deadline for the lower chamber to pass out Senate bills is May 26.
Disclosure: AARP and the Texas Mortgage Bankers Association are corporate sponsors of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.