Texas House Bill HB4419

Texas 2021 - 87th Regular

Caption

Relating to settlement and resolution of claims against the Texas Windstorm Insurance Association.

Impact

One of the critical impacts of HB4419 is the introduction of an interest penalty for delayed payments by the TWIA. If the association fails to make a payment within the mandated timeline, an interest rate of 18% per annum will apply to the outstanding claim amount until it is fulfilled. This change is expected to incentivize the timely processing of claims and add a layer of accountability for the insurance association. Additionally, it aims to streamline dispute resolution processes by providing clearer guidelines on how claim disputes should be handled.

Summary

House Bill 4419 is designed to modify the laws governing the settlement and resolution of claims against the Texas Windstorm Insurance Association (TWIA). It amends sections of the Insurance Code that dictate how claims are filed and processed, particularly emphasizing claim timelines and required notifications. Most notably, the bill stipulates that insured individuals must file claims within one year of the damage occurrence and only need to file once per event, consolidating claims under the same event. This provision aims to simplify the claim-filing process for insured parties.

Contention

While HB4419 seeks to improve the claims process, potential points of contention may arise regarding how the bill impacts the authority of the TWIA and the balance of power between insurers and insured individuals. Provisions that enable claimants to recover damages when the association mishandles claims could lead to increased litigation. Critics might argue that this could also lead to higher insurance costs as TWIA adjusts its policies in response to the risk of increased claims. Moreover, the definition of 'intentional mishandling' may also lead to disputes over interpretation and claims made by insured individuals against the association.