IBA South: “Storm-chasing” lawyers drive mass hail litigation, Texas House told

IBA South: “Storm-chasing” lawyers drive mass hail litigation, Texas House told | Insurance Business

IBA South: “Storm-chasing” lawyers drive mass hail litigation, Texas House told
A tort reform advocate has argued that “storm-chasing” trial lawyers are driving the surge in hail litigation, placing a burden on Texans in the form of tort tax, the Texas House Insurance Committee has heard.

Lee Parsley, an attorney for Texans for Lawsuit Reform (TLR), said in a testimony that the current hailstorm litigation environment has seen its greatest abuse in years, Southeast Texas Record reported.   

“We are seeing an enormous spike in lawsuits following hail and wind events in Texas… and we can find no explanation other than lawyer activity,” he said. “It is a tort tax. It is a hidden tax upon all of us when there is abuse… and it is a drag on our economy – that’s why TLR is involved,” Parsley said.

According to Texas Department Insurance (TDI) data, there have been increases in hail claims involving an attorney or public adjuster since 2012.

TDI also found that some insurers, mostly smaller companies, have begun to reduce coverage and raise deductibles, particularly in storm litigation hotbeds such as South Texas and the Panhandle, the report said.

Parsley has accused hail attorneys of “manufacturing lawsuits for their own business purposes and not for the protection of consumers.”

The data he presented to the assembly highlighted the increase in hail lawsuits filed against Texas insurers in recent years. From hundreds of lawsuits filed each year from 2006 to 2011; it doubled from 2011 to 2012; doubled again from 2012 to 2013; and doubled once more from 2013 to 2014, reaching nearly 11,000 hail lawsuits filed in 2014 alone, Southeast Texas Record reported.

In the first half of 2016, insurers have paid $3.2 billion in hail losses, far surpassing the 2015 record of $1.9 billion which was then the most ever paid by insurers in a single year, according to TDI.

“Since this wave started in 2012, we’ve had more than 34,000 (hail) suits filed all over the state of Texas,” Parsley said, adding that some counties that previously averaged only single digit property and casualty insurance suits yearly have now reached hundreds.

The cause, said Parsley, was storm-chasing lawyers who advertise for claims, going as far as canvassing door-to-door in some cases, the report said.

Parsley said: “The game is to file as many lawsuits as you can and overwhelm the insurance companies, overwhelm the system and in every case overstate the damages by the largest number you can.”

Parsley said that ultimately, what the TLR wants is for a legislation that would prevent lawyers from chasing storms while protecting the insured’s right to sue.

“We have to stop these lawyers from chasing storms, because it will cost us all money in the long run,” he said.

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