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In Texas, businesses side with consumers on insurance bill (kind of)

A bill currently under Texas Senate consideration has, in a somewhat rare turn, joined consumers and businesses together in a fight against the state government. Namely, both groups stand in opposition to Senate Bill 10, a piece of legislation that would make it more difficult for insurance policyholders to collect payment after a natural disaster.

Lawmakers contend that SB10 is necessary "to stop greedy trial lawyers from cashing in on hail damage lawsuits," according to a report in the Texas Tribune. But the bill generated a great deal of backlash from corporate entities, who claim it would "thwart Texas businesses from recovering legitimate claims under insurance policies they purchased at great cost."

Given the opposition, it remains uncertain whether the bill and its companion in the Texas House of Representatives, HB 1774, will pass.

There's no there there-or any hail

Supposedly, SB10 was intended to curtail a single, specific problem - the proliferation of lawsuits that have recently begun to define the aftermath of any hailstorm. It "guts the effectiveness" of the Prompt Pay statute, a measure implemented in 2005 that compels insurers to pay claims quickly.

However, the word hail itself does not appear in the legislation, leading many to worry that compensation will become difficult to recover in all types of claims. Businesses opposed to the measure include 7-Eleven, La Quinta Inns & Suites, Sovereign Bank, and multiple oil companies.

"The insurance bill does more to harm Texas business policyholders than it does to prevent litigation abuses by homeowners," critics note. Meanwhile, trial lawyers - who represent homeowners - have also argued that making it harder to collect on insurance claims is a disservice to residents. Unfortunately, they don't hold the same political sway as their corporate counterparts.

Not the first time

Lawmakers tried to pass similar legislation just two years ago, and faced similar blowback from corporate interests. It's interesting, then, that their attempts to narrow the bill's scope seem not to have narrowed it much at all - the proposal may be new, but the complaints against it are the same.

More alarming still are the effects the legislation could have on individual homeowners. While frivolous lawsuits are a real issue in Texas, there nevertheless remain real victims of real catastrophes. Yet they seem to be largely left out of the discussion.

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