Wednesday, August 3, 2016

From SE Texas Record: Watchdog group asks Texans to keep arbitration out of insurance policies

For our look at civil law, among other things - including the possible agenda of the 85th Texas legislative session.

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Texas Watch, a self-proclaimed consumer protection group, recently launched a campaign urging Lone Star residents to tell the Texas Department of Insurance to keep arbitration out of insurance disputes.
“Arbitration clauses force consumers with disputes into closed, costly, and biased proceedings without any appeal or public record. For years, TDI rightfully rejected policies with these dangerous clauses,” reads a May 18 Texas Watch email sent to supporters.
“But, a new policy submitted to TDI could reverse this longstanding rule. The policy includes a binding arbitration clause, which would strip unaware consumers of their constitutional rights (to sue) in exchange for a discount.”
In December, Texas, after being absent from the top 10 for several years, reappeared on the American Tort Reform Association’s annual “Judicial Hellholes” report for the thousands upon thousands of lawsuits filed in Hidalgo County after a couple of 2012 hailstorm strikes.
Now, trial lawyers advertise heavily after every major storm in Texas, seeking to sign up as many clients as possible. As a result, hundreds to thousands of lawsuits are filed against insurance companies following a destructive weather event.
Steve Badger, a commercial insurance attorney and partner at Zelle LLP, says Texas Watch is directing their concerns at the wrong group.
“The insurance industry didn’t wake up on morning and say ‘hey, let’s add an arbitration provision to our policies,’” said Badger. “Instead, the insurance industry is reacting to what is going on in the market place – and that is thousands of hail damage lawsuits.”

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