Hayes Bill Makes Homeowners Name A Price Before Suing Insurers

The text as introduced · 1,831 words

89R3560 SCL-F

By: Hayes
H.B. No. 4020

A BILL TO BE ENTITLED

AN ACT

relating to presuit notice and inspection requirements associated

with, and certain liability in connection with, certain insurance

claims for property damage.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 542.060(c), Insurance Code, is amended

to read as follows:

(c) In regard to a claim that is subject to [ an action to

which ] Chapter 542A [ applies ], if an insurer that is liable for the

[ a ] claim under an insurance policy is not in compliance with this

subchapter, the insurer is liable to pay the holder of the policy,

in addition to the amount of the claim, simple interest on the

amount of the claim as damages each year at the rate determined on

the date of judgment by adding five percent to the interest rate

determined under Section 304.003, Finance Code, together with

reasonable and necessary attorney's fees. Nothing in this

subsection prevents the award of prejudgment interest on the amount

of the claim, as provided by law. Interest awarded under this

subsection as damages accrues beginning on the date the claim was

required to be paid.

SECTION 2. Section 542A.003, Insurance Code, is amended by

amending Subsections (b) and (g) and adding Subsections (b-1),

(b-2), and (b-3) to read as follows:

(b) The notice required under this section must [ provide ]:

(1) reference this chapter [ a statement of the acts or

omissions giving rise to the claim ];

(2) describe the damage to or loss of covered property

for which payment is owed under the insurance policy in sufficient

detail to give the insurer a fair opportunity to adjust the claim;

(3) state the claimant's legal and factual basis for

believing the claim is covered by the insurance policy;

(4) provide a detailed, claimant- and claim-specific

description of the acts or omissions by each insurer or agent that

constitute a violation of a provision of the insurance policy, a

statute, a provision of the Texas Administrative Code, or a common

law standard of conduct;

(5) except as provided by Subsection (b-1), state the

specific amount of money alleged to be owed by the insurer on the

claim for the damage to or loss of covered property described by

Subdivision (2) ;

(6) state [ and

[ (3) ] the amount of reasonable and necessary

attorney's fees incurred by the claimant to investigate the claim

and prepare the notice required by this section , calculated by

multiplying the number of hours actually worked by the claimant's

attorney, as of the date the notice is given and as reflected in

contemporaneously kept time records, by an hourly rate that is

customary for similar legal services ; and

(7) include the attorney's contemporaneously kept time

records and all existing estimates, invoices, statements,

receipts, engineer's or inspector's reports, or other items

constituting proof of the alleged loss that are possessed by the

claimant or subject to the claimant's control .

(b-1) Instead of stating the specific amount of money

alleged to be owed as required by Subsection (b)(5), a claimant may

state that the claimant needs additional time to evaluate and

quantify the claim before the claimant states an amount the

claimant will accept in full payment of the claim. By making this

statement, the claimant temporarily postpones the claimant's

obligation to comply with that subsection as provided by Section

542A.005.

(b-2) The purpose of the notice required by this section is

to enable an insurer to adjust and, if the insurer chooses, satisfy

a claimant's claim by paying the amount the claimant has alleged is

owed on the claim. The amount alleged by the claimant to be owed on

the claim must be an amount the claimant will accept in full payment

of the claim.

(b-3) Notwithstanding Subsection (e), an insurer may pay

the amount the claimant alleges is owed on the claim and pursue an

action under Chapter 37, Civil Practice and Remedies Code, to

determine the reasonableness or necessity of attorney's fees

allegedly incurred by the claimant as stated in the claimant's

notice.

(g) At the option of a person to whom notice was given,

notice [ Notice ] given under this chapter is admissible in evidence

in a civil action or alternative dispute resolution proceeding

relating to the claim for which the notice is given.

SECTION 3. Section 542A.004, Insurance Code, is amended to

read as follows:

Sec. 542A.004. INSPECTION. Not later than the 15th [ 30th ]

day after receiving a presuit notice given under Section

542A.003(a), a person to whom notice is given may send a written

request to the claimant to inspect, photograph, or evaluate, in a

reasonable manner and at a reasonable time, the property that is the

subject of the claim. If reasonably possible, the inspection,

photography, and evaluation must be completed not later than the

30th [ 60th ] day after the date the person receives the presuit

notice.

SECTION 4. Section 542A.005, Insurance Code, is amended by

amending Subsections (a), (b), (c), (d), and (e) and adding

Subsections (d-1), (g), and (h) to read as follows:

(a) In addition to taking any other act allowed by contract

or by any other law, a person against whom an action to which this

chapter applies is pending may file a plea in abatement not later

than the 30th day after the date the person files an original answer

in the court in which the action is pending if the person:

(1) did not receive a presuit notice fully complying

with Section 542A.003; [ or ]

(2) received a presuit notice under Section 542A.003

stating that more time is needed for the claimant to state an amount

the claimant will accept in full payment of the claim; or

(3) requested under Section 542A.004 but was not

provided a reasonable opportunity to inspect, photograph, or

evaluate the property that is the subject of the claim.

(b) The court shall abate the action if the court finds that

the person filing the plea in abatement:

(1) did not, for any reason, receive a presuit notice

fully complying with Section 542A.003; [ or ]

(2) received a presuit notice under Section 542A.003

stating that more time is needed for the claimant to state an amount

the claimant will accept in full payment of the claim; or

(3) requested under Section 542A.004 but was not

provided a reasonable opportunity to inspect, photograph, or

evaluate the property that is the subject of the claim.

(c) An action is automatically abated without a court order

beginning on the 11th day after the date a plea in abatement is

filed if the plea:

(1) is verified and alleges that the person against

whom the action is pending:

(A) did not receive a presuit notice fully

complying with Section 542A.003; [ or ]

(B) received a presuit notice under Section

542A.003 stating that more time is needed for the claimant to state

an amount the claimant will accept in full payment of the claim; or

(C) requested under Section 542A.004 but was not

provided a reasonable opportunity to inspect, photograph, or

evaluate the property that is the subject of the claim; and

(2) is not controverted by an affidavit filed by the

claimant before the 11th day after the date the plea in abatement is

filed.

(d) An affidavit described by Subsection (c)(2)

controverting whether the person against whom the action is pending

received a presuit notice fully complying with Section 542A.003 or

stating that more time is needed for the claimant to state an amount

the claimant will accept in full payment of the claim under Section

542A.003 must:

(1) include as an attachment a copy of the document the

claimant sent to give notice of the claimant's action; and

(2) state the date on which the notice was given.

(d-1) If an affidavit described by Subsection (c)(2) is

timely filed by a claimant, the court must enter an order abating

the action unless the court finds that the claimant's controverting

affidavit establishes that the claimant timely provided a presuit

notice to the movant that fully complied with Section 542A.003,

including the requirement that the notice state an amount the

claimant will accept in full payment of the claim.

(e) An abatement under this section continues until the

later of:

(1) the 60th day after the date a notice fully

complying with Section 542A.003 , including the requirement that the

notice state an amount the claimant will accept in full payment of

the claim, is given; or

(2) the 15th day after the date of the requested

inspection, photographing, or evaluating of the property is

completed.

(g) The filing of a plea in abatement stays all discovery in

the action until an order overruling the plea is signed by the trial

court or the abatement period provided by Subsection (e) has

expired.

(h) Prejudgment interest, interest under Section 542.060,

or interest that might be awarded under any other law does not

accrue while an action is abated under this section.

SECTION 5. Section 542A.007(d), Insurance Code, is amended

to read as follows:

(d) If a defendant in an action to which this chapter

applies pleads and proves that the defendant was entitled to but was

not given a presuit notice stating the specific amount alleged to be

owed by the insurer under Section 542A.003(b)(2) at least 61 days

before the date the action was filed by the claimant, the court may

not award [ to the claimant ] any attorney's fees to the claimant

under any law [ incurred after the date the defendant files the

pleading with the court ]. A pleading under this subsection must be

filed not later than the 30th day after the date the defendant files

an original answer in the court in which the action is pending.

SECTION 6. (a) Section 542.060(c), Insurance Code, as

amended by this Act, applies only to a claim, as defined by Section

542A.001, Insurance Code, made on or after the effective date of

this Act. A claim made before the effective date of this Act is

governed by the law as it existed immediately before the effective

date of this Act, and that law is continued in effect for that

purpose.

(b) Chapter 542A, Insurance Code, as amended by this Act,

applies only to an action that is filed on or after the effective

date of this Act. An action filed before the effective date of this

Act is governed by the law as it existed immediately before the

effective date of this Act, and that law is continued in effect for

that purpose.

SECTION 7. This Act takes effect immediately if it receives

a vote of two-thirds of all the members elected to each house, as

provided by Section 39, Article III, Texas Constitution. If this

Act does not receive the vote necessary for immediate effect, this

Act takes effect September 1, 2025.