MALVERN, Pa.— The use of attorneys in settling Texas homeowners insurance claims is spreading, according to a recent study of homeowners insurance claims conducted by the Insurance Research Council (IRC). While the increased rate of attorney involvement first arose among wind and hail claims in a particular area of Texas, the phenomenon appeared to be spreading to other areas and to additional types of damage claims.
In 2008, the percentage of wind and hail damage claims with an attorney involved exceeded 5 percent in just one of the 254 counties in Texas. By 2013, attorney involvement rates in wind and hail claims were above 5 percent in twelve counties and above 10 percent in eight counties. In addition, several South Texas counties, where the rates of attorney involvement in wind and hail claims were the highest, experienced increases in the use of attorneys in other types of claims, such water damage losses.
This new report echoes findings from a Texas Department of Insurance study of homeowners insurance claims from hail and wind damage, The Cost of Weather-Related Property Claims and Related Litigation, released earlier in 2017.
“Texas is already one of the most expensive states for homeowners insurance,” said David Corum, vice president of the IRC. “Increased litigation in these insurance claims may benefit attorneys but will push up the cost of insurance for all homeowners.”
The report, Attorney Involvement in Homeowners Insurance Claims in Texas, is based on a collection of aggregate data from homeowners property damage claims in Texas from 2008 to 2013. Participating insurers represented 52 percent of the Texas homeowners insurance market. For more detailed information on the study’s methodology and findings, contact: IRC@TheInstitutes.org. Visit IRC’s website, www.insurance-research.org, for information about purchasing a copy of the report.
The Insurance Research Council is a division of the American Institute For Chartered Property Casualty Underwriters (The Institutes). The Institutes are the leader in delivering proven knowledge solutions that drive powerful business results for the risk management and property-casualty insurance industry. Institute knowledge solutions include the CPCU designation program; associate designation programs in areas such as claims, risk management, underwriting, and reinsurance; introductory and foundation programs; online courses; research; custom solutions; assessment tools; and continuing education (CE) courses for licensed insurance professionals and adjusters through its CEU business unit. The IRC provides timely and reliable research to all parties involved in public policy issues affecting insurance companies and their customers. The IRC does not lobby or advocate legislative positions. It is supported by leading property-casualty insurance organizations.
TX Executive Summary.pdf (302.08 KB)