Severe weather is a fact of life for the residents of Texas. The arrival of spring brings some of the most damaging thunderstorms in the world, including torrential rain, hail, and tornadoes. Homeowners insurance is essential to protect the property owner in the event of damage from severe weather. Increased rates in homeowners insurance and an avalanche of lawsuits relating to property damage claims has created a situation where homeowners insurance is becoming too expensive, or not offered at all, for consumers in some areas.

An increase in the frequency and ferocity of storms in recent years has cost insurance companies and homeowners insurance policyholders in Texas billions of dollars. A June 2012 hailstorm caused $900 million in damage in the Dallas/Fort Worth area. In 2014 three towns in Texas reported storms that produced hail the size of baseballs, resulting in millions of dollars in damage to residential and commercial properties. There were also four hurricanes to make landfall in the state between 2005 and 2009. As a result, companies offering homeowners insurance policies in Texas began increasing rates. According to a September 2014 report in the Dallas Morning News, the three largest insurance companies in Texas increased rates on homeowners insurance by as much as 20.9% since the beginning of 2013. Insurers that write homeowners insurance policies claim that rates normally go up in areas that are affected by severe weather. However, some members of the insurance industry, along with some politicians in Texas attribute some of the rise in rates to an explosion in hail damage claims in the state since 2010.

A proposal to change the process of litigation involving hail damage claims is currently moving through the Texas Legislature. Texas Senate Bill 1628 is an attempt to address the significant increase in property damage claims resulting in litigation against insurance companies. The bill passed the Texas Senate on April 30 and is intended to help homeowners insurance consumers by reducing the ability of attorneys to solicit and file frivolous lawsuits involving property damage, with the main target being hail damage claims. According to the National Insurance Crime Bureau, insurance companies nationwide saw an 84% increase in homeowners insurance claims related to hail damage between 2010 and 2012. The cause of the largest percentage of homeowners insurance claims in Texas is hail, producing approximately $10.3 billion dollars in claims from 2004-13.

Advocates of Texas Senate Bill 1628 claim that the increase in hail damage cases in Texas are primarily driven by aggressive solicitation practices by law firms and contractors, and that by reducing the number of lawsuits insurance companies will be able to avoid future rate increases and provide better service for their policyholders. Senator Larry Taylor, a co-sponsor of the bill, claims that the changes are also intended to help homeowners insurance consumers in parts of the state where insurance companies have stopped writing policies because of frequent storms. The bill proposes to further assist consumers in the homeowners insurance market in Texas by reducing the amount of fraud associated with storm damage claims and diminishing the motivation for contractors and law firms to proceed with fraudulent claims.

As of today, more than 30,000 lawsuits have been filed in Hidalgo County related to two storms that occurred there in 2012. Over 9,000 of those lawsuits are still pending. Some independent agents claim that they have seen an increase in the number of insurance companies that have ceased writing homeowners insurance policies in parts of Hidalgo County, which the proponents of Senate Bill 1628 claim will increase rates for homeowners insurance policyholders. The bill is designed to target these cases specifically by introducing time limits on plaintiffs seeking to resolve their claims with insurance companies in court. The bill also requires plaintiffs to be fully aware of the details of their case and the amount in damages they are seeking before the case is allowed to proceed, which is designed to slow the amount of lawsuits that firms are able to file.

Critics of Senate Bill 1628 claim that insurance companies, on the heels of record profits in the state in the last several years, are also responsible for the number of lawsuits homeowners insurance policyholders are taking to court. Texas Watch, a consumer advocacy group, claims that while insurance premiums have gone up in the state, the companies have been unfairly decreasing damage settlements in homeowners insurance claims, leaving homeowners insurance policyholders with no alternative but litigation.

Regardless of the outcome of Senate Bill 1628, the homeowners insurance market is rapidly changing in Texas. As the mercury rises, storms and hurricanes will threaten areas of the state, exemplifying the need for policyholders to stay updated and know what is in their current policy.