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A BILL TO BE ENTITLED
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AN ACT
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relating to recovery of damages for delay of payment of certain |
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insurance claims. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 542.058(b), Insurance Code, is amended |
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to read as follows: |
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(b) Subsection (a) does not apply in a case in which: |
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(1) it is found as a result of arbitration or |
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litigation that a claim received by an insurer is invalid and should |
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not be paid by the insurer; |
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(2) the amount of damages awarded as a result of |
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arbitration or litigation is less than 80 percent of a settlement |
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offer, as defined by Section 42.001, Civil Practice and Remedies |
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Code, made by an insurer and rejected by the claimant; |
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(3) the claimant fails to provide an affidavit of |
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damages under Section 542.0595(a); or |
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(4) the insurer pays to the claimant the amount of |
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damages awarded as a result of an appraisal not later than the 15th |
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business day after the date the damages are awarded in the |
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appraisal. |
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SECTION 2. Subchapter B, Chapter 542, Insurance Code, is |
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amended by adding Sections 542.0595 and 542.0596 to read as |
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follows: |
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Sec. 542.0595. AFFIDAVIT OF DAMAGES. (a) A claimant shall |
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provide to an insurer an affidavit with the dollar amount of all |
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damages the claimant will seek in a suit seeking damages under this |
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subchapter not later than the 30th day before the date the claimant |
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commences the suit against the insurer. |
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(b) If a claimant seeks an amount in excess of the amount in |
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the claimant's affidavit under Subsection (a), the claimant shall |
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provide the insurer written notice of the excess amount by |
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affidavit not later than the 15th day before the date the claimant |
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files a petition or motion seeking the excess amount with a court. |
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Sec. 542.0596. SMALL CLAIMS CASES. (a) Notwithstanding |
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any other law, a claimant may file an action seeking damages under |
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this subchapter as a small claims case as provided by Section |
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27.060, Government Code, if the disputed amount of the insurance |
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claim does not exceed the maximum amount allowed for a small claims |
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case as determined by rules of civil procedure promulgated by the |
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supreme court. The total amount awarded in an action filed as a |
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small claims case under this subsection may not exceed two times the |
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disputed amount of the insurance claim. |
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(b) If a suit seeking damages under this subchapter is filed |
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as a small claims case as provided by Subsection (a) and Section |
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27.060, Government Code, an insurer may make an election to waive |
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the insurer's right to appeal not later than the 15th day after the |
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date the suit is filed against the insurer. |
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SECTION 3. The heading to Section 542.060, Insurance Code, |
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is amended to read as follows: |
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Sec. 542.060. LIABILITY FOR VIOLATION OF SUBCHAPTER; |
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APPEAL. |
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SECTION 4. Section 542.060, Insurance Code, is amended by |
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amending Subsection (a) and adding Subsections (c), (d), and (e) to |
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read as follows: |
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(a) If an insurer that is liable for a claim under an |
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insurance policy is not in compliance with this subchapter, the |
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insurer is liable to pay the holder of the policy or the beneficiary |
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making the claim under the policy, in addition to the amount of the |
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claim: |
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(1) [,] interest on the disputed amount of the claim at |
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the rate of 18 percent a year as damages; |
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(2) [, together with] reasonable and necessary |
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attorney's fees; and |
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(3) if the suit is filed as a small claims case and the |
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insurer did not make an election under Section 542.0596, court |
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costs. |
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(c) A court shall determine the amount of attorney's fees |
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awarded under Subsection (a). The amount of attorney's fees must |
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bear a reasonable relationship to the damages awarded by the trier |
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of fact based on the disputed amount of the claim. |
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(d) Interest awarded under Subsection (a)(1) begins to |
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accrue on the date the claimant provided the affidavit of damages |
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under Section 542.0595(a) or (b), as applicable. |
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(e) An attorney may not share attorney's fees awarded under |
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Subsection (a) with the claimant. |
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SECTION 5. The changes in law made by this Act apply only to |
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an insurance policy that is delivered, issued for delivery, or |
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renewed on or after January 1, 2016. A policy delivered, issued for |
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delivery, or renewed before January 1, 2016, is governed by the law |
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as it existed immediately before the effective date of this Act, and |
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that law is continued in effect for that purpose. |
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SECTION 6. This Act takes effect September 1, 2015. |