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Amid Harvey flooding, Texas gov. calls insurance concerns "bogus"

Harvey insurance fears "bogus"
Harvey insurance fears "bogus" 01:07

NEW YORK -- Texas Gov. Greg Abbott downplayed the effects of a bill that goes into effect Friday that will make it more complicated for people to sue their property insurance companies in a dispute.

The law limits how much insurers must pay when they are sued, and adds another step necessary for a lawsuit to take place. Some consumer advocates and even a Democratic congressman have urged Texans to file their claims before Friday, when the law goes into effect. Rep. Joaquin Castro, who represents San Antonio, has said the state legislature should reconvene to delay the law.

In an interview with CBSN's Elaine Quijano, Abbott sidestepped the question of whether the law should be delayed to allow concerned homeowners more time to file.

Gov. Greg Abbott CBS News

"You signed a bill this year that reduces the penalties insurance companies face for delayed payments," Quijano asked. "Now the law affects claims made after Friday and some homeowners are concerned that it's going to be harder for them to get insurance payments after this storm. Should the implementation be delayed?"

"That law has no effect whatsoever of these types of claims," Abbott answered. "Every valid claim is going to be paid regardless of when it will be filed. So no one should have any concern whatsoever about that."

Asked if people should be urged to file before Friday to avoid delays, Abbott answered with a firm no.

"No one should be concerned about that," he said. "All the concerns raised about that are bogus and no one needs to be concerned about that. All valid claims whenever they're filed will be paid."

However, the law in question, House Bill 1774, does add a hurdle for policyholders who believe their insurance companies are being slow to settle a claim, or whose claims are denied altogether.

The law requires an insurance company to receive written notice before a policyholder files a lawsuit, and for the company to have a chance to inspect the property in question. It also sharply reduces the compensation plaintiffs' lawyers can get in cases where their clients are awarded less money than they were seeking.

Supporters of the law claim that it weeds out frivolous lawsuits, but consumer advocates are concerned it will make it harder for homeowners to get legal representation when they argue with their insurer.

Texas has faced unprecedented amounts of flooding due to the storm. Hundreds of thousands of homes have been destroyed, Abbott said, and the sheer magnitude of the disaster is not yet known. Harvey is already expected to be one of the costliest storms in U.S. history.

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