HB4020 - Relating to presuit notice and inspection requirements associated with, and certain liability in connection with, certain insurance claims for property damage.

  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 [Text truncated for display. 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