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Big Freeze - TX'21 Blog Post

In our first webinar, we had a lively discussion on the impact of the Big Freeze on claims, coverage, and bad faith litigation.

For context, the three costliest storms from 2008-2017 totaled insured losses of just over $32B. The Big Freeze is on the way to surpass these totals. Why?

What sets the Big Freeze apart is that it was statewide. Hurricanes Harvey and Ike were devastating notably to Houston, Rockport, and Galveston. However, the Big Freeze affected the entire state with the same weather pattern. That is so rare as to be almost unprecedented.

In other ways, the Big Freeze could be the “perfect storm” for insurance litigation in the wake of recent changes in the law. For example, we discussed the new decision in Kenyon v. Elephant Ins. Co., 2020 Tex. App. LEXIS 2686 (Tex. App.—San Antonio April 1, 2020, pet filed). The decision, currently on appeal before the Texas Supreme Court, held that Texas should recognize for the first time a duty of care on the part of an insurer when it provides claims reporting assistance, e.g., requesting the insured to photograph the scene of an auto accident. The Kenyon decision has implications for all types of first party claims where documentation of damage is obviously an important step in claims processing.

We also walked through major developments in appraisal law concerning liability for penalty interest and the fate of the “reasonable payment” defense. In sum, our approach for the Big Freeze mirrors that of our clients: be proactive and prepared.