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Navigating Insurance Policies, Payouts Post-Harvey

The scene in a Houston area neighborhood located between two reservoirs. The dams have been spilling into sections of the city's energy corridor.

As Harvey recedes in parts of Texas, affected homeowners are grappling with how to recover from the damages. 

In the eight counties most directly affected by the storm, only 17 percent have flood insurance policies, the Washington Post finds. 

Estimated losses from the storm are already in the billions and many are wondering what they can expect from their current insurance policies. 

A new state law passed as Texas House Bill 1774is set to take effect Friday. The Blue Tarp Law, as it is called, provides insurance companies with some relief regarding penalties and lawsuits from insurance claims that have not been settled to the satisfaction of the homeowner or in a timely manner.

The law applies to commercial and residential policies – which do not typically include flood insurance – but exempts National Flood Insurance claims and the Texas Windstorm Insurance Association. 

TWIA, a state agency, has a rocky history with accountability around their claims. Did reforms work and is the agency sufficiently capitalized? 

The National Flood Insurance program may soon beunderwater as well, with $24 million in debt after Hurricanes Sandy and Katrina, as well as annual losses of more than $1 billion. The program, set to expire on Sept. 30, requires a reauthorization by Congress to continue. 

Where do private insurers fit in the market? What happens to the Texas economy as residents and businesses along the coast recover? 

Guest: Seth Chandler, professor at the University of Houston Law Center

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David Martin Davies can be reached at dmdavies@tpr.org and on Twitter at @DavidMartinDavi
Jan Ross Piedad Sakian is TPR’s News Operations Producer. In this role, she develops strategy on collaborative and digital initiatives for the station. Since 2016, Jan Ross has served in a coordinating capacity for TPR’s state and national partners, including The Texas Newsroom.