The way you handle insurance claims could change when a law that goes effect Sept. 1.

House Bill 1774 was passed by the Texas Legislature during the regular session and signed by Gov. Greg Abbott in May. The law changes how lawsuits are brought against insurance companies as well as late payment penalties for claims that take too long to pay policyholders.

If a person files an insurance claim before the law goes into effect and the insurance company does not pay in a legal timely manner, the company's late payment penalty to the person making the claim is 18 percent in addition to the claim amount.

Under HB 1774, the penalty becomes an adjustable rate. Paul Martin, Director-State Affairs for National Association of Mutual Insurance Companies for the Southwestern Region, says the rate on Sept. 1 will be at 10 percent.

“This bill does not take away consumer's rights to sue their insurance company. It doesn't take away any of the remedies,” said Martin.

The new law made changes to how attorneys can recoup fees associated with the case.

“It will reduce the amount of attorney's fees available to certain attorneys in certain situations. It will also require policyholders to provide written notice prior to filing a lawsuit,” said Martin.

Here’s what you need to do if you have damage:
- Turn in your claim as soon as possible.
- Keep copies of receipts you submit to your insurance company
- Watch out for contractors and other people asking to do repairs. Storms bring out unscrupulous vendors. Keep a claims notebook – that’s names of phone numbers, adjusters, contractors, future damages, everything associated with the damage and repairs.

Our sister station, KBMT, verified several claims surrounding this new law. Tap here for more.