Republican Sen. Larry Taylor's proposal establishes deadlines for filing claims and strengthens penalties for inflating claims adjustments.
It passed 21-10 on Thursday, a day after hours of debate and a preliminary vote.
Taylor said it will stop groups trolling neighborhoods after large storms, signing up people with only minimal damage in hopes of building large and unnecessary lawsuits against insurers.
He argued that enriches attorneys and appraisers rather than homeowners, and can spark unnecessary suits settled out-of-court. Taylor also said other Texans see insurance premiums rise as a result.
Democrats counter that the limits could keep homeowners with legitimate insurance claims from suing.
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