- As part of his larger efforts to address affordability, Governor Greg Abbott has asked the Texas Department of Insurance to crack down on insurance fraud and take other steps to make insurance more affordable
- Reforms passed by lawmakers in other states in recent years have resulted in significant cost savings to consumers, with USAA recently announcing that it will pass along nearly $1 billion in savings to its customers in Florida
- Arnold & Itkin, a politically active liberal personal injury law firm based in Houston, has been accused of engaging in abusive litigation practices to inflate damages, and trial lawyers are likely to oppose once again efforts to pass reforms in Texas
Affordability has been a major focus for Texas Governor Greg Abbott in recent months, with his “Keep Texas Affordable” agenda as a centerpiece of his re-election campaign.
As part of his affordability efforts, Abbott has directed the Texas Department of Insurance to take steps that will make insurance more affordable. In a statement last month, Abbott said, “The average annual homeowners’ insurance premium in Texas has risen 79 percent in six years. High insurance costs hit Texas families hard. Today I direct the Texas Department of Insurance to put consumers first and take action that makes property and casualty insurance more affordable.”
Among Abbott’s directives to the Texas Department of Insurance were the creation of an Insurance Fraud Task Force to “clamp down on insurance fraud, which harms all consumers by making insurance more expensive” and directing the Department to “conduct a study on the impact of excessive, unnecessary, and inflated claims costs on the Texas commercial auto, personal auto, and homeowner insurance markets.”
Consumer advocates applauded Abbott’s crackdown on insurance fraud.
“Fraud is not a victimless crime, and Governor Abbott is right to make cracking down on it a priority,” said Lauren Zelt, Executive Director of Protecting American Consumers Together. “When bad actors manipulate claims, manufacture damages, or otherwise exploit systems designed to compensate legitimate victims, honest Texans ultimately pay the price.”
Other states have recently taken steps to combat insurance fraud and inflated insurance claims.
In New York, Governor Kathy Hochul signed a series of reforms into law in May, including a measure to crack down on staged car accidents. According to Hochul’s office, staged accidents inflate auto insurance premiums in New York by as much as $300 per year.
Florida Governor Ron DeSantis has touted significant insurance rate reductions enjoyed by policyholders in the state as a result of reforms recently passed there.
“Premiums are lowering because we’ve enacted real reforms and withstood the pressure to reverse course. We will hold firm in our commitment not to go back to the broken insurance market of the past,” said DeSantis in January.
In June, Texas-based USAA said it would return nearly $1 billion to its policyholders in Florida through rate reductions and a $500 million dividend. The company attributed its ability to pass along cost savings to reforms passed by Florida lawmakers.
An article published by the Georgia Public Policy Foundation in July also showed that consumers were benefiting from a package of reforms passed in Georgia last year. The article cited auto insurance rate reductions reported by major carriers such as State Farm, Allstate, and Travelers in the wake of the new laws to rein in lawsuit abuse.
However, politically active liberal personal injury lawyers could obstruct reforms to reduce insurance rates in Texas.
In a 2024 court filing, Transocean accused the Houston-based law firm of Arnold & Itkin of engaging in alleged “cleverly designed-for-litigation billing schemes with alleged medical providers” in which the firm is accused of steering its clients in personal injury lawsuits to handpicked medical providers that would in turn produce inflated medical bills to boost damages.
“These schemes are fundamentally designed to achieve two things: (1) artificially inflate Plaintiffs’ alleged medical costs (while Plaintiffs themselves pay nothing); and (2) obscure the providers’ interests and incentives by routing payments and stakes in the outcome of this litigation through middleman entities,” the brief states.
It continues, “In short, it is no coincidence that the 20+ Plaintiffs who live across the country have seen the same sets of medical providers for their allegedly unique ailments. None see their own providers. None use their own insurance. Instead, they see providers who are part of an opaque scheme created to inflate medical bills, increase the Plaintiffs’ alleged damages, and increase the incentive that the providers provide favorable testimony for Plaintiffs at trial.”
Arnold & Itkin has denied the allegations.
During the 2024 election cycle, the Arnold & Itkin law firm donated $300,000 to the left-wing First Tuesday PAC, which ran ad campaigns urging voters to “Stop MAGA Republicans. Do Something Good. Vote For Every Democrat.” Also in 2024, the owners of the Arnold & Itkin firm formed an organization called “Texas Democratic Voices.”
Despite strong Democratic bona fides, Arnold & Itkin engaged in aggressive efforts to infiltrate the 2026 Republican Primary. The firm created a new political action committee – Texans for Truth and Liberty – which it funded with an initial donation of $10 million. Much of that funding was used to influence various Republican Primary contests.
During the 2025 legislative session, lawmakers considered legislation – Senate Bill 30 – that sought to curtail the types of abusive litigation practices that Arnold & Itkin and other prominent personal injury trial lawyers have been accused of engaging in. The legislation failed to become law.
