Category: Texas Department of Insurance

And the beat does go on, as in the beat down of the taxpayers and the NFIP by shady insurers

As the Houston Chronicle illustrated in their 1st anniversary of Ike coverage, not only do the taxpayers get stuck with the wind claims insurers dump on the NFIP they also get stuck for the bill for the living expenses these all perils contracts should cover but never do. As a between the lines reader stated in an email:

What this article leaves unstated is that these lengthy disputes over causation ultimately cost federal taxpayers billions of dollars unnecessarily. The federal government pays for trailers, housing vouchers, subsidized loans, tax deductions, grants, and other benefits to assist displaced residents who are engaged in legal disputes with their insurers or who have unintentional gaps in their coverage despite buying all that was recommended by their insurance agents. Meanwhile, because of the delay in the housing recovery, the federal government subsidizes local governments, schools, hospitals, and businesses for extended periods of time until the local tax and consumer base can be restored.

Gang does any of this sound familiar? One key difference is without expedited claims Texas homeowners are having to go after both the NFIP and their wind insurer to be made whole on the coverage they were sold that in theory should fully cover their losses but rarely does without having to sue.

Life in a trailer in his driveway is a daily reminder of Hurricane Ike for Michael Amoroso.

After waiting months for a response from the National Flood Insurance Program, he was declined a bigger payment that he had hoped to use to rebuild.

For Amoroso and other homeowners like him, the storm did more than damage their property. The unrepaired houses and pending insurance claims are a daily test of their will.

“For months they didn’t even return my phone calls or e-mails,” said Amoroso, who plans to sue for more funds. “I am so fed up.” Continue reading “And the beat does go on, as in the beat down of the taxpayers and the NFIP by shady insurers”

…and a dim bulb flickered in Texas over at TWIA

While Commission Chaney had all the bright lights of insurance and finance shinning in Mississippi, a dim bulb flickered in the Texas Windstorm Insurance Association (TWIA), according to Texas’ oldest newspaper, the Galveston County Daily News:  h/t  always thoughtful reader

The Texas Windstorm Insurance Association wants a judge to give it immunity against paying attorneys’ fees, penalties, interests and other expenses beyond actual damages in litigation claiming it acted in bad faith or maliciously in dealings with policyholders.

In Bakht Khattak vs. Texas Windstorm Insurance Association, the insurer is seeking sovereign immunity, which means it can’t be sued without its consent.

If Judge Susan Criss of the 212th District Court in Galveston grants sovereign immunity in that case, her decision could apply to any lawsuit filed against the insurer since Hurricane Ike, which struck in September with 110 mph winds and devastating storm surge.

About all that can be said for this TWIA flicker is that it would require a lot less time and money than hiring lawyers to sneak around and get all the evidence against you classified a “trade secret”.

The windstorm association isn’t seeking dismissal of the lawsuit or others like it, officials said….

What the association’s attorneys at a Monday hearing asked Continue reading “…and a dim bulb flickered in Texas over at TWIA”

Treading Water – claims handling in Texas following Hurricane Ike

While the National Insurance Law Forum waited a bit longer than most to ask Hurricane Ike Insurance Litigation: Will it be as bad as Katrina?,  the November 17, 2007 post also suggested the answer.

It didn’t take long for the first bad faith suits arising from Hurricane Ike to be filed in Texas. Last week, the first two Ike bad faith lawsuits that I am aware of were filed in Galveston and Ft. Bend Counties…These are first of several thousand Ike lawsuits expected to be filed across Southeast Texas over the next several years…

The big question being asked by carriers across the country is whether Hurricane Ike will generate the type and volume of litigation generated by Hurricane Katrina. In the three years since Hurricane Katrina, it has been estimated that between 27,000 and 30,000 hurricane insurance suits were filed in southern Louisiana alone. Of the 12,565 suits filed in federal court, only slightly more than half — 7,837 — cases, have gone to judgment or settled.

The seventh edition of the Hurricane Ike Insurance Newsbrief (January 26, 2009) quotes the Texas Department of Insurance reporting that in the three months after Hurricane Ike… over 730,000 insurance claims have been filed and the number continues to rise.

From the policyholder’s perspective, the numbers indicate a mixed blessing.  The longer it takes for a case to get to court the more likely it is that new case law will replace Leonard and other of the 5th Circuit’s poorly reasoned opinions on Katrina litigation.  Chip Merlin’s post on the 5th’s decision in Leonard, Fifth Circuit got it wrong,  points out where the Court’s reasoning failed.

In their rationale…the 5th Circuit provides a less than stellar (okay really absurd) example of non-coverage that virtually all insurance companies issuing an all-risk policy would heretofore pay. After finding that the anti-concurrent causation language was not ambiguous, Judge Edith Jones went too far and provided the following:

“If, for example, a policyholder’s roof is blown off in a storm, and rain enters through the opening, the damage is covered. Only if storm-surge flooding – an excluded peril – then inundates the same area that the rain damaged is the ensuing loss excluded because the loss was caused concurrently or in sequence by the action of a covered and an excluded peril…

Where did that come from? Virtually every adjuster and claims manager I have ever deposed with that similar hypothetical situation in a Katrina loss has said coverage would be granted under the all-risk policy for the full amount of the loss…From a practical standpoint, where is there going to be any coverage if the flood policy has the typical exclusions regarding pre-existing loss or “roof leaks or wind-driven rain” as found in the National Flood Policy?

That seems to be one of the big questions in Texas following Ike, according to Thousands waiting for windstorm payments, the article from the Galveston County Daily. h/t Dimechimes. Continue reading “Treading Water – claims handling in Texas following Hurricane Ike”

Texas talking – the latest from both sides of its mouth

Given the talk from Texas, I’m wondering when the Texas Insurance Department will issue one of its consumer protection policy bulletins on the Texas Windstorm Insurance Association – but, before I go there, let’s start with this incredible post-Ike insurance story from Chip Merlin.

My new client was born and raised in Houston. He started his own company ten years ago after working in construction for 25 years.  His roof was damaged and water entered the attic causing damage to the insulation and then more damage as the water dripped down into the rest of the structure.

However, the insurance adjuster found that the windows leaked and allowed for the water damage.  That cause of loss would be excluded under my clients commercial policy.  After a fist fight almost ensued between my client and the adjuster, the adjuster agreed to hire an engineering firm.  Texas Wind hired a well known insurance engineering vendor and sure enough, that engineer somehow opined that lower floor windows had water leaked and water defied gravity, finding its way into the attic. Is such a finding a “reasonable” basis?  Doubtful. (emphasis mine)

Situations such as that are so insulting as anyone with modest intelligence can tell it’s a total crock of you-know-what – and a Texas-sized one at that.  What I want to know is how  engineers that put out the crap can hold a license and the same goes for the insurers that accept their reports.  It’s way past time for the licensing issue to be addressed IMO.

Merlin doesn’t raise the licensing issue per se; but, I imagine he’s given it some thought as he’s got ample cause; and, no doubt, knows a lot more stories that, thus far, he’s not telling. Continue reading “Texas talking – the latest from both sides of its mouth”