The Texas Windstorm Insurance Association used prices lower than market rates to estimate materials and repair costs, unfairly limited costs on roof repairs and discouraged reopening closed claims, a League City home-owner alleges in a lawsuit that includes internal TWIA e-mails and documents.
“The game is rigged from the beginning,” said Steve Mostyn, the homeowner’s attorney who obtained hundreds of documents through the discovery process. “All the parts are designed for one purpose, which was to save money and underpay these claims every way they can, not by accident nor incompetence but a systematic effort.”
The lawsuit alleges the insurer told adjusters to base claims estimates on an internally developed price guide — with prices lower than market — instead of pricing software commonly used by the industry.
One adjusting firm reported the market rate for roof repairs was $230 to $255 per 100 square feet, but TWIA’s price was $182, the lawsuit claims. In internal documents filed with the lawsuit, the association portrays its prices as just a guideline.
The Bolivar Peninsula TWIA policyholders have had the most frustrating insurance claim experience of any group in recent memory. While we have been having success with other Hurricane Ike claims, the Slabbers claims resolutions have proven difficult. They have not just back and taken this abuse either as I noted in Texas Windstorm “Slabbers” and Policyholders March on Austin.
I have been involved in a lot of disputed property insurance claims in many venues over the past twenty-five years where emotions run high, but the Texas Windstorm Insurance Association (TWIA) is the blue ribbon winner in Texas for policyholders that hate how they have been treated. And, it is not just limited to the customers of TWIA. A number of independent adjusters representing TWIA are ready and willing whistleblowers in lawsuits against TWIA regarding these practices. They are upset as well.
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.
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….
Hurricane Ike hit Galveston Island in the early morning hours of September 13th, 2008. The sheer size of the hurricane impacted a majority of the Texas Gulf Coast, in addition to the SW Gulf Coast of Louisiana.
At the East End of Galveston Island, the hurricane delivered its fiercest winds as well as a storm surge not experienced since the devastating hurricane of 1900. Beachtown found itself in the unenviable position of receiving the dirty side of the hurricane and Ike’s relentless punches delivered from the Northeast…
Galveston Island was inundated with hurricane debris, including boats lying in the streets and esplanades….a devastating blow to Galveston Island. There were clear signs of Ike’s presence at Beachtown, as many of the streets and lawns were covered by a layer of sand brought by the storm surge.
However,most compelling was the condition in which the residences and other structures lay… largely unscathed. Signs of hurricane Ike’s impact were limited to the breakaway sections of the structures. The buildings’ structures performed outstandingly. The habitable floors remained undamaged despite the horrific forces of Ike.
FEMA and the City of Galveston require the enclosed portion of structures located below Base Flood Elevation (as is the case for coastal communities and beachfront homes) be designed to break-away with the impact of a hurricane force, leaving the main structure intact. Ground Floor breakaway materials, such as louver panel assemblies and garage doors, separated as designed.
Unlike retiring Justice Stouter, who uses neither a typewritter or a computer, but otherwise copes with modernity; I use both but have spend most of the morning trying to figure out how to link music to the blog.
It is not that Souter can’t cope with modernity. When the Supreme Court considered a copyright case involving the latest file-sharing methods in 2005, Souter’s opinion for a unanimous court showed a deep understanding of peer-to-peer Internet applications. It has won praise from both the legal and the high-tech communities.
No one, however, will be praising my understanding of the directions for adding music to the blog, particularly Sop. Chalk up the addition of the “weekend edition” to the title, however, to CYA – a combination of not much in the way of news and the time I lost fooling around with the sound connection.
The 5th U.S. Circuit Court of Appeals refused to revive a lawsuit seeking $400 billion from contractors who built a 17th Street Canal floodwall that failed during Hurricane Katrina.
The court ruled Thursday that state law protects the six construction and engineering companies from suits because more than five years passed between the time that the Army Corps of Engineers accepted their work as complete and the wall’s failure during Katrina. The floodwall that failed was completed in 1992, 13 years before the storm.
All of the coastal states would be well served to look at state laws that leave consumers without the recourse they would have under federal law. Here’s the 5th Circuit’s ruling, compliments of the TP.
My wish is that somebody is going to read this Blog, call or write TWIA, and let them know that they need to write all their policyholders to alert them that the memo is wrong. However, my guess is that they will hire an attorney, and try to defend or explain the memo. (Chip Merlin)
I must admit to having similar thoughts about posts on SLABBED when I see a case lost for lack of information readily available to a non-lawyer researching the issue. Frankly, I hold out virtually no hope of any insurer ever admitting to and correcting an error. The field appears to be dominated by leaders who view themselves as Mr. Always Right. Eager to shake the label “bureaucrat”, leadership of publicly funded windpools and other “last resort” options quickly forget such programs exist because of a related failure in the insurance industry and eagerly become “one of the boys” – a lapse that IMO is resulting in an overpopulation of these Mr. Rights commiting every possible wrong.
Chip Merlin has been cooking on all burners and dishing out news of Ike claims handling faster than I could digest and link Dig into this big spread – we were all invited – and then I’ll put out a little desert.
My good buddy, Tom Grail, told me the parable of Hurricane Ike Insurance Claims. To appreciate this, one must first understand that the total loss structures in Galveston and Bolivar receive uniform estimates of wind damage from the Texas Windstorm Insurance Association (TWIA). The amount of damage caused by wind for nearly every structure is approximately 11%. The reports are virtually identical for every total loss structure, despite differences in the age of the structure and quality of construction.
The parable is a story of two men, Larry and Moe, who were on the peninsula when Ike hit. Larry was struck by a flying 2X4 launched by the wind, then, when the surge came, he grasped a floating timber and made it to safety. He was treated for his injuries, estimated at 11% of his being.
Moe was not so lucky. He was killed instantly by a flying TV set. The storm surge subsequently swept his body away.
The medical examiner compared Moe’s corpse to Larry. After taking several months to consider the situation, the examiner declared that Moe was only 11% killed by wind, because that’s what happened to Larry. He opined that 89% of Moe’s death must have been due to flooding.