Tag: Texas Department of Insurance

State Farm decides to “mess with Texas” – sues insurance department!

My computer “ate my homework”! Actually, it garbled the post I had for this morning; but, here’s a news flash to give you something to think about while I finish rewriting:

State Farm Insurance has filed a lawsuit against the Texas Department of Insurance after the state agency took the unprecedented move of publicizing on its Web site recent rate hikes by the company.

Texas’ largest insurer filed suit Tuesday, seeking to protect from disclosure certain information that State Farm said could benefit its rivals in the insurance industry.

Department spokesman Jerry Hagins says the agency’s position is that all documents associated with a rate filing are public information. Posted were two State Farm rate proposals filed over the last eight months that increase homeowner premiums an average of 13 percent.

Hagins tells The Dallas Morning News that the decision to post was partly the result of increases filed so close together.

Another news brief on the suit reported, “State Farm spokesman Kevin Davis said information posted online by the Texas State Department of Insurance ‘contains information about reinsurance’ that would benefit rival companies…”

SLABBED readers will recall that State Farm is self-reinsured and Texas is not the first State to question those costs.  In fact, the Company’s assessment of reinsurance was the chief cause of the controversial rate increase in Florida and a concern expressed when State Farm more recently filed for rate increases in Mississippi and Louisiana. However the Company is no stranger in Texas courts.  Here’s a bit of  background on the story behind the story published after the first of the two rate increases at issue: Continue reading “State Farm decides to “mess with Texas” – sues insurance department!”

Another mess in Texas – lawsuit claims TWIA rigged process

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.”

Rigged from the beginning – surely not!  ( h/t observant reader and the Houston Chronicle Lawsuit says windstorm insurer rigged process)

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 game, as Mostyn called it,  sounds familiar, does it not?  There’s more: Continue reading “Another mess in Texas – lawsuit claims TWIA rigged process”

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”