Home Owners Policies

Texas Windstorm Insurance Association Crying “Help”

November 22, 2009 | Mark S. Humphreys

The Texas Windstorm Insurance Association, has found itself in an unfortunate position. The position is a creation of their own actions. Those actions were actions whereby they refused to pay proper claims to policyholders who suffered damages because of the hurricanes, Ike, Dolly, and Rita.

TWIA is crying “help” because they are afraid they are going to be punished for not properly paying claims to their policyholders. They are asking that they be immune from paying penalties, policyholder attorneys’ fees, and other expenses coming out of litigation that resulted from their conduct.

The windstorm association is a state-created insurer and is claiming that because they are an instrument of government that they should have immunity. Lawyers for the policyholders say that TWIA is effectively a private company, and that immunity would effect the over 900 lawsuits pending against TWIA.

Jury Says No To Punitive Damages

November 21, 2009 | Mark S. Humphreys

The previous post to this blog talked about penalties Texas insurance companies face when they do not properly handle a claim that is presented to them by one of their insureds. Recently an insurance case was tried in Federal Court in Mississippi. The case arose out of a lose suffered by Reginald Bossier for damages resulting from Hurricane Katrina. In the case, the jury declined to award any amount of monies for punitive damages.

The insurance company being sued was State Farm. Notice also, that this case was in Federal Court. Earlier posts on this blog have pointed out that the insurance company would always prefer to be in Federal Court, rather than State Court. In this case, the jury compensated Bossier $52,300 for damages to an outbuilding destroyed by Hurricane Katrina. However, the jury refused to punish State Farm for any amount of punitive damages. State Farm had paid for some home damage resulting from the high winds but was refusing to pay for damages caused by water.

The attorney for Bossier had asked the jury to award Bossier $2 million to punish State Farm. That anything less than $2 million would not get State Farm’s attention. The attorney also pointed out that “State Farm would rather pay its lawyers than its insureds.” She also told the jury that if State Farm were not punished then they would continue to deny claims.

Small $$$ Insurance Claims And Staying Out Of Federal Court

November 16, 2009 | Mark S. Humphreys

It is not unusual for an attorney to wish he could land a case worth millions of dollars. Every person who gets taken advantage of by an insurance company wishes they could sue the company and be compensated for millions of dollars. But the reality of everyday wrongs in the area of insurance law involve sums of money totaling much smaller amounts than millions of dollars.

What most people do not realize is the costs sometimes involved in fighting insurance claims. Most of the time an insurance company is not all that concerned about the cost. Their goal is to discourage people from challenging their decisions on claims. A lawsuit in State Court may cost an insurance company anywhere from $100 per hour to $300 per hour. That same case in Federal Court may cost $300 to $600 per hour with more hours being spent.

So why do insurance companies try to get lawsuits that are filed in State Court, removed to Federal Court? Because their chances of winning is usually better or if they lose, the dollar amount they lose is generally less when in Federal Court.

Under-Payment Of Texas Insurance Claims

November 14, 2009 | Mark S. Humphreys

Can it be a surprise? Insurance companies appear to be getting caught in under paying on claims. The Texas Windstorm Insurance Association (TWIA) seems to be caught in some controversy regarding its claims handling along the Texas Gulf Coast. Keep in mind the problems being experienced could just as easily be happening in Fort Worth, Dallas, Grand Prairie, Arlington, or even a small town like Weatherford out in Parker County.

This problem is written about in an article in the Houston Chronicle titled “Lawsuit Says Windstorm Insurer Rigged Process”. The article discusses TWIA using prices lower than market rates to estimate materials and repair costs. TWIA is said to also be unfairly limiting costs on roof repairs and discouraging the reopening of closed claims.

In a lawsuit resulting from some of the abuses by TWIA, documents and software is said to have been discovered that supports the claims that the abuses are being committed. One example of the abuse was discovered when one adjusting firm reported the market rate for roof repairs to be $230 to $255 per 100 square feet, but TWIA’s price was $182. In another situation it is said that they suggested using shingles off one house that were not in too bad shape, to put on another house. This does not sound right to most people but may actually be allowed depending on the language in the insurance policy.

Insurance Companies Dropping Policies

October 31, 2009 | Mark S. Humphreys

A recent article originating in Florida, highlights a problem that many homeowners face and none wished they faced. The article title “Insurers dropping Chinese drywall policies”, talks about some new homes being built with a Chinese drywall that emits sulfuric fumes and corrodes pipes. Sounds pretty bad, and it is, especially if it’s your house this drywall is in.

The problem could be very large considering there appears to have been 500 million pounds of this drywall imported into the United States between 2004 and 2008. The houses constructed with this drywall seem to be concentrated in the Southeast, especially Florida and coastal areas of Louisiana and Mississippi. Texas and the Dallas, Fort Worth, Arlington, Weatherford, and most of the areas of the State seem to have escaped this problem

Most the insurance companies are denying the claims submitted by homeowners. The basis for the denials will vary but most of the time the reasons have to do with the problem being a “pre-existing” condition, or some type of construction defect exclusion. Both of these are often times omitted coverages in the homeowners policies.

What Is “Bad Faith” Insurance In Texas?

October 10, 2009 | Mark S. Humphreys

Most people have heard the terms, “Good faith”, “Bad faith”, “The duty of good faith and fair dealing”, and “Statutory bad faith”. The question would be: What do these terms mean and why do we care? In Texas, as in many other states, the duty of an insurance company to its customer, at least in the automobile and homeowners’ policies, go beyond just what the policy says.

Statutory bad faith is violation of statutes found in the Texas Insurance Code. These statutory violations are primarily found in Section 541.060 and Section 541.061.

Common-law bad-faith and statutory bad faith standards are essentially the same according to the Texas Supreme Court in their deciding of Progressive County Mutual Insurance Co. v. Boyd.

How Do I Know What My Rights Are In Texas With My Insurance Policy?

August 31, 2009 | Mark S. Humphreys

For the most part insurance companies are regulated by State Law. Federal Laws in the insurance industry exist but I’m not going to talk about that here. You just need to know right now that if you are in Texas, that any insurance policy you have is probably controlled by Texas Insurance Laws. This is true most the time even if you actually purchased the insurance out of state or from an insurance company that is not based in Texas.

Whether you purchased an insurance policy in Dallas, Fort Worth, Arlington, Grand Prairie, Weatherford, or where ever in Texas the politicians in Austin and the Texas Insurance Commission regulate the policy. As long as you are now living in Texas, the laws and regulations of Texas are going to apply with few exceptions.

Prior to 2003, the rates paid and the policy forms used for writing insurance coverage were uniform through out the State and anybody who dealt with insurance policies on a frequent basis such as agents and attorneys knew what the policies said and how they should be applied. In 2003 the insurance companies prevailed with rate deregulation and also obtained the ability to deregulate policy forms. The insurance companies ran with this new found freedom, and as a result, there are many policy forms in the market today, which makes it difficult for consumers to compare different products. One attempt to compare different insurance products can be found at http:www.opic.state.tx.us/hoic.php