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.
On the issue of reopening closed claims, it is claimed that adjusters were getting bonus pay for denying a claim. Furthermore, if it was determined the adjuster did something wrong on a visit they risked not getting paid anything. The result of this being that the adjuster would not reopen a claim to see if anything actually was done wrong.
When any of the above happens to a home owner and the home owner is forced to file a lawsuit Texas Insurance Law has a statute to help. Section 542.003 Texas Insurance Code, says it is illegal to compel a policyholder to file a lawsuit to recover an amount due under a policy by offering substantially less than the amount ultimately recovered in a suit brought by the policyholder.
Insurance companies make money when they get away with denying claims or paying less than the full value of the claim. The making money part is okay, as long as they are not breaking the Insurance Laws and cheating policyholders by their actions.
Whenever you have an insurance claim, you need to make sure you are getting what you bargained for when you purchased the insurance policy. Don’t be afraid to talk with an experienced Insurance Law Attorney to make sure you are not being underpaid on your claim.