Homeowners in Grand Prairie, Arlington, Fort Worth, Dallas, Mesquite, Garland, Irving, and other places all through Texas scored a minor victory recently. This according to a Houston Chronicle article published this July. Much of the article is included here.
It appears homeowners insured by the two insurer’s of last resort will receive additional payments for their Hurricane Ike claims.
The two insurer’s are The Texas Windstorm Insurance Association and Texas Fair Access to Insurance Requirements Plan. These two insurers sell insurance coverage to those who can’t find it in the private market. They have agreed to settle cases brought by state regulators over delayed payments and disputes over damaged roofs and other claims that resulted after the 2008 Hurricane Ike storm hit the Texas Gulf Coast.
As is normal in these situation, the companies are settling without admitting they violated any insurance regulations.
Under the settlement with the Texas Department of Insurance, both companies agree to provide more training for adjusters and claims examiners, to upgrade their technology to improve tracking of claims and comply with prompt payment deadlines.
This has come about after hundreds of policyholders sued, following Hurricane Ike, and their claims handling practices led to state investigations.
The Texas Insurance Code, Section 542.056, requires that written acceptance or rejection of claims be sent after the insurer has received the information they need to assess a claim. This requirement was not being met.
TWIA was found by the Texas Department of Insurance to have had 600 complaints by August of 2010 and Fair had 100 complaints by April that were justified complaints.
Both insurers agreed to give premium credits of 18 per cent as interest on the claims that were not paid within the deadlines imposed by Texas Insurance Code, Section 542.060.
The two insurers also agreed to treat roof shingles unsealed by hurricane winds as damages. Policyholders had complained that Ike winds blew their shingles back, breaking the seals that keep them adhered to each other and prevent water from leaking through. TWIA and FAIR had not considered loose shingles damaged in assessing claims.
This settlement requires the insurers to give homeowners premium credits for roof claims that were denied when they should have been paid.
The also agreed to pay “overhead and profit” to policyholders unfairly denied the payments. Such payments are made for damage that would likely require the use of a general contractor, even when the homeowners oversee the work themselves.
These two insurers are also required to file reports with the Texas Department of Insurance noting which customers receive the additional benefits so that these can be audited to confirm the agreement is being fulfilled.
For the policyholders who are owed more than their premiums, they will get credits in the amount of the premium and checks for any surplus.
This settlement does not apply to policyholders claims that have already been settled or to the ones that remain in litigation. Neither TWIA, FAIR, or the department of insurance would say how many policyholders would be affected.
TWIA had been placed under more direct oversight earlier this year by state regulators, after a fraud inquiry by the Travis County district attorney.
This oversight will still continue, according to a spokesman for the Texas Department of Insurance, saying this was a separate issue.
As the result of private insurers reducing or eliminating coverage in the Gulf Coast area, TWIA has grown to insure almost 244,000 homes and businesses.
An attorney for many policyholders who has litigated many of these cases welcomes the involvement of the Texas Department of Insurance. He is quoted as saying, “I am concerned about the search criteria for identifying lifted shingles and hope the follow-through will be diligent. These violations were uncovered after thousands of hours of private-attorney time. TDI simply does not have the budget to do this type of discovery.”
Of relevant note here is that private insurers could also have implications resulting from this action.
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