Category: Flood Insurance Claims

When a property floods, the consequences are severe. The property may be condemned, and the more extensive the damage, the greater the cost of repairs will be. When an insurance company denies, delays or unreasonably disputes a claim, property owners may be forced to pay out of pocket for repairs unless they decide to pursue the matter in a court of law. Raizner Slania is dedicated to helping the victims of flooding receive their due compensation from insurance companies.


Barker Reservoir Release Lawyers

Raizner Slania Files Inverse Condemnation Lawsuit On Behalf of Commercial Building Owner

Raizner Slania has filed an inverse condemnation lawsuit on behalf of the owners of a West Memorial area retail center after the Addicks and Barker reservoir releases flooded the property following Hurricane Harvey.

Hurricane Harvey Makes Landfall on August 25, 2017

When Hurricane Harvey made landfall on August 25, 2017 on the Texas coast, it brought massive amounts of rainfall. Some areas in Houston received 50 inches of rainfall in just four days. However, despite the rainfall, the plaintiff’s property did not experience any flooding.

The Addicks and Barker reservoirs are part of a flood control system in the west side of Houston designed to protect downtown Houston from flooding. The dams on the reservoirs are owned and operated by the U.S. Army Corps of Engineers—a U.S. federal agency that operates under the Department of Defense.

The dams on the Addicks and Barker reservoirs protect downtown Houston from flooding by controlling the amount of water in Buffalo Bayou, the largest waterway running through the heart of the city. Normally, the dams remain open and water is allowed to pass freely, but the Army Corps of Engineers closes the dams during heavy rainfall.

When Hurricane Harvey hit Houston, the dam systems were in the middle of a massive renovation. On August 28, 2017 between midnight and 2:00 a.m., the Army Corps of Engineers began releasing water from both the Addicks and Barker reservoir systems. The Corps announced thousands of properties would experience flooding as a result of the release.

As both reservoir gates opened and released storm water into Buffalo Bayou in the middle of the night, neighborhoods, buildings, homes, offices, and roadways that were not otherwise flooded by Hurricane Harvey—including the plaintiff’s property—became inundated with water that continued to rise throughout the night and over the course of the next several days. Because of the rapid progression of rising water, many people did not have time to pack up or salvage any belongings and had to be rescued by boat, taking along nothing but the clothes on their backs.

Controlled releases of the reservoirs continued and many homes and businesses remained completely underwater for weeks. The plaintiff’s property was flooded by four to six feet of water that did not recede for over a week. The plaintiff’s property suffered severe interior and structural damage caused by the floodwaters.

Beyond the costs to repair the property and what may be months or years of lost rent, the plaintiff also faces a decrease in the fair market value of its property, both in the rental market and the sales market. Worse still, even once the plaintiff’s property is restored or rebuilt, the continued and long-term effects of mold, deterioration, and rot due to the unprecedented amount of time floodwaters sat inside the property remain unknown.

Violations of the Fifth Amendment

Under the Fifth Amendment, the government is prohibited from taking private property for public use without providing just compensation. When the Army Corps of Engineers decided to begin controlled releases of the reservoirs after Hurricane Harvey, it was for public use, constituting a taking of the plaintiff’s property.

Addicks and Barker Reservoir Release Lawyers

If your property was flooded by the Addicks and Barker reservoir releases, Raizner Slania can help you pursue just compensation under the Fifth Amendment. Contact us today for a free consultation to discuss your case.

Learn More About THE Addicks Barker Class Action

What is the case about?  

A class action lawsuit was filed on behalf of individuals who had their homes flooded after the U.S. Army Corps of Engineers intentionally conducted a controlled release of water from the Addicks and Barker reservoirs and flooded thousands of homes in Houston, that would not otherwise have flooded during Hurricane Harvey.

While the release of water from Addicks and Barker may have been necessary to protect downtown and other parts of Houston from even greater damage, the case seeks just compensation from the government for the intentional flooding of their properties. The case does not allege that the Corps committed any wrongdoing or negligent act.

Why is this case a class action?

A class action is a lawsuit in which one or more plaintiffs–in this case, Plaintiffs Angela Bouzerand, Wayne Pesek, Amy Pesek, and Fred Paul Frenger–sue on behalf of a group of people who have similar claims. Together, this group is called a “Class” and consists of “Class Members.”

In a class action, the court resolves the issues for all class members, except those who exclude themselves from the class. The case alleges that the U.S. Army Corps of Engineers’ decision to release water from Addicks and Barker impacted thousands of individuals in a similar manner and, therefore, seeks relief for all those affected.

Do you need to join the case? 

The proposed Class in Bouzerand, et al. v. The United States is defined as:

All persons or entities whose private properties were flooded as a direct result of the drainage of the Addicks and Barker reservoirs after U.S. Army Corps of Engineers discharged water from them beginning August 28, 2017.

If you meet the above definition, you are a member of the proposed Class. If the case moves forward and reaches what is called the “Class Certification” stage, you may receive notice from the parties with more details about the case and your rights and obligation if the Court decides to certify the class. Alternatively, if the Parties reach an agreement to settle this case, the Court will have to approve the settlement after allowing class members an opportunity to be heard and to state their positions and/or objections, among other things.

If you’d like your potential claim evaluated before then, feel free to contact our attorneys for a risk-free consultation.

Be careful of scams or high pressure sales tactics disguised as assistance to flood victims.

The Office of the Texas Attorney General has already received thousands of reports of fraud on Hurricane Harvey victims, from criminals impersonating government officials and insurance agents to fraudulent GoFundMe pages.

Ask questions, be vigilant, and take time to make sure you are comfortable before signing up for any services or sharing your personal information with anyone, including lawyers. If you are a member of the proposed class, as we have explained it, you are under no time pressure to retain an attorney.

Importantly right now, be vigilant at so-called “Town Hall” meetings hosted by for-profit companies, lawyers, insurance agents, and other private parties. While these meetings are sometimes well intentioned and provide helpful, informative information, do not share your contact information or sign up for any services (legal or otherwise) unless you are fully informed and comfortable doing so.

For instance, unless you have a prior relationship, lawyers should not solicit you in person at a Town Hall meeting to file or “join” a case. If a lawyer you do not know does this, they may be violating Texas ethical and even criminal rules. Lawyers who break these rules are not just committing a criminal act, but under many circumstances they can also be sued for what is called “barratry” under the law. Texas law has heightened prohibitions on lawyer solicitations that occur within 31 days of a disaster. Lawyers who break these rules, including by engaging in improper solicitations or “signing up” clients at Town Hall meetings, can be sued in court and required to forfeit their fees. If you have concerns about improper solicitations, you can report them to the Texas Bar by calling an attorney grievance helpline at 1-800-932-1900 or reporting this conduct here.

Addicks and Barker dam releases

West Houston Residents File Class Action Complaint for Inverse Condemnation

The attorneys of Raizner Slania LLP, together with Edelson PC, have filed a Class Action Complaint against the United States on behalf of property owners flooded by the Houston Addicks and Barker dam releases after Hurricane Harvey.

Around 2:00 a.m. on August 28, 2017, the United States Army Corps of Engineers (USACE) began releasing large amounts of water from both the Addicks Reservoir and the Barker Reservoir in an effort to prevent a massive failure of both systems. By doing so, the USACE knowingly flooded thousands of homes in the Houston area—homes which remain under water as of the filing of this lawsuit and will remain under water for several weeks to come due to the ongoing releases occurring from the dams.

This inverse condemnation lawsuit is not brought under the Federal Tort Claims Act and does not allege that any government official committed any wrongdoing. Instead, it alleges a violation of the Takings Clause of the Fifth Amendment of the United States Constitution. The Takings Clause specifically states that the government shall not take private property for public use from property owners without providing those property owners with just compensation. The intentional discharge of water from the Addicks and Barker dams has caused permanent damage to a class of property owners who would not have otherwise flooded but for the USACE decision to discharge the water. USACE stated that the reservoir release was done for a public purpose, and the government is obligated to compensate the property owners who were affected by this decision.

The lawsuit seeks a declaration that the actions constitute a taking under the Fifth Amendment of the Constitution, ordering the government to notify the impacted parties of its intention to compensate them for the taking, awarding just compensation, and any other relief as deemed fair by the court.

If you own property that was flooded by the Addicks or Barker dam releases, you may be entitled to compensation. Our lawyers are already taking action to protect the affected property owners’ rights. Contact Raizner Slania LLP today if you believe your home or business is in the affected area. We are available to provide more information for free at your convenience.

Texas New Insurance Law

Don’t Believe Everything You Read About The New Insurance Law – Especially When It Comes From Lobbyists

Contrary to what Texans for Lawsuit Reform wrote in its press release, the reduction of the penalty interest rate will disincentivize prompt payment during the claims process

Recent changes to Texas insurance law are set to have a considerable impact on Texans affected by Hurricane Harvey. This week, the lobbyist group Texans for Lawsuit Reform (TLR) issued a widely distributed press release concerning the recent changes to Texas insurance law.  In it, they say, “the new law does not affect the claims process.”  They say it “affects only the lawsuits that sometimes follow the claims process.”  They even say, “it does not create a new deadline for action by policyholders.”  There’s quite a bit of confusion about this new insurance law, and to be honest it isn’t very well written, but these statements from TLR aren’t correct.

Less than 1% of claims arising out of a major natural disaster actually result in lawsuits, so contrary to what TLR has distributed, this is very much about the claims process. The better and quicker that process is handled, the less likely it is that the claims process will lead to litigation. The goal of consumer protection laws is to put financial incentives in the right place and avoid litigation. When it comes to insurance, the stronger the penalty for non-compliance, the more likely it is that an insurance company will comply with the law during the claims process so that litigation can be avoided. Reducing the penalty interest rate by nearly 50% disincentives insurance companies to complete and conclude the claims process in a timely and efficient manner. It gives them a financial incentive to hold onto claims payment money longer. It materially affects the promptness with which the claims process is conducted, and it very much matters to Texans.

The part of the new insurance law that everyone is concerned about right now are the amendments to Section 542.060 of the Texas Insurance Code reducing the interest rate from 18% to 10%.  And for Section 542.060, September 1, 2017 is a very important date, because if you notify your insurance company of a claim on or after that date, the rate they must pay if the claim is unlawfully denied is cut nearly in half. This is the case regardless of whether or not a lawsuit is ever filed.

Section 542.060 has been around for a long time, and it has always required the payment of penalty interest on unlawfully delayed insurance claims, regardless of whether a lawsuit is filed.   In fact, our firm has seen many occasions where responsible insurance companies voluntarily complied with this law and paid the 18% interest during the claims process if their first estimate was understated, even in the absence of lawsuit or court order requiring them to do so.

The payment of penalty interest when a lawsuit is filed is treated differently that the ordinary claims process under the law. Under Section 542.060, a recalcitrant insurer must pay penalty interest any time a claim is unlawfully delayed, but they must also pay attorneys’ fees if that delay results in litigation.   This distinction for claims that result in litigation is addressed by a subsection of 542.060, which only requires the payment of attorney’s fees if a lawsuit is filed.

The TLR press release is misleading, because it inaccurately claims that the new insurance law only affects lawsuits and not the ordinary claims process. The reduction in interest materially affects the claims process, because it disincentives insurance companies to act promptly and efficiently. Now they will pay half as much interest if they unlawfully delay a claim during the claims process. At this point, most of us have probably figured out that TLR had a draftsman’s role in House Bill 1774, and they intended its application to the claims process when they designed two different effective date provisions, one for “an action,” and a separate one for “a claim.” Our state lawmakers may be confused about this, but it’s a safe bet that TLR isn’t.

Don’t Trust Everything You Read About The New Insurance Law

So the bottom line is this: If an insurance claim is made before September 1, 2017, then 18% interest applies to the claim if the insurer delays payment.  If the claim is made on or after September 1, 2017, then the new 10% interest rate applies.  And as TLR accurately points out, all of this applies to state law claims, which do not include flood claims made under a National Flood Insurance Program insurance policy. If you have a flood claim under an NFIP policy, your claim is not affected by the new Texas law. But if you have a wind claim or even an excess flood policy issued outside of NFIP, then the prudent course of action is to notify your insurer of your Hurricane Harvey claim before this Friday, September 1, 2017.

After all, there just may be a reason why TLR is suggesting otherwise.

Lawmakers from Hurricane Hit Communities Enabled and Voted for the Insurance Bill

Texas Lawmakers From Some of the Hardest Hit Communities Voted For House Bill 1774

As the damage caused by Hurricane Harvey continues to worsen in the heavily impacted areas, local heroes have emerged.  The long list of first responders, civic leaders, and volunteers include Aransas County Emergency Management, Texas Task Forces for Search and Rescue, numerous departments of public safety (DPS), and scores of local fire and police departments. Thousands of local citizens have donated boats and time to perform impromptu rescue services and over 3,000 local search and rescue operations have been completed.  True leadership is emerging – Constables are riding along with their men and women and personally carrying out these rescue missions.  Even Houston Texans star J.J. Watt has waded in, personally donating $100,000.00 and setting up a donation website.

While we celebrate these first responders and heroes in our communities, we also need to be mindful of how poor leadership can have devastating impacts on damaged communities, and there are glaring examples of that as well.

The powerful, foreign insurance lobby used local Texas legislators, lobbyists, and downtown lawyers to pass House Bill 1774, which creates new challenges for Texas families, small businesses, churches, and property owners.  This part could not be made up – the law takes effect this Friday, September 1, 2017.  The insurance companies and financial institutions behind this damaging new law are based far away from Texas and its impacted communities. Many are based on Wall Street, in Massachusetts, and as distant as London, Zurich, and Tokyo.  But these foreign insurance carriers could not pass the laws themselves, they needed local Texas enablers willing to push the legislation forward, putting foreign interests above the well-being of Texans and our communities.

Galveston, Dickinson, League City, and other local communities fighting through this natural disaster have their local Representative, Greg Bonnen, to thank if their insurance carriers do not fully and promptly pay their storm claims.  Bonnen authored and pushed this anti-Texan legislation through. Harvey-impacted citizens in Matagorda, Lake Jackson, Angleton, and Brazoria can ask Dennis Bonnen why he sponsored House Bill 1774.  Look to see whether your own local Representative sponsored this legislation, but be prepared to be disappointed – there were over 65 Texas sponsors.

Rockport and Corpus Christi remain devastated by this Category 4 Hurricane, and what benefit to Texans could Corpus Christi and Rockport State Representative Geanie Morrison have possibly identified when she co-sponsored this insurance bill, making it much harder for her own constituents to hold an insurance company accountable for unlawful behavior. Those in West Houston should closely analyze whose interests Representative Dwayne Bohac had in mind when he sponsored the insurers’ windstorm bill. In Friendswood, Texas Senator Larry Taylor carried the water for the conglomerate foreign insurance carriers as he sponsored the Senate version of the bill.  Houston Senator Paul Bettencourt did the same.  Numerous other Texas State Representatives and State Senators failed to stand up to the out-of-state insurance lobby.  Their communications teams will likely laud their civic participation in helping clean up after Hurricane Harvey, despite their detrimental work authoring, sponsoring, and voting for House Bill 1774 instead of look after the property rights of Texas families and businesses.

Texas Lawmakers Picked Big Foreign Insurers’ Money Over Texans’ Property Rights

As citizen-heroes continue to pour in to help their neighbors all along southeast Texas, it is important to pay tribute to what makes Texas truly great – courage, even in adverse times, and a willingness to fight for what is right.   It is also important to identify what Texas legislators voted to benefit foreign insurance and financial institution interests, rather than their own neighbors, friends, and family members.

Hurricane Harvey Insurance Claims

Hurricane Harvey Insurance Claims Misinformation

There is a quite a bit of incorrect information floating around about Hurricane Harvey and notice of an insurance claim, some of it propagated by pseudo first party insurance law experts, or honestly, lawyers who don’t know what they are talking about. Homeowners just trying to help are jumping into the fray, and repeating some of this incorrect information. There’s particular confusion about what the impact of notice on or after September 1, 2017 will be, and even some confusion about the types of policies the new law applies to. Let’s clean some of this up, because the notice requirements differ based on the type of policy. And next to ensuring the safety of your family and friends and protecting your property, nothing is more important right now than understanding the logistics of how and when you should notify your insurance company of a claim.

The new Texas insurance law applies to wind claims, not flood claims. The differences are discussed in more detail below, but here’s the key takeaway: Policies that cover wind claims are governed by state law, so the new rules apply to wind claims. Policies that cover flood claims are governed by federal law and are part of the National Flood Insurance Program, which in turn is part of FEMA, so the new Texas rules do not apply to flood claims.

The impact of notice on or after September 1, 2017 only affects the interest rate on unlawfully delayed claims: Here’s where people are getting the most confused. The new law goes into effect on September 1, 2017 in all its glory. There’s nothing you can do to suspend its application. It applies to any lawsuit filed after that date – which means the new Texas insurance law will impact every lawsuit arising out of Hurricane Harvey. There is one, and only one exception to this. If you file your claim with the insurer before September 1, 2017, then the existing interest rate of 18%, and not the new rate of 10%, applies to unlawfully delayed claims. The information circulating that suggests notice prior to September 1, 2017 can suspend application of the new law in its entirety is just flat wrong. Like it or not, the new law will apply to virtually every single Hurricane Harvey claim. Notice before September 1, 2017 only affects the interest rate, but that’s a pretty big deal.

Why the 18% interest rate matters: Having handled many hundreds of lawsuits arising out of unlawfully handled Hurricane Ike claims, and literally thousands of first party insurance cases over a 25 year period, here’s what I know. The largest stockholders of most of the major insurance companies are massive asset managers like Vanguard, BlackRock, and State Street. They control trillions of dollars in assets, and have more money than many states or countries. And that means you can’t hurt them. You can’t teach them any lessons. The only thing that matters to them is the math. That’s why the interest rate is so important. At an 18% interest rate, an unlawfully delayed claim payment will cost a recalcitrant insurer an additional 50% of the value of the claim over two years, and after four years, they must pay twice the value of the claim. But at 10% interest, they can delay payment for a full ten years before the interest penalty doubles the value of the claim. Time is money, the insurance industry knows it, and the Texas legislature just cut the penalty for insurers who wrongfully delay property damage insurance claims by 45%. Of all the ways in which lawmakers betrayed the communities they represent, including some from the areas most affected by Hurricane Harvey, this windfall to the insurance industry hurts the most.

Let’s go over some specifics about providing notice after Hurricane Harvey:

Notice of a flood claim: In the most general terms, a flood insurance policy covers water rising up from the ground and seeping into a building or home. Much of the Houston area experienced flood damage. Flood policies are usually written through insurance companies, but they are part of the National Flood Insurance Program (NFIP), which in turn is part of FEMA. Not everyone has flood insurance. If you are in certain flood prone areas, a mortgage company will require flood insurance. But if you aren’t in a flood prone area, then flood insurance is completely voluntary and you are limited in what you can buy. You should give your flood insurance company notice of the claim right away, and you have to complete a proof of loss within 60 days of the loss. FEMA often extends the proof of loss date for major natural disasters, but you can’t count on that occurring. Our friends at United Policyholders have posted some valuable information about the flood claims process. A flood claim written on an NFIP backed policy is not subject to the September 1, 2017 time considerations under the new Texas law.

Notice of a wind claim: A standard homeowner’s insurance policy or commercial insurance policy will cover may different perils, including wind damage from hurricanes and tropical storms. If water comes into the home or building through a “storm created opening,” such as roof or window damage, then this type of policy should cover the loss. A wind loss claim is subject to the September 1, 2017 time considerations under the new Texas law. To avoid the 45% reduction in the interest rate, you must get notice of a wind claim loss on file with your insurance company before this Friday, September 1, 2017. And to avoid any miscommunications, it’s best to do this in writing.

What happens if there is both wind and flood damage, or you aren’t sure about the cause?: That’s simple. Give notice of both claims. Sometimes, it takes an engineer or other specialist to determine the cause of a loss, that is, whether it’s from wind, flood, or even non-covered items like wear and tear or manufacturing defects. If you don’t know, that’s ok, but be prudent and provide notice to both your flood insurer and your wind insurer.

Why did this change in the law happen?: Now that’s a great question. There are a handful of reasons, and more than a handful of culprits. We’ll address some of the why’s and who’s in future blog posts, and there’s blame to go around, but here’s some food for thought right now. Some of the biggest proponents of this new law, it’s author and sponsors, the people that overreached and overcorrected a perceived problem and helped the insurance industry grab and take liberties with Texas, some of these scoundrels who betrayed their communities, their friends, their family members, the same ones who are boasting of their efforts on social media right now, some of these state representatives and senators come from districts heavily impacted by Hurricane Harvey. We’ll point them out shortly.