Tag: Bad Faith Insurance

Commercial Fire Damage Lawyers

Industrial Building Owner Files Lawsuit After Insurance Denial

Our client, an industrial building owner, has filed a lawsuit against Rockhill Insurance Company, International Insurance Company Hannover SE, Antares AUL 1274, Liberty Syndicated LIB 4472, and Vericlaim Inc.

January 2017 Fire

On January 1, 2017, the plaintiff’s property suffered severe damage from a fire that broke out on the property. Immediately upon discovering the damage, the plaintiff filed an insurance claim and asked that the cost of repairs be covered pursuant to the policy.

On February 14, 2017, authorized adjusting representatives from Vericlaim confirmed that the damages were covered under the policy and approved payment for the damage in an official insurance company estimate of damages. On the same day, plaintiffs accepted the estimate of damages creating a binding and enforceable agreement. This should have led to the conclusion of the claim.

Rockhill, Hannorver, Antares, and Liberty are the insurers on the property. In response to the fire claim, the carriers assigned adjusters, consultants, and agents to the plaintiff’s file that were inadequately and improperly trained. In addition, these representatives violated standard insurance practices when directed by the carriers.

Specifically, the claim was assigned to an adjuster who originally prepared the accepted estimate of damages. The carriers refused to honor their coverage representation, and the adjuster failed to stand by the commitment he had made on behalf of the carriers.

Adjusters on the claim failed to perform a thorough investigation of the claim and instead delayed the claim payment and pointed to an approved vendor report in order to reach the non-payment outcome that they desired.

After the February 14 estimate of damages, the carriers and their administrators engaged in deceptive and unfair claim practices by attempting to leverage the claim amount that they knew they owed. The carriers and the adjusters on the claim ignored the promises they made on the claim payment and attempted to invoke appraisal as part of an unlawful negotiating process.

Because the carriers and adjusters confirmed coverage and the undisputed amount owed on the claim to plaintiff on February 14, 2017, they waived any right to later disclaim coverage and put the entire claim in an expensive and wasteful appraisal process.

As a result, the carriers crossly underpaid the claim and the plaintiff has still not been fully paid under the policy. The plaintiff was forced to hire a consultant to properly evaluate the property damage because the carriers refused to do so.

On June 14, 2017, the carriers attempted to place this matter into appraisal, which is in direct violation of the Texas Insurance Code, the common law duty of good faith and fair dealing, and is in breach of their contractual commitments. To put it simply, the carriers chose to act unreasonably in refusing to issue the claim payment their authorized representative confirmed and the plaintiff accepted.

Because of the carriers’ wrongful denials, the plaintiff has been unable to make necessary repairs to the property, which has caused additional damage.

The Carriers Acted In Bad Faith

Our client alleges numerous violations of the Texas Insurance Code, including the failure to effectuate a prompt, fair, and equitable settlement of a claim and misrepresentation of the insurance policies under which it affords property coverage to the plaintiff. The plaintiff also states the carriers are in breach of the insurance contract and have violated the Deceptive Trade Practices-Consumer Protection Act.

Commercial Fire Damage Lawyers

Insurance companies will often do anything to avoid paying out on claims. When an insurance company operates in bad faith, you will need experienced commercial fire damage lawyers to help you get what you are rightfully owed under your policy. If your insurance company is denying, delaying, or under-paying your fire damage claim, contact Raizner Slania immediately.

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.

Bad Faith Insurance Lawsuit Attorneys

Homeowners Association Files Bad Faith Insurance Lawsuit

Raizner Slania filed a lawsuit on behalf of a local homeowners association against Mid-Century Insurance Company after its hail damage claim was wrongfully denied.

April 2016 Bexar County Hailstorm

On April 12, 2016, a severe hailstorm swept through Bexar County causing significant damage to the roofs, interiors, and exteriors of condominiums contained in over 50 separate buildings managed by the policyholder homeowners association . Immediately upon discovering the damage, the homeowners association filed a hail damage insurance claim with Mid-Century to cover the cost of the repairs and other damages.

In response to the claim, Mid-Century assigned adjusters, consultants, and agents to the plaintiff’s file that were inadequate and improperly trained. Specifically, the claim was assigned to two adjusters, both of whom were not properly trained to handle this type of claim and failed to perform an adequate evaluation of the damage.

After a haphazard investigation of the property, the adjuster prepared an estimate of damages to the structure that grossly undervalued and ignored obvious damages to the property. Mid-Century relied solely on the adjusters’ investigation to determine what amounts, if any, to pay on the plaintiff’s claim. Mid-Century and the adjusters represented to the plaintiff that certain damages were not covered under the policy when in fact they were.

Mid-Century denied and grossly underpaid the plaintiff’s claim. In addition, Mid-Century continued to deny and delay timely payment of the damages it did accept. This caused the plaintiff to suffer significant economic impact, worry, distress, and continuing economic and physical damage.

Mid-Century Operated In Bad Faith

Our client cites numerous violations of the Texas Insurance Code, including failure to effectuate a prompt, fair, and equitable settlement of a claim, failure to implement reasonable standards for investigation of a claim, and violations of the Deceptive Trade Practices-Consumer Protection Act (DTPA).

Bad Faith Insurance Lawsuit Attorneys

Unfortunately for Texas policyholders, bad faith insurance practices are rampant. For policyholders whose claims have been wrongfully denied by their insurance company, the only way to seek full compensation is with the help of an experienced bad faith insurance lawsuit attorney. At Raizner Slania, our attorneys can help you get what you rightfully deserve under your policy. Contact us today to schedule a free consultation to discuss your case.

Texas Wind Damage Lawyers

Harris County Windstorm Damage Lawsuit

Our client, a local multi-story hotel tower owner, was forced to file a lawsuit against Everest Indemnity Insurance Company and Engle Martin after its commercial property damage insurance claim was wrongfully denied under Texas law.

April 2016 Windstorm

On April 18, 2016, a severe windstorm swept through Harris County and caused substantial damage to the roof, exterior, and interior of the plaintiff’s property. Immediately upon discovering the damage, the plaintiff filed an insurance claim with Everest for the damages caused by the windstorm. In response to the claim, Everest assigned adjusters, consultants, and agents to the plaintiff’s file that were inadequately and improperly trained.

Specifically, Everest assigned the claim to Engle Martin, who in turn assigned the claim to an adjuster. The adjuster and Engle Martin failed to perform a thorough investigation of the claim. The adjuster performed a substandard inspection of the property and failed to prepare any estimates or scopes of damages. The employee and Engle Martin also failed to hire qualified experts to properly assess the damage.

The employee and Engle Martin performed an inadequate, incomplete, and unreasonable investigation of the plaintiff’s claim, which Everest relied exclusively on to determine what amounts, if any, to pay on the claim.

As a result of the haphazard investigation, the plaintiff’s claim was denied. Everest represented to the plaintiff that the damages were not covered under the policy, when in fact they were. The plaintiff was forced to hire its own consultant to independently evaluate the property damage because Everest and Engle Martin refused to do so.

The Insurance Carrier Violated the Texas Insurance Code

Our client cites numerous violations of the Texas Insurance Code, including failure to effectuate a prompt, fair, and equitable settlement of a claim, failure to implement reasonable standards for investigation of a claim, and refusal to pay a claim without conducting a reasonable investigation. Additionally, our client also cites violations of the Texas Deceptive Trade Practices-Consumer Protection Act.

Raizner Slania: Texas Wind Damage Lawyers

If your insurance carrier wrongfully denied or grossly underpaid your Texas wind damage insurance claim, the experienced attorneys at Raizner Slania can help. We’ve helped policyholders across Harris County, throughout Texas, and around the country get the rightful payments they deserve under their insurance policies. Our consultations are free and you won’t owe us anything unless we help you recover compensation. Call us today to schedule your consultation.

hail damage insurance claim

Raizner Slania Files Tarrant County Hail Damage Lawsuit

Our client, a local industrial commercial property owner, was forced to file a lawsuit against Nationwide Agribusiness Insurance Company (Nationwide) after its hail damage insurance claim was wrongfully denied under Texas law.

March 2016 Hailstorm in Tarrant County

On March 17, 2016, the plaintiff’s property, a food distributorship building, was substantially damaged by a hailstorm that swept through Tarrant County. As a result, the roof, exteriors, interiors, business and personal property, and other machinery and equipment on the property sustained damage. Immediately after the storm, the plaintiff filed a hail damage commercial property insurance claim with Nationwide.

In response to the claim, Nationwide assigned representatives, adjusters, consultants, and agents to the plaintiff’s files that were inadequately and improperly trained. Specifically, Nationwide assigned the claim to a local adjuster who was not equipped to handle this type of claim.

The local adjuster performed a haphazard inspection of the property and refused to acknowledge all of the damages despite the fact that the plaintiff pointed them out. The local adjuster also refused to retain appropriate consultants to assess the claim.

Nationwide and the local adjuster performed an incomplete and unreasonable investigation of plaintiff’s claim, which is evidenced by the undervalued estimate of damages for the necessary repairs for the property. Nationwide relied solely on the local adjuster’s substandard investigation when determining what amounts, if any, to pay out on the plaintiff’s claim. As a result of the haphazard inspection, misrepresentation, and inadequate investigation, the plaintiff’s claim was grossly underpaid.

Nationwide Violated Texas Law

Our client sites numerous violations of the Texas Insurance Code, including failure to effectuate a prompt, fair, and equitable settlement of a claim, failure to adopt and implement reasonable standards for prompt investigation of claims, and failure to promptly provide a reasonable explanation for the denial of a claim. Additionally, our client also cites violations of the Texas Deceptive Trade Practices-Consumer Protection Act.

Raizner Slania: Texas Hail Damage Attorney

If your insurance carrier denied, delayed, underpaid, or disputed a Texas hail damage claim, you need an experienced team of property insurance lawyers to help you get the compensation you deserve. The bad faith insurance lawyers at Raizner Slania have helped scores of companies across Texas and around the country get the compensation they deserve under their policies. Call us today for a free consultation.

Arbitration Endorsements

Arbitration Endorsements – The Latest Insurance Industry Overreach

The insurance industry has yet another plan to seek various immunities and avoid public accountability in the form of a proposed arbitration endorsement. The Texas Department of Insurance will conduct a hearing on July 6, 2016 to consider the proposed endorsement.

What is the proposed arbitration endorsement?

Labeled Endorsement No. HO-802, the proposed form has some troubling provisions. Initially, the endorsement requires the parties to request and then participate in the appraisal process under the policy. If a dispute continues after appraisal, the parties must attend mediation. And if the dispute still remains unresolved after mediation, the policyholder and insurer must participate in arbitration.

How would the arbitration work?

The endorsement form requires there to be a single arbitrator. There’s no three person panel to provide a semblance of a level playing field. Instead, a group called Conflict Solutions of Texas appoints the single arbitrator and manages the process. You can read more about this group on their website, but a quick review shows a panel of attorneys, largely defense lawyers, and a few former judges. The group appears to have been started by several insurance defense lawyers with the Brin & Brin firm. The Brin firm is a long-standing, well respected firm in Texas, but let’s all be intellectually honest in what is being proposed. Mr. Brin’s bio on his website discloses his membership in various defense bar organizations, such as the Texas Association of Defense Counsel, the Defense Research Institute and the International Association of Defense Counsel. The firm boasts their successes throttling Texas consumers and policyholders on behalf of corporate defendants: “Our lawyers have secured defense verdicts in traditionally plaintiff friendly areas because we try cases in those areas on a regular basis. We know the people – both judges and jurors – and we know what works in each area.” Having practiced insurance law in Texas for about 25 years, I did not recognize one single panelist to be a policyholder lawyer. Not one.

To earn the right to participate in this process, a policyholder would have to travel to the closest city with a population of over 100,000. That’s fine if you live in Houston, Dallas or another larger city, but for rural policyholders, the enforcement of even a minor claim would involve a long road trip to a much larger city, and presumably one where the folks that run this arbitration “know the people.”

And if that doesn’t trigger your Spidey Sense, take an even closer look. Discovery is limited, and the insurer can refuse to produce parts of its files that it claims are privileged, with no way to address bogus privilege claims except to the single arbitrator. There are no depositions or other traditional discovery. There is no obligation to produce the critical, institutional documentation such as procedure and policy manuals that guide adjuster behavior.

The proposed endorsement even claims to be governed by the Federal Arbitration Act instead of the Texas version contained in chapter 171 of the Civil Practice and Remedies Code. Why? Because the Texas version actually has some level of protection for consumers, such as the invalidation of unconscionable arbitration provisions. Or the right to cross-examination. Or depositions. Or the basic requirement that the proceeding take place in the adverse party’s home county. The Texas act requires both the party and its attorney to sign off on an arbitration agreement if there is more than $50,000 in controversy. So, the Federal Arbitration Act it is, even for Texas insurers disputing Texas claims with Texas policyholders.

Not surprisingly, the whole process is kept secret. And if you decline to participate in the process: “we will proceed without you, and an arbitration award will be made by the arbitrator.”

What’s the purpose of this, if there’s already an appraisal provision in the policy?

Anyone familiar with Texas insurance policies and first party property insurance claims knows that most insurance policies in this state contains an appraisal clause. The past few years of court decisions have also taught us that it is nearly impossible to waive these provisions, and that they will be enforced. The appraisal process has been around for a very long time, and while it sometimes doesn’t work out to everyone’s satisfaction, it’s a fair process when everyone is following the rules. It’s quite simple: both sides select an appraiser, and if a tiebreaker is needed, either the appraisers or a court can appoint an umpire. The majority wins. According to the Texas Supreme Court, complicated causation questions can be resolved as a part of this process.

When handled competently and fairly, an appraisal is a lot like a three person panel arbitration. Frankly, appraisal and arbitration are largely indistinguishable, beyond the customary practice that appraisals are typically handled by adjusting or construction experts rather than lawyers. Any insurance company or policyholder can enforce an appraisal provision, and can compel a reluctant opponent to participate. Appraisal awards are largely enforced, with exceptions arising typically only when someone breaks the rules.

Given the presence of an effective dispute resolution process in the form of contractual appraisal, the insurance industry’s effort to trump a three person, professional, contractual process with what amounts to a star chamber – presided over by an omnipotent defense lawyer – represents a deeply cynical overreach. It is a blatant effort to nullify the appraisal process, and rewrite it with a process entailing a single arbitrator selected by the insurance industry. There is no chance whatsoever that any insurance company would pay an adverse appraisal award, if they can simply have their arbitrator overrule it.

Is there a discount for accepting this arbitration endorsement?

This is where the insurance industry really thinks that Texas consumers are just plain stupid. Recent documents obtained from TDI show that the supposed discount the industry will offer is a complete sham. The proponent of the endorsement, Texas Farm Bureau, raised its rates in the targeted counties, mostly in South Texas. If you accept the endorsement, they’ll then lower your rates by the same amount they just raised them. You read that right. They jack rates up by 25%, then lower them by the same 25%, provided you consent to the single arbitrator process. So, you pay the same as you did before, except now you’ve given up any legal leverage you ever might have to secure a fair payment.

What’s next?

The Texas Department of Insurance will conduct a hearing on the proposed arbitration endorsement on July 6, 2016 at TDI’s offices in Austin. Stay tuned, but speak up if you care about your rights. You can send TDI an email opposing this gambit by clicking on this link from the Texas Watch website.