Tag: Commercial Property Damage

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.

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.

Damage Claim

Harris County Hail Damage Lawsuit

Our client, a local hotel owner, was forced to file a lawsuit against Arch Specialty Insurance Company (Arch) after its hail damage insurance claim was wrongfully denied under Texas law.

April 2015 Hailstorm in Texas

On April 17, 2015, a severe hailstorm swept across Harris County and caused substantial damage to the plaintiff’s roof, exteriors, and interiors of the property. Immediately after the storm, the plaintiff filed a commercial insurance claim under its policy with Arch for damages caused by the hail. In response to the claim, Arch assigned representatives, adjusters, consultants, and agents to the plaintiff’s file. Specifically, Arch assigned a local adjuster with McLarens Global Claims Services. The local adjuster was inadequately trained to handle this type of claim and failed to perform a thorough investigation.

The local adjuster refused to acknowledge all of the damages to the property and did not prepare any estimates or scope of damages to the property or failed to provide those to the plaintiff. Without an estimate or scope of damages, the plaintiff was forced to prepare its own estimates for the local adjuster. The local adjuster ignored the plaintiff’s estimates and instead retained biased consultants who were not registered with the Texas Department of Insurance.

The local adjuster represented to the plaintiff that the hail damage did not occur during Arch’s policy period and was therefore not covered. As a result of the local adjuster’s haphazard inspection, misrepresentations, and inadequate investigation, Arch wrongfully denied the plaintiff’s hail damage insurance claim. Because of this, our client was forced to retain an attorney to prosecute its rightful claim for insurance benefits.

Arch Insurance Violated The Texas Insurance Code

Our client cites Arch’s numerous violations of the Texas Insurance Code, including failing to implement reasonable standards for a prompt investigation of claims arising under its policies, refusal to pay a claim without conducting a reasonable investigation with respect to the claim, and misrepresentation of the insurance policy under which it affords property coverage.

Texas Commercial Property Insurance Lawyers

If your insurance carrier wrongfully denied or grossly underpaid your Texas commercial property 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. Call us today for a free consultation to discuss your case.

deceptive contractor

Deceptive Contractors Waiving Deductibles

After storms have pelted Texas with wind, rain, and hail over the past few months, contractors from all around the country are coming to places like Fort Worth and Wylie and placing signs and ads for homeowners and business owners seeking to repair roofs. In some instances, they are offering to waive or rebate deductibles, such that property owners would not have to pay anything to get a brand new roof.  No deductible, and a new roof?  Sound too good to be true?  It is, and it’s illegal.

When a property owner receives money from a property or casualty insurance policy to repair damage, it is illegal for a contractor, or anyone else providing services to pay or rebate the insurance deductible, if the contractor is also inflating the cost of the repair to make up for the deductible.

While this seem like more of a problem for the contractor rather than the property owner, section 27.02 of the Texas Business and Commerce Code makes it illegal for an insured policyholder to participate in this practice. If the insured agrees to submit a claim under a policy knowing that the deductible has been rebated and the charges exceed what is customary in order to make up for it, then the policyholder can be in a lot of hot water.

This problem doesn’t stop with contractors who are operating outside of the law. In fact, some insurance companies seem to be encouraging this illegal practice, if not outright participating in it. Certain insurance companies are now offering to waive a deductible for a property owner if they will consent to use the insurer’s preferred contractor to do the repairs. This is often called a preferred vendor program, and it raises significant legal concerns. Oftentimes these preferred vendors have the insurer’s best interests in mind rather than their own client’s. They will do whatever the insurance company tells them to do – or not do – on repairs, rather than what is necessary to do the job right for their customers. When insurance companies offer to waive a deductible in exchange for an owner working with a preferred vendor, it may sound tempting for many consumers – but it’s often a trap for consumers, as the preferred vendor will do a lesser scope of work just to save the insurance company money. And when insurance companies sweeten the pot by offering to waive a deductible, they are not only harming consumers with their preferred vendor programs, but they appear to be breaking the law as it is written in Section 27.02 of the Texas Business and Commerce Code.

If it sounds like it’s too good to be true, it very well may be. Consumers can avoid this problem by researching contractors and learning more about who they are and what their other customers say about them. There are many legitimate contractors who operate within the requirements of the law, and it’s important for consumers to only do business with contractors who follow the law.

Policyholders might be anxious to get damage repaired as soon as possible, but it’s important to do the proper research before hiring anyone to fix the damage. If you are ever in doubt, contact a licensed public adjuster or an attorney for advice.

Raizner Slania: Texas Bad Faith Insurance Attorneys

If your commercial property insurance carrier has denied, delayed, underpaid, or disputed your insurance claim, the experienced Texas insurance litigation attorneys at Raizner Slania can help. Please contact us today for a free initial consultation. We handle all bad faith insurance litigation cases on a contingency fee basis, meaning you will not pay attorneys’ fees unless we help you recover on your claim.

insurance claim

How Much Time Does An Insurance Company Have To Pay An Insurance Claim In Texas?

The recent storms that have hit all over Texas – from Houston to Fort Worth to San Antonio – will have many property owners filing commercial property insurance claims. Regardless of how and when property damage occurs, insurance companies are governed by regulations that dictate how quickly they must acknowledge, investigate, and resolve claims. To best prepare for filing your business insurance claim, it’s important to know how long the claims process generally takes and what you can expect.

Step One: Providing Notice of the Claim

It may seem obvious, but it cannot be understated how important it is to immediately contact your insurance carrier once you have discovered property damage. While some damage might be obvious, like a tree falling on your roof, other damage may be harder to spot, like small holes in the roof from shingles blown off in a storm. In both cases, failing to address the damage could cause further damage to the property. To provide evidence of the damages you are claiming, take pictures and/or video of all affected aspects of the property. You must always give “reasonable notice” of a claim to your insurer, and oftentimes insurance policies specify a time period of one to two years.

Step Two: The Investigation Process

Once you have submitted your claim, your insurance carrier has 15 calendar days to 1) acknowledge the claim, 2) begin its investigation, and 3) request any additional information it reasonably requires. All of this must take place within 15 days of notice, or in the case of a surplus lines carrier, 30 days of notice.

Step Three: Approval or Denial

After the insurance carrier has received all requested documents, they have 15 days to make a determination on the claim. If the claim is approved, the carrier has five business days to issue payment. If the insurer is a surplus lines carrier, it has 20 business days issue payment.

Penalties

The insurance process in Texas is legally required to be complete within 60 days of the initial notice, unless a specific exception applies. If the insurance company fails to follow these rules, Texas policyholders have the right to collect 18% annual interest and attorneys’ fees, in addition to the claim amount.

Exceptions

In the case of a natural disaster, it may be logistically difficult for an insurance company to properly investigate and make determinations on a massive number of claims in the statutorily prescribed timeframe. An insurance carrier that needs more time address a claim can take 45 days to make its decision as long as it sends the policyholders notice explaining the delay. The Texas Department of Insurance can also grant insurance companies an additional 15 days to decide on a claim if there has been a natural disaster.

Bad Faith Insurance Attorneys

More information on Texas prompt payment and unfair claims settlement practices rules can be found in Section 542 of the Texas Insurance Code, If your insurance company has unlawfully delayed your commercial property insurance claim, you have the right to seek compensation. The attorneys at Raizner Slania have extensive experience helping policyholders obtain rightful and timely payments from insurance companies around the world. Call today for a free consultation.

hailstorm property damage

Hailstorm Property Damage Lawsuit Filed in Dallas County

Our client filed suit against Endurance American Specialty Insurance Company (Endurance) and Engle Martin & Associates Inc. after its commercial hailstorm property damage claim was underpaid.

October 2014 Dallas County Hailstorm Property Damage

On October 2, 2014, a wind and hailstorm caused significant property damage in Dallas County, Texas including damages to the plaintiff’s roof and interiors. Immediately upon discovering the damages, the plaintiff filed insurance claims under its policy for the damage caused by the storm.

The insurer of the property, Endurance American Specialty Insurance Company, assigned adjusters that were inadequate and improperly trained. Specifically, Endurance assigned the claim to an internal adjuster who is not licensed in the state of Texas. In turn, this adjuster reassigned the claim to Engle Martin & Associates, which again reassigned the claim to its own local adjuster. This adjuster was not equipped to handle this sort of claim and failed to perform a thorough investigation of the property. As a result of the substandard investigation, the plaintiff was paid only a small portion of its commercial property insurance claim, the rest of its claim was denied, and the claim was closed. The plaintiff requested that the damage be re-evaluated, but despite this request for a second look, again its damages were not acknowledged and its claim was denied.

Violation of Texas Insurance Law and Acting in Bad Faith

The insurance carrier failed to acknowledge obvious commercial property damage and underpaid large portions of our client’s claim for repairs under its insurance policy. Because of this, our client was forced to retain an attorney to prosecute its claim for insurance benefits. The insurance carrier continued to delay and/or deny payment for the necessary repairs, which has caused a significant negative economic impact on our client’s business, worry, distress, and continuing economic and physical damage.

Our client cites violations of the Texas Insurance Code including a failure to effectuate a prompt, fair, and equitable settlement of a claim, failure to provide a reasonable explanation for the denial of a claim, and refusal to pay a claim without a reasonable investigation, among others. Our client alleges that the insurance carrier acted in bad faith and violated the Texas Deceptive Trade Practices-Consumer Protection Act.

Dallas County Bad Faith Insurance Attorneys

If your commercial insurance carrier has acted in bad faith and denied, underpaid, delayed, or disputed your property damage claim, the attorneys at Raizner Slania can help. We have extensive experience helping policyholders obtain their rightful payments from insurance companies. We work on a contingency fee basis, so you don’t owe us anything unless we recover for you financially. Call us today for a free consultation.