Wind Driven Rain and Storm Created Openings: How Insurance Companies Are Using Policy Exclusions and Limitations to Deny Harvey Claims

Much of Texas is struggling to rebuild in the aftermath of Hurricane Harvey. Progress has been slow for many property owners because insurance companies are dragging their feet in paying out on claims. Many Texans are discovering their insurance companies are using certain exclusions and limitations in their policies to wrongfully deny legitimate claims. This approach has become common throughout the Coastal Bend area of Texas, as real estate owners and businesses are beginning to receive denial letters from their insurance companies.

Is your insurance company refusing to pay your claim on the grounds that the damage resulted from wear and tear and not wind from Hurricane Harvey? Are they admitting that there is damage to the interior of the building that resulted from wind driven rain, but refusing to pay because there was “no storm created opening”? Let’s take a look at the applicable clauses, and what you can do about it.

All Risks Policies and Wind Driven Rain 

Most policies issued in Texas consider any direct physical loss to be covered unless the loss is either excluded or limited by a specific policy provision. Wind damage from a hurricane and wind driven rain are both considered a covered cause of loss under most insurance policies. Because of that basic rule, insurance companies will have to identify and prove that a specific “Exclusion” or “Limitation” contained in the policy applies before they can avoid coverage.

In Texas, a policyholder bears the responsibility to demonstrate a covered cause of loss, but if an insurance company wants to avoid payment based on an exclusion or limitation, they have to prove that it applies.

Ensuing Loss and Policy Exclusions For Wear and Tear, Faulty Maintenance, Manufacturing Defects and Other Pre-Existing Conditions

Most policies contain a series of exclusions that are crafted to avoid coverage. One of the most commonly used exclusions pertains to “wear and tear.” If an insurer can demonstrate that roof damage was the result of wear and tear and not hurricane winds, there is no coverage under the policy.

Often, however, these condition-based exclusions are written back in coverage for an “ensuing loss.” An ensuing loss is a new loss that follows an earlier loss. In the case of an ensuing loss, the earlier loss is often uncovered under the policy, while the new loss is, meaning policyholders will only receive compensation for damage caused by the new loss and are left paying out of pocket for damage caused by the original loss.

For Hurricane Harvey claims, this is most commonly playing out like this: insurance companies will claim the roof, siding or other component of the building envelope were not damaged by wind, but rather deteriorated due to wear and tear over time. Then wind driven rain, a covered cause of loss, enters the building through the existing defects and causes interior water damage. The alleged original loss – the deteriorated roof – is not covered under the policy, so insurance companies do not have to pay for the water and wind damage caused by the storm. The interior water damage is covered under the policy, so insurance companies will compensate policyholder only for this damage.

When an insurance company denies damage to a roof, but pays for interior damage due to water or wind driven rain, it is typically a result of an ensuing loss type of provision.

Even in a circumstance where an insurer pays for interior damage due to ensuing loss, they will try to minimize those payments. The interior of a building includes anything beneath the roof covering, such as insulation and decking. When an insurer has a responsibility to pay for interior damage under a policy, they are obligated to pay for all interior damage, and not just limited payments for sheetrock. This includes substantial repairs for the parts of the building just below the roof, such as wet insulation or corroded decking.

Storm Created Opening Limitations

In addition to outright exclusions, an all risks policy may also contain certain “Limitations.” One common limitation provides that the insurer will not pay for damage to the interior of a building unless “the building or structure first sustains damage from a Covered Cause of Loss to its roof or walls through which the rain . . . enters.” In other words, with this type of limitation, there is no coverage for interior damage unless it resulted from a storm created opening. Many policies do not contain this type of limitation, and in those cases, interior damage is covered even without evidence of wind damage to the roof, siding or windows.

How Insurance Companies Are Abusing Wind Driven Rain Clauses

In the aftermath of Hurricane Harvey, insurance companies are facing the financial liability for billions of dollars in claims. Insurance companies are run first and foremost as businesses. This means insurance companies may not always have a policyholder’s best interests at heart. In order to avoid paying out on claims, many insurance companies are wrongfully claiming damages were caused by wear and tear, and not a covered loss such as wind driven rain.

While this might seem like a small detail, the reality is that this can determine if a claim is paid or not. Many policyholders in places like Fort Bend County, Rockport, and all along the Texas coast are shocked to find out insurance companies wrongfully classify their wind damage.

Hurricane Harvey was a Category 4 hurricane with maximum sustained winds at 130 miles per hour. Wind damage from Hurricane Harvey was obvious. Roofs were destroyed, trees were downed, and properties were decimated. So why do insurance companies fraudulently deny these claims?

Very few policyholders understand the nuances and complexities of commercial insurance and are unaware of their rights. By giving policyholders the runaround, companies are saving themselves millions of dollars in payouts. This is wrong and insurance companies must be held responsible.

Raizner Slania LLP Helps Policyholders With Hurricane Harvey Wind Claims

If you regularly pay your premiums, you are entitled to full coverage under your insurance company. If your insurance company has wrongfully denied, delayed, or underpaid your claim, call the experienced Hurricane Harvey wind claim lawyers at Raizner Slania LLP today. We have a successful track record of taking on some of the largest insurers in the country. Don’t wait to get help on your Hurricane Harvey claim.

Hurricane Harvey Wind Claim

Performing Arts Center Files Hurricane Harvey Lawsuit

Raizner Slania LLP has filed a lawsuit on behalf of the owner of a performing arts center in Fort Bend County against Sentinel Insurance Company, LTD after its Hurricane Harvey wind claim was wrongfully denied.

Hurricane Harvey Makes Landfall

When Hurricane Harvey made landfall on August 25, 2017, it was a Category 4 hurricane with maximum winds of 150 miles per hour. All across the Texas coast and further inland, wind ripped through commercial and residential properties. On August 26, 2017, Hurricane Harvey caused significant damage to the plaintiff’s property. Sizable portions of the roof were compromised by wind, which allowed rain to be driven in, causing substantial damage to the interiors of the property.

Harvey completely destroyed the roof, interior, ceiling, windows, walls, flooring, and other parts of the physical structure. In addition to structural damage, other valuables such as electronics, furniture, equipment, props, and one-of-a-kind costumes were completely ruined.

Immediately after the storm, the plaintiff promptly filed a claim with Sentinel, alerting them to the extensive damages. In an effort to assist Sentinel with the claims process and to mitigate any further damages to the property, the plaintiff engaged a roofing contractor to perform emergency mitigation services and assist with estimating some of the repair costs.

According to the “Inside Claims Rep” from Sentinel, who does not even appear to be located in Texas, the plaintiff’s claim was denied in full on the basis that water entry was not due to a storm created opening, but appeared to be related to heavy rainfall from Hurricane Harvey.

It is unclear at this time whether Sentinel or their Inside Claims Rep conducted any testing whatsoever or made any attempt at preparing an estimate reflecting these outlandish findings. If any testing was conducted or estimates were in fact prepared, the documents and/or explanations were not provided to the plaintiff. Instead, Sentinel simply denied the claim and closed the file, a move designed to save Sentinel hundreds of thousands of dollars.

Although Sentinel has, to date, provided no clear documentation of their inspection or findings, it denied the claim in full on September 5, 2017. Because Sentinel has refused to pay out the claim, the plaintiff’s business has been crippled. The plaintiff had to suspend operations for several months and lost several long-term rental contracts due to the dilapidated state of the property.

Sentinel Wrongfully Denied the Wind Claim

Sentinel failed to attempt to effectuate a prompt, fair, and equitable settlement of a claim, failed to adopt and implement reasonable standards for prompt investigation of the claim, and failed to provide a reasonable explanation for the denial of a claim. Our client also alleges Sentinel violated the Texas Deceptive Trade Practices-Consumer Protection Act.

Get Help With Your Hurricane Harvey Wind Claim

Hurricane Harvey caused billions of dollars in property damage, and insurance companies are using bad faith tactics to avoid paying out on thousands of claims. If your insurance company is denying or undervaluing your Hurricane Harvey wind claim, you will need the help of the experienced insurance lawyers at Raizner Slania LLP to get your rightful compensation. Call us today for a free consultation to discuss your case.

Rockport Wind Claim Lawyers

Hurricane Harvey Caused Unprecedented Wind Damage In Rockport

It was difficult to prepare for a storm like Hurricane Harvey. When Harvey came ashore in late August of last year, few anticipated the widespread damage that would ensue. As a Category 4 hurricane, Harvey had maximum sustained winds of 130 miles per hour. These winds ripped through the coastal city of Rockport, Texas, and the city is still struggling to rebuild over five months later.

Hurricane Force Winds Rip Through Rockport, Texas

Although Hurricane Harvey dropped an unprecedented amount of rainfall, the hurricane force winds were what really crippled the city of Rockport. The city is still grappling with massive amounts of debris shaken loose from the storm. In the five months since Hurricane Harvey, the city of Rockport has hauled away 2.5 million cubic yards of debris, which accounts for one-fourth of all debris in Texas. This is astonishing considering only 100,000 people live in Rockport year round. The city of Houston, which is over 200 times larger, has removed just slightly more debris than Rockport at 3 million cubic yards.

Unfortunately for the city of Rockport, there are still many piles of debris to clear. Local officials in Rockport have estimated it will take between three to five years for the city to completely rebuild.

Wind and Rain Cause Substantial Damage

While Rockport didn’t receive as much rain as other parts of Texas, the rain it did receive in conjunction with high winds caused serious damage. For many property owners, the wind ripped off roofs, windows, and other structural components of property, creating openings for rain to cause water damage. Even for properties where there was no storm creating opening, water poured in through seals, vents and other building components and caused massive interior damage.

Once rain reaches the inside of a property, it will require extensive restoration work to fix the resulting damage. Some buildings will need to be completely rebuilt. For business owners, overcoming the damage caused by Hurricane Harvey just might be too difficult. It is estimated one-fourth of businesses in Rockport damaged by Harvey will not reopen at all, due in part to the difficult and lengthy insurance claims process.

Not only are insurance companies swamped with claims, they are also doing everything in their power to limit payouts. Many businesses don’t have the money to begin repairs themselves and it could take months before insurance companies pay out. This problem is compounded by the fact that water damage needs to be taken care of immediately to prevent the growth of black mold and other serious property damage.

What Rockport Businesses Can Do

No property in Rockport was safe from the 130 miles per hour wind brought by Hurricane Harvey. If your business suffered wind damage, you need to immediately contact an attorney. Insurance companies will do everything they can to avoid paying out large insurance payments. To get the rightful compensation under your policy, you need an aggressive and experienced insurance trial lawyer by your side.

Rockport Wind Claim Lawyers

At Raizner Slania LLP, our insurance lawyers have taken on some of the largest insurance companies in the world on behalf of our clients. We are national leaders in insurance litigation and are proud to dedicate our time to helping Hurricane Harvey victims recover. If your property suffered wind damage during Hurricane Harvey, call us today to schedule a free consultation to discuss your case.

Corpus Christi Hotel Property Damage Lawyers

Corpus Christi Hotels Still Struggling With Hurricane Harvey Claims

For cities along the Texas coast, like Corpus Christi, tourism is a huge industry – or rather it was before Hurricane Harvey. It’s been over five months since Hurricane Harvey came ashore, but many businesses, particularly hotels and motels, are struggling to get back on their feet.

Hotels and motels face unique challenges after a natural disaster. In the case of Hurricane Harvey, many hotels and motels in Corpus Christi suffered massive amounts of flood and wind damage. Unfortunately for hotel and motel owners, commercial insurance claims can take a long time to resolve, and even longer in the event of a large-scale natural disaster.

To add insult to injury, many Corpus Christi hotel owners are discovering their insurance companies aren’t as honest as they thought. Hurricane Harvey caused billions of dollars in property damage throughout Texas, and insurance companies are doing everything in their power to mitigate their own financial losses by avoiding paying out.

Hotel owners who have filed insurance claims are facing unnecessary delays, bad faith tactics, and outright denials. While hotel owners are not the only ones facing these challenges, the nature of their businesses means the effects of this insurance company bad behavior are hitting their economic viability particularly hard.

When an insurance company unnecessarily delays a claim, hotel owners lose money when they need it the most. Just a small amount of wind or water damage can shut an entire hotel down, causing them to lose business. Many hotel owners are being forced to pay for repairs themselves or risk losing business. If damages go unrepaired, a hotel owner can even face challenges with the franchisor, and potentially even lose their flag.

To make matters worse, tourism to hurricane affected locales like Corpus Christi has seen a dramatic decrease since Hurricane Harvey, making it even more difficult for hotel and motel owners to return to normal. The difficulty of rebuilding is causing some hotel and motel owners to sell their damaged properties at a huge loss.

Rebuilding after a natural disaster can be a difficult process, but business owners aren’t alone and they have legal rights. If a hotel owner pays their insurance premiums, they deserve full coverage under their policy. After a natural disaster, many insurance companies take advantage of policyholders who are desperate or unaware of their rights by offering lowball settlements. This is wrong, and by partnering with an experienced Texas insurance lawyer, hotel and motel owners can get full compensation for their property damage.

Corpus Christi Hotel Property Damage Lawyers

At Raizner Slania LLP, we understand that your hotel isn’t just your business; it’s your livelihood. We know how insurance companies try to avoid paying out on claims and fight aggressively for our clients to get them the most under their policies. If your insurance company is delaying your claim, or if they have underpaid or denied your claim, don’t wait to call us. We can help you get your hotel up and running again. Contact us to schedule a free consultation.

Hurricane Harvey Wind Claim

Medical Office Owner Files Bad Faith Insurance Lawsuit After Hurricane Harvey

Raizner Slania LLP has filed a bad faith insurance lawsuit on behalf of a Houston medical office owner against Acceptance Indemnity Insurance Company after its insurance claim was wrongfully denied.

Acceptance has a history in Texas of conducting arbitrary, outcome-oriented investigations intended to deny legitimate claims. Despite Acceptance (and its parent company, IAT Insurance Group) collecting substantial amounts each year from Texas in premiums, Acceptance has intentionally shielded itself from regulation by the Texas Department of Insurance by remaining a non-admitted foreign surplus lines carrier.

Instead, the company rewards claim representatives and consultants who identify grounds to exclude property damage claims under their policies, in violation of Texas law and the provisions within the insurance contract. It is for these reasons that Acceptance/IAT Insurance Group has been sued many times in the last few years in Texas with continual allegations of bad faith, fraud, and misrepresentations being levied against it. Acceptance often settles cases and requires stringent “confidentiality agreements,” so the wronged policyholders are not permitted to tell their stories.

Hurricane Harvey Devastates Texas

Hurricane Harvey came ashore on August 25, 2017 as category 4 hurricane. Our client’s property suffered substantial wind damage from Hurricane Harvey. Immediately upon discovering the damage, our client filed an insurance claim with Acceptance.

Because Acceptance does not have a single employee in Texas, they assigned The Artisan Works Group to handle the claim. Although Texas law provides that an insurer has a “non-delegable duty” to responsibly handle claims, delegate is precisely what foreign insurance entities like Acceptance do on a regular basis. Artisan Works commenced its investigation by assigning the claim to a local adjuster.

The local adjuster observed that hurricane force winds ripped up the roof seams, causing “severe” saturation to the roofing system and leaking into the interior of the building. The adjuster strongly recommended a full roof replacement due to the wind damage, replacement of ceiling tiles (in affected rooms), and significant repair to the drywall and insulation (above the flood line). Subsequently, Acceptance asked the adjuster to revise his estimate on two separate occasions. Ignoring the obvious damages already conceded in writing, the adjuster and Artisan Works Group did what they were ordered to do by Acceptance and lowballed the claim.

Acceptance derailed the claim process, contending the water entry was not due to a storm created opening and that only a roof repair was warranted despite blatant evidence of the roof caving in. Without consulting any experts, Acceptance refused to pay the claim. Acceptance’s refusal to pay for necessary repairs has crippled our client’s ability to operate its business.

Acceptance Engaged In Deceptive And Unfair Trade Practices

Our client cites numerous violations of the Texas Insurance Code, alleging Acceptance failed to effectuate a prompt, fair, and equitable settlement of a claim and that Acceptance misrepresented the insurance policy under which it affords coverage to the policyholder.

Get Help With Your Hurricane Harvey Wind Claim

Hurricane Harvey caused billions of dollars of property damage. Insurance companies are desperate to limit Hurricane Harvey claims payouts. If your insurance company isn’t being straight with you, call the experienced insurance lawyers at Raizner Slania LLP today. We can help with your Hurricane Harvey wind claim and make sure you get rightful compensation under your policy. Call us today to see how we can help.

Harris County Insurance Lawyers

Harris County Apartment Complex Owner Files Insurance Lawsuit

Raizner Slania has filed an insurance lawsuit on behalf of a Harris County apartment complex owner against AmRisc LLC, Certain Underwriters at Lloyd’s London, Indian Harbor Insurance Company, QBE Specialty Insurance Company, Steadfast Insurance Company, General Security Indemnity Company of Arizona, United Specialty Insurance Company, Lexington Insurance Company, Princeton Excess and Surplus Lines Insurance Company, and International Insurance Company of Hannover.

January 2017 Windstorm

On January 20, 2017, a windstorm ripped through Harris County. The windstorm caused significant damage to our client’s apartment complex, including damage to building components like light fixtures, windows, drywall, flooring, and the roofing system. Immediately upon discovering the damage, the plaintiff filed an insurance claim and asked that the cost of repairs be covered pursuant to the policy.

The insurance carriers, through AmRisc, assigned adjusters, consultants, and agents to the plaintiff’s file that were inadequate and improperly trained. Specifically, the claim was delegated to AmRisc to assign the claims to Vericlaim as the third party adjusting firm to handle the claims. Vericlaim, in turn, assigned the claim to an internal adjuster. The internal adjuster was assigned as the adjuster with decision-making authority over the plaintiff’s claim under the policy. Vericlaim and the internal adjuster conducted an unreasonable and inadequate investigation of the property and wrongfully denied any windstorm damage.

Despite clear evidence to the contrary, Vericlaim and its internal adjuster claimed the damages were not storm related, and instead were a result of normal wear and tear, deferred maintenance, construction deficiencies, and other excuses. Additionally, they confirmed damages to thousands of shingles and other areas of the property, but instead of providing full indemnity, they understated the damages and admitted only spotty repairs.

The carriers engaged in and ratified this improper claims conduct and ultimately approved a gross underpayment of the contractual damages. This underpayment omitted important facts, physical evidence, and meteorological data supporting the plaintiff’s claim. The Carriers instead unreasonably blamed the loss on causes other than wind to avoid contractual responsibilities and to save themselves in excess of $1,000,000.

The Carriers Acted In Bad Faith

Our client cites numerous violations of the Texas Insurance Code, including failure to adopt and implement reasonable standards for prompt investigation of claims, refusal to pay a claim without conducting a reasonable investigation, and misrepresentation of the insurance policy under which it affords property coverage to the plaintiff.

Harris County Insurance Lawyers

If you are an apartment complex owner and your insurance claim was wrongfully denied or grossly underpaid, the Harris County insurance lawyers at Raizner Slania LLP can help. Call us today for a free consultation to review your case.