Raizner Slania LLP has filed an insurance lawsuit on behalf of a Dallas County commercial property owner (Plaintiff) against The Hanover Casualty Company (Hanover or Carrier) and its adjuster (collectively, the Defendants). The lawsuit was necessary due to the unreasonable denial of the Plaintiff’s commercial property windstorm damage claim.
Wind and Hailstorm Causes Damage to the Property
As a result of an October 20, 2019 windstorm, and a wind and hailstorm on or around April 19, 2020, the subject commercial property was severely damaged, which included damage to the building’s roof and HVAC system. Despite the property being substantially damaged by the wind and hailstorm, the Plaintiff felt fortunate to be protected by the insurance coverage they had obtained to insure the property from this type of catastrophe. After discovering the damage, the Plaintiff promptly filed a claim with Hanover, alerting it to the extensive damage.
Hanover’s claims-handling process resulted in a wrongful nonpayment, which omitted important facts and physical evidence in support of the Plaintiff’s claim and losses. On September 3, 2020, Hanover’s adjuster inspected the property and determined the roof sustained no wind or hail damage but did note damage to the siding. He also concluded the interior damage to the property was due to wear and tear and/or maintenance issues. He issued a denial letter on September 14, 2020, stating the value of the damage he found was well below the policy’s deductible amount.
The Plaintiff was forced to hire their own consultants, which identified dramatic damage that ruined the building’s roof, HVAC, exterior, and interior. Despite clear evidence present of covered damages, Hanover failed to issue the payment owed under the insurance policy covering the Plaintiff’s property and instead authorized continued delays and underpayments.
To this day, due to inadequate and haphazard investigation, Hanover has refused to fully pay for the covered damages under the policy.
Plaintiff Issues Demand Letter
On June 1, 2017, Governor Abbott signed House Bill 1774 into law as Section 542A of the Texas Insurance Code. Section 542A.003 requires detailed, comprehensive pre-suit notice that is intended to make the claims and litigation processes more transparent and potentially even prevent unnecessary lawsuits. Upon receiving notice, an insurer has the right to conduct an inspection and even make an offer to avoid litigation. When utilized properly, Section 542A should assist business consumers like the Plaintiff in avoiding protracted litigation over a clear claim.
In compliance with Section 542A.003, the Plaintiff gave its pre-suit notice to Hanover on April 1, 2021. The pre-suit notice provided a comprehensive outline of the Plaintiff’s claim and damages, quantified its loss, and even offered to waive a formal claim for attorneys’ fees if the contractual amounts were paid promptly. Hanover responded to the demand letter but denied any wrongdoing.
The Carrier Acted in Bad Faith
Our client cites numerous violations of the Texas Insurance Code, including:
- Failure to attempt to effectuate a prompt, fair, and equitable settlement of a claim with respect to which liability has become reasonably clear;
- Failure to adopt and implement reasonable standards for prompt investigation of claims arising under its policies ;
- Failure to promptly provide a reasonable explanation, in relation to the facts or applicable law, for the denial of a claim;
- Refusal to pay the claims without conducting a reasonable investigation with respect to the claims ;
- Misrepresentation of the insurance policies under which it affords property coverage to plaintiff, by making an untrue statement of material facts;
- Misrepresentation of the insurance policies under which it affords property coverage to plaintiff by failing to state a material fact that is necessary to make other statements made not misleading ;
- Misrepresentation of the insurance policies under which it affords property coverage to plaintiff by making a statement in such manner as to mislead a reasonably prudent person to a false conclusion of material facts and failing to disclose a matter required by law to be disclosed;
- Knowingly committing the foregoing acts, with actual knowledge of the falsity, unfairness, or deception of the foregoing acts and practices;
- Failure to acknowledge receipt of the claim;
- Failure to timely commence investigation of the claim or to request from Plaintiff any additional items, statements, or forms that the defendant reasonably believes to be required from Plaintiff ;
- Failure to notify Plaintiff in writing of the acceptance or rejection of the claim not later than the 15th business day after receipt of all items, statements and forms required by the Defendant; and
- Delayed payment of Plaintiff’s claim.
The Plaintiff additionally alleged Hanover breached its contract, breached its duty of good faith and fair dealing, acted fraudulently and with malice, and violated the Texas Deceptive Trade Practices Act (DTPA).
Texas Commercial Insurance Coverage Attorneys
If you are a commercial property owner and your insurance claim has been wrongfully denied or grossly underpaid, the Texas insurance coverage lawyers at Raizner Slania can help you get back on your feet. Contact our office today for a free consultation to review your situation.
