Raizner Law has filed a bad faith insurance lawsuit on behalf of a Harris County, Texas commercial property owner against Underwriters at Lloyd’s, London after its Hurricane Harvey damage insurance claim was wrongfully denied.
Our client owns a one-story building situated on 21,875 square feet of land with 13,261 square feet of interior space. The building houses several separate businesses. On August 25, 2017, Hurricane Harvey came ashore along the Texas coastline as a Category 4 hurricane. As a result of Hurricane Harvey’s extreme winds and rain, large portions of the property’s roof were damaged. Because the roof was compromised, there was also damage to the interiors, ceilings, walls, and flooring of the property.
Immediately after the storm, the plaintiff filed an insurance claim with Lloyd’s, asking that the cost of repairs be covered pursuant to the policy. Although Texas law provides an insurer has a “non-delegable duty” to responsibly handle claims, Lloyd’s does not have a single employee in Texas so they delegated the claim to a third party administrator.
The third party administrator’s adjustment was disorganized, rife with delays, and left many of the insured’s questions unanswered. The plaintiff hired its own representative to assist with the claims process, but adjusters continuously ignored the plaintiff’s representative in an effort to intentionally mislead the insured about the claims process and ultimately deny the claim.
The third party administrator, its adjusters, and Lloyd’s refused to provide any scopes of damage or answer any questions about the status of the claim, despite the plaintiff’s multiple requests. Additionally, they failed to complete an adequate inspection and refused to acknowledge all the damages to the property. In the denial letter, the third party administrator and Lloyd’s stated the “only portion” of the property damaged by Harvey was a small section of the porch, which fell below the policy’s deductible. While they did acknowledge “extensive water damage” at the property, the companies stated the water damage was a result of “improper roof drainage, age-related deterioration to the roof covering and metal decking and deferred maintenance,” which while boilerplate exclusions under the policy, were not supported by any relevant facts or data.
Lloyd’s Violated The Texas Insurance Code
Lloyd’s violated numerous sections of the Texas Insurance Code, including failure to effectuate a prompt, fair, and equitable settlement of a claim, refusal to pay a claim without conducting a reasonable investigation, and misrepresenting the policy under which it affords property coverage to the plaintiff.