Tag: Hotel Claims

hurricane harvey insurance lawsuit

Raizner Slania Files Hurricane Harvey Insurance Lawsuit On Behalf Of Ingleside Hotel Owner

Raizner Slania has filed what appears to be the first Hurricane Harvey wind damage lawsuit within the federal court system. The plaintiff is an Ingleside, Texas hotel owner and the case was brought against Certain Underwriters at Lloyd’s London.

The affected property is a brand new hotel whose construction was completed in March 2017. The hotel consisted of three stories with a total of 72 individual hotel rooms. With an investment of over $6 million to construct the property, the Texas owner intended to own and operate the hotel for many years to come.

Surplus Lines Insurers in Texas

Underwriters at Lloyd’s London operate as the most prolific surplus lines commercial insurer in the State of Texas – by a sizeable margin. In 2017, all surplus lines insurers operating in Texas wrote a combined $5.5 billion in premiums. Of that, $1.5 billion was written by Underwriters at Lloyd’s London, with the next largest entity writing approximately $250 million in premiums.

Although Lloyd’s has a considerable presence in Texas, the company is actually only licensed to sell insurance in Illinois, Kentucky, and the U.S. Virgin Islands. In order to operate in Texas and other states, Lloyd’s operates as an unlicensed surplus lines insurer. Because it operates as a surplus lines insurer, Lloyd’s is not subject to traditional state regulations, such as those promulgated by the Texas Department of Insurance.

Surplus lines insurance companies are often absentee insurers with few or no employees in Texas. In many ways, they operate as a virtual file cabinet. Lloyd’s of London is comprised of various “syndicates” made up of investors or members that bear unlimited liability for the insurance risks Lloyd’s writes. The syndicate investors are often foreign insurance entities that lack any authority to operate in Texas. Effectively, they borrow Lloyd’s surplus lines authority to operate in this state, and in doing so, they are able to access the lucrative Texas insurance market without any direct licensure or regulation.

Five distinct investors, each of which is a foreign, unlicensed, non-admitted, ineligible entity, underwrote our client’s policy. Their only legal connection to writing insurance in this state comes from essentially piggybacking on Lloyd’s surplus lines eligibility – in other words, borrowing Lloyd’s license in order to operate in Texas.

None of these insurers are licensed to write insurance in Texas and none has a single employee in the entire state. None has complied with any Texas regulatory requirements, and each of these foreign entities is essentially borrowing Lloyd’s eligibility to write insurance in Texas, to the detriment of small business consumers like our client.

Hurricane Harvey and Wind Driven Rain Damage

Our client purchased a commercial insurance policy with Lloyd’s, which was underwritten by five foreign insurers. The policy coverage period was January 23, 2017 through January 20, 2018. On August 25, 2017, the property suffered catastrophic damage as Hurricane Harvey swept across the Texas coastline. Our client’s policy (like many other policies) includes coverage for damage resulting from a “storm created opening” but not from “wind driven rain” that enters the property without coming through a damaged part of the building envelope.

When a storm creates some type opening in a building, it also opens the building up to damage caused by rainfall. This type of damage is covered under most insurance policies. Wind driven rain refers to water damage that enters the property through an existing flaw. This type of damage is usually not covered under commercial insurance policies.

In wake of Hurricane Harvey, many insurers appear to be making the most of the distinction between coverage for “storm created openings” and “wind driven rain” as a loophole through which they would cram almost all of their coverage denials. And as the 800-pound gorilla in the Texas commercial insurance market, Underwriters at Lloyd’s London is leading this type of coverage avoidance and policy misinterpretation.

Our client’s hotel suffered substantial damage from Hurricane Harvey. Sizeable portions of the roof were ripped off by high winds, allowing rain to be driven through the building envelope. In addition, outdoor lights were sheared off their metal anchors and destroyed, signs were torn off their housings and tossed into heaps on the ground, windows were smashed, unsealed, and disengaged from their housings, the interior suffered significant water damage, and the building suffered substantial structural damage. Our client filed an insurance claim with Lloyd’s to cover the cost of repairs to the property

Because neither Lloyd’s nor the five foreign syndicates that comprise the underwriters on the policy have one single employee in Texas, they assigned Engle Martin Claims Administrative Services to handle the claim. Although Texas law provides that an insurer has a “non-delegable duty” to responsibly handle claims, delegating is precisely what foreign insurance entities like Lloyd’s do on a regular basis.

In response to the claim, Engle Martin assigned the claim to an adjuster. According to the Texas Department of Insurance, the adjuster is a Michigan resident who had been a licensed adjuster for a mere two months at the time he was assigned to review the property damage.

Typically, newly licensed or inexperienced adjusters are assigned smaller, residential losses in order to hone their skills and gain experience. But in this instance, Engle Martin assigned a newly minted adjuster to inspect a multi-million-dollar property that had sustained an extensive and complex loss potentially covered by all three coverage parts – building, contents, and business interruption. The adjuster was not up to the task of assessing this claim.

Although neither Lloyd’s nor Engle Martin has to date provided clear documentation of the inspection, the adjuster purportedly visited the property on August 31, 2017. According to Engle Martin, the adjuster observed “minor” damage to the building exterior, “minor” damage to “some shingles” on the roof, downed lights, signs, gutters, and fences. The adjuster also purportedly observed “significant” water damage to the interior of the building. However, according to Engle Martin, its adjuster did not observe “exterior storm related damage which would have allowed the observed interior water to enter into the affected areas.” It is unclear at this time whether Engle Martin and the adjuster prepared an estimate reflecting these outlandish findings because one was never provided to our client, as it should have been.

Additionally, Engle Martin engaged SEA, Limited and one of its engineers to further assess the property. Sticking with the party line, on September 20, 2017 SEA opined the interior water damage did not result from wind damage, but instead resulted from wind driven rain passing into the Package Terminal Air Conditioning (PTAC) units on the exterior walls. SEA further opined water entered the building through joints in the exterior finish or flaws in sealant.

In other words, despite clear photographic evidence of storm created openings in the building envelope – including the roof and stucco exterior – SEA assisted Engle Martin in its efforts to avoid making a claim payment by implicating the “wind driven rain” limitation to the policy’s wind coverage provision. As a result, Lloyd’s has denied paying our client’s insurance claim. To this day, Lloyd’s has refused to pay for any covered damages under the policy.

New Texas Insurance Code § 542A Demand Letter Ignored

Texas lawmakers passed House Bill 1774 into law effective September 1, 2017. The controversial new law contains a number of provisions purportedly designed to protect business consumers. One such provision is a pre-suit notice and demand requirement designed to encourage early resolution. The plaintiff complied with this new provision; but, Lloyd’s of London ignored the pre-suit demand and did not respond to it.

Lloyd’s Violated The Texas Insurance Code 

Our client alleges Lloyd’s violated numerous provisions of the Texas Insurance Code, including failure to effectuate a prompt, fair, and equitable settlement of a claim and failure to adopt and implement reasonable standards for the investigation of a claim. Our client also believes Lloyd’s misrepresented the policy under which it affords coverage. Additionally, our client believes Lloyd’s violated the Deceptive Trade Practices-Consumer Protection Act.

Fighting For Policyholders After Hurricane Harvey

After Hurricane Harvey, some unscrupulous insurance companies appear to be willing to do anything to avoid paying out claims. Because surplus lines insurers operate in a gray area of the market, many get away with ripping off policyholders. Raizner Slania LLP has a successful track record of standing up to some of the largest insurance companies in the world, including Lloyd’s of London, and winning. If your insurance company isn’t being straight with you regarding your Hurricane Harvey claim, we can help. Call us today for a free consultation to discuss your case.

Nueces County Wind Damage Lawyers

Raizner Slania Files Insurance Lawsuit On Behalf of Local Hotel Owner

Raizner Slania has filed a bad faith insurance lawsuit on behalf of a local hotel owner against AmRisc, LLC, Certain Underwriters of 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 Company, International Insurance Company of Hannover PLC, and Vericlaim, Inc.

March 2016 Windstorm

On March 25, 2016, a windstorm swept through Nueces County causing substantial damage to the exterior, windows, and interior of the property. Upon discovering the damage, the plaintiff filed an insurance claim under the policy with the carriers. The plaintiff asked that the cost of repairs be covered pursuant to the policy. The claim was assigned to AmRisc, which in turn assigned the claim to Vericlaim as a third party adjusting firm.

Vericlaim assigned the claim to an internal adjuster who was given decision-making authority over the claim. Verclaim and its internal adjuster conducted an unreasonable and inadequate investigation and denied any wind and water damage to the windows, exterior, or interior of the property.

The internal adjuster ignored or rejected facts, physical indicators, photos, and historical building reports confirming reasonably clear coverage for the windstorm and water damage to the property. Additionally, the internal adjuster assigned unqualified and biased consultants to the claim and failed to do his own investigation of the damages.

The carriers relied on Vericlaim and its internal adjuster’s incomplete investigation to make coverage decisions under the policy and determine what amounts, if any, to pay on the claim. The plaintiff was forced to hire its own representative and demand re-inspections and re-evaluations of the obvious damages to the property that the carriers ignored.

Violations of the Texas Insurance Code

Our clients cites numerous violations of the Texas Insurance Code, including failure to effectuate a prompt, fair, and equitable settlement of a claim and refusing to pay a claim without conducting a reasonable investigation. Our client also alleges the carriers violated the Deceptive Trade Practices-Consumer Protection Act (DTPA).

Nueces County Wind Damage Lawyers

If you pay your premium, you deserve coverage under your insurance policy. Many insurance companies are less than honest when paying out claims, but property owners can make sure they get their full coverage by calling the Nueces County wind damage lawyers at Raizner Slania LLP. Contact us today for a free consultation to discuss your case.

commercial wind damage

Hotel Owner Files Commercial Wind Damage Lawsuit

Our client, a local hotel owner, was forced to file a lawsuit against Underwriters at Lloyd’s London and Engle Martin & Associates after its commercial wind damage insurance claim was wrongfully denied under Texas law.

March 2016 Windstorm

On March 25th and 26th, 2016, a windstorm swept through Harris County, causing substantial damage to the roof, windows, exteriors, and interiors of the plaintiff’s property. After the storm, the plaintiff immediately filed an insurance claim to cover the damages to the property. In response to the claim, Lloyd’s assigned representatives, adjusters, consultants, and agents to the plaintiff’s claim that were inadequately and improperly trained. Specifically, Lloyd’s assigned the claim to Engle Martin, who in turn assigned it to an employee who was not equipped to handle this type of claim.

The employee failed to complete an adequate inspection and refused to acknowledge all the damages to the property. The employee also failed to prepare an estimate or scope of damages to the property and/or failed to provide the estimate to the plaintiff. To assess the damage, the employee retained consultants from a preferred vendor list who are not registered with the Texas Department of Insurance, and then utilized the preferred vendor’s report to make recommendations to Lloyd’s on what portions of the claim to deny under the Policy.

The plaintiff never received a formal denial letter from Lloyd’s or the Engle Martin employee. However, as a result of the employee’s haphazard inspection, misrepresentations, and inadequate investigation, Lloyd’s denied the plaintiff’s claim for wind damages by sending an engineering report stating there was no damage.

Lloyd’s 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 the investigation of a claim, and misrepresentation of the insurance policy under which it affords property coverage to the plaintiff.

Raizner Slania: Windstorm Damage Attorneys

If your insurance carrier wrongfully denied a Texas windstorm damage claim, you need an experienced team of insurance lawyers to help you get the compensation you deserve. Call the experienced windstorm damage claim attorneys at Raizner Slania today to schedule a free consultation to discuss your case. We can help you understand your legal options and pursue compensation on your behalf.