A storm hit Houston, Texas on August 16, 2013, which creased extensive hail and windstorms in the area. One building that suffered significant damage was a Baptist Church. After the insured filed a valid claim for windstorm damage under its property insurance, it was unable to recover what it was due. Due to this failure to timely and appropriately pay the insurance claim, the church has filed suit against Underwriters at Lloyd’s London, Gulf Coast Adjustment Service of Houston, Inc. and its adjusters in Harris County District Court.
The church was badly damaged by hail, including its roof, HVAC, windows, exterior, interior, ceilings, furnishings, and more. After the storm, the church filed a claim under its policy with Underwriters, asking the insurer to cover all damages caused by the storm.
Foreign Surplus Lines Insurance Companies Not Admitted In Texas
Underwriters assigned adjusters, consultants, and agents to the claim that were inadequate and improperly trained to handle this type of property damage claim. Specifically of concern, Underwriters is a foreign surplus lines insurance company that is not admitted in Texas. It assigned Gulf Coast Claims, a Houston insurance adjusting company that falsely advertises itself under the Underwriters name. Gulf Coast Claims then assigned an unqualified adjuster in Florida to assess the Texas church’s damage. The adjuster failed to perform an adequate property investigation, failed to prepare estimates of the wind damage, and ultimately represented that the church had no damage.
Given the failures by Underwriters, Gulf Coast, and their adjuster, the church’s claims were denied, and it was forced to hire its own consultants and representatives to conduct its own assessment of property damages. During this long delay, the church has suffered economically and the structure has had continued physical damage.
As a surplus lines insurer, Underwriters at Lloyds are unregulated by the Texas Department of Insurance and operates with far fewer restrictions than insurers who are compliant with the rules for admitted carriers. In fact, Lloyds writes more commercial insurance premiums than any other insurer in Texas, and alone accounts for nearly one-quarter of all surplus lines insurance premiums written in Texas through 2015.
In its petition, the church alleges various violations of the Texas Insurance Code by all three defendants. It also alleges that the defendants failed to properly explain why they had denied the claim and that they failed to conduct a reasonable investigation into the property damage.
Bad Faith Wind Insurance Denial Claims
The church also alleges breach of contract and bad faith on the parts of all defendants. They also allege significant violations of the Deceptive Trade Practices-Consumer Protection Act (DTPA), and Texas fraud laws. The complaint seeks to recover more than $1 million in damages, as well as interest and attorneys’ fees, in addition to punitive damages for bad faith.