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Hurricane Ike insurance coverage on appeal to Texas Supreme Court

The Texas Supreme Court has heard arguments in a large bad faith insurance case.

Texans need and rely on solid insurance coverage to protect their homes and businesses in the face of severe weather, which in the Lone Star State can include hurricanes, tornados and more. The state has strong laws in place to protect property owners when insurers do not live up to their obligations under insurance policies.

In January 2015, the Texas Supreme Court heard oral argument in a lawsuit arising from insurance coverage denial stemming from Hurricane Ike damage to an ocean-side apartment complex in Galveston. Physical damage in the area from the storm was devastating, so the multi-million-dollar insurance claim at issue in JAW The Pointe, LLC, v. Lexington Insurance Co. is not surprising. According to the Harris County Flood Control District, the 2008 Category 2 hurricane was the third most costly hurricane in U.S. history, causing an estimated $15 billion in total insured losses.

The facts of the case and the details of the appeals are complex, but basically the jury found for the insured apartment owner to the tune of almost $4 million in compensatory (to reimburse) and punitive (to punish) damages in its claim for insurance coverage. The verdict was reversed on appeal and the apartment-owner plaintiff is now asking the Supreme Court to reinstate the original verdict in its favor.

When a Texas property owner, whether an individual or a business, finds itself squaring off with its insurance company over a claim it believes was not promptly and properly paid, it is smart for the insured party to immediately seek the advice of a seasoned Texas insurance attorney. Legal counsel can assess the claim in light of Texas insurance law, investigate the circumstances, provide advice about potential legal remedies and how to proceed against the insurer, and communicate with the insurance company on the insured's behalf. If necessary, an experienced insurance attorney can advise the insured party about potential legal claims and lawsuits.

In JAW The Pointe, LLC, the case currently before the Supreme Court, the property owner who suffered the loss sued its insurers alleging several legal remedies under Texas law, including asking the court for a declaratory judgment stating that the policy covers the losses, and:

  • Breach of contract
  • Violations of the Texas Deceptive Trade Practices Act, known as the DTPA, for allegedly misrepresenting the policy and unconscionable behavior
  • Bad faith actions by alleged refusal to pay after liability has become reasonably clear; delay; "grossly inadequate" settlement offers; malicious, fraudulent or grossly negligent claim processing; and more
  • Violations of the Texas Insurance Code, including alleged failure to provide prompt payment, misrepresentation, failure to settle in good faith, failure to reasonably explain the basis for denying the claims, delay, failure to reasonably investigate and more
  • And more

These types of legal remedies are available to Texans in insurance denial cases. Knowledgeable legal counsel can advise policyholders as to what remedies are appropriate to pursue in individual cases. With offices in San Antonio, the insurance attorneys at Kustoff & Phipps, L.L.P., represent claimants across the state in bad faith and other types of insurance disputes.

Keywords: Texas Supreme Court, bad faith, insurance, Hurricane Ike, appeal, coverage, apartment, Galveston, storm, JAW The Pointe, LLC, v. Lexington Insurance Co., property owner, claim, attorney, insurance company, insurer, breach of contract, DTPA, refusal to pay, liability, Texas Insurance Code

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