Raizner Slania LLP has filed an insurance lawsuit on behalf of a Nueces County hotel owner (Plaintiff) against Mt. Hawley Insurance Company (Mt. Hawley) and RenaissanceRe Syndicate 1485 Lloyd’s (Lloyd’s) (collectively Carriers or Defendants). The lawsuit was necessary due to the unreasonable denial of the Plaintiff’s commercial property windstorm damage claim.
Hurricane Hanna Causes Significant Damage to the Hotel
On or around July 25-26, 2020, Hurricane Hanna’s extreme winds and rain hit Nueces County, Texas. The property was substantially damaged as a result. Sizeable portions of the property’s roof and insulation were compromised by wind, resulting in interior damage to ceilings, windows, and the HVAC system. Despite the devastating physical damage, the Plaintiff felt fortunate to be protected by their $16 million in insurance coverage it had obtained to insure against this type of catastrophe. Immediately after the storm, the Plaintiff promptly filed a claim with the carriers, alerting them to the extensive damages.
The Carriers claims-handling process, however, resulted in a wrongful denial that omitted a wealth of facts, physical evidence, obvious wind damage, and meteorological data from Hurricane Hanna that supports the Plaintiff’s claim. The Carriers unreasonably pinned the loss on anything but the wind – an action designed to save the Carriers hundreds of thousands of dollars in claims payments to the policyholder.
The carriers assigned an adjuster from Engle Martin & Associates to assess the claim. The adjuster was unqualified, incapable of adequately assessing the damages to the property, and the source of many delays throughout the claims process. After utilizing preferred engineers of Teal Forensics to inspect the property, the Carriers and the adjuster continued to delay the resolution of the claim. The engineers concluded the damage was due to anything but the result of the hurricane. The Carriers relied upon their opinions for its coverage decision, as stated by the Carriers’ representative in a letter to the Plaintiff.
Despite clear evidence of covered damage, the Carriers engaged in and ratified this improper claim conduct and ultimately declined to issue a full payment. To this day, due to the Carriers outcome-oriented, inadequate, and haphazard investigation, the Defendants have 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 the Defendants on August 30, 2021. The pre-suit notice provided a comprehensive outline of the policyholder’s claims and damages, quantified its loss, and even offered to waive a formal claim for attorneys’ fees if the contractual amounts were paid promptly. The Defendants responded to the demand letter on October 28, 2021 but refused to acknowledge any wrongdoing.
The Carriers 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 provide promptly a reasonable explanation, in relation to the facts or applicable law, for the denial of a claim
- Refusal to pay the claim without conducting a reasonable investigation with respect to the claim
- 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 the defendants reasonably believe 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 Defendants
- Delayed payment of Plaintiff’s claim
The Plaintiff additionally alleged Carrier’s 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 Hurricane Hanna Property Damage Attorneys
If you are a commercial property owner and your Hurricane Hanna insurance claim has been wrongfully denied or grossly underpaid, the Gulf Coast Insurance Coverage Lawyers at Raizner Slania can help you get back on your feet. Contact us today for a free consultation to review your case.