By Leah Faye Cooper
Every month, we write checks to insurance companies “just in case” – just in case we get in a car accident on the way to work, or set the house ablaze while frying the Thanksgiving turkey. And though some of us amped up our insurance policies after Hurricane Katrina, the thought of ever really needing our insurance wasn’t we lost sleep over. Fast forward to post Hurricane Ike, and losing sleep is the least of our worries – it’s the loss of roofs, cars and other possessions that have us troubled. But thankfully, we’re covered. Here’s where those monthly payments come to our rescue, right? Not necessarily. For many of us, recovering what we lost in the storm is less promising than PETA hosting a dinner at Vic&Anthonys. We thought we could turn to our insurance agency; instead, we’re turning to the law.
“A lot of companies are trying to avoid responsibility and aren’t honoring the terms of their policies,” Houston attorney Michael Josephson says. “They’re shortchanging customers left and right when it comes to paying for house repairs or compensating them for lost or damaged personal property. Lawyers see this on a regular basis, but it’s not something the everyday homeowner thinks about until it affects them.”
The Texas Windstorm Insurance Association (TWIA), the state’s insurer of last resort, has been a go-to group for homeowners who can’t find adequate coverage elsewhere. However, shortly after Ike hit, TWIA announced they wouldn’t pay for storm surge damage; they consider surges floods. Most insurance companies follow similar policies, leaving homeowners waist deep in distress.
“People assume they just have to make a claim and they’ll automatically get their money, but that’s rarely the case,” Josephson says. Flooding is extremely damaging and rarely covered by insurance policies.
All insurance companies must abide by the Texas Insurance Code, a set of guidelines that help ensure fair insurance practices. Though many individuals try to pursue their claim alone, it’s advisable to hire a lawyer at the first sign of wrongdoing on behalf of an insurance company. The sooner you get legal advice under the Insurance Code, the better chance you have of getting fair and faster treatment from your insurer. Lawyers who specialize in settling insurance claims are well versed in the code and will likely recognize infractions you’re unaware of.
An insurance company should take legal action very seriously and in some instances, will present your case to multiple claims adjusters hoping to resolve the issue without going to court.
According to State Farm spokesperson Kevin Davis, the insurance company has handled over 102,000 claims from Hurricane Ike and paid out over $900 million to date. “Every claim is different so some require more attention than others,” Davis says, “but our goal is always to help our policyholders recover their losses – especially after something like Hurricane Ike. The Texas Department of Insurance tracks policyholders’ complaints and deems whether or not they’re justified. Of the thousands of complaints against State Farm, only 37 have been labeled justified and the company has extensively addressed each one.
Conversely, some companies often have a vested interest in dragging out the process, even if they know they’ll eventually have to pay a claim.
“They’ll postpone making payments for as long as possible because they lose money when they have to answer these claims,” Josephson says. “The longer it takes to resolve the dispute, the more time they have to come up with the money they owe.” In addition, some companies anticipate individuals will become increasingly frustrated and simply give up.
While there are many situations when a lawyer can help strengthen your claim, in some instances, insurance companies are well within their rights to refuse it, or compensate you for less than you anticipated. Homeowners should also be aware of rising deductibles. After filing claims for damage accrued from Ike, many homeowners were shocked to find that unbeknownst them, their deductibles had recently increased. Still, there is no harm in contacting a lawyer. If your agent didn’t sell you the right insurance or evaluate your needs and risks properly, they may be liable for covering part or all of your losses. “There are times when people will go to a lawyer with a claim that isn’t covered by their policy, but they can usually get some assistance, whether it’s guidance through the claims process, or closure to months of battling with an insurance company.”