Often, insurance companies try to escape their responsibility to paying customers by using fine print, delay tactics, and vague contracts. Recently, one condominium association managed to defeat the deceitful attempts of its insurer to escape paying a claim after Hurricane Harvey.
As Hurricane Harvey dropped more than 60 inches of rain on the Houston area, authorities opened Lake Conroe Dam’s floodgates. The flow of water that escaped from the dam was comparable to the Niagra Falls. As the water escaped and swirled into nearby areas, it amassed a pile of debris—including fallen trees, unmoored boats, and other objects—that it slammed into boat dock slips owned by the Playa Vista Conroe condominium association.
After the damage, the association filed a claim with Insurance Company of the West (ICW) for $208,177.44 for repairs. However, the insurer denied the claim and stated that hurricane damage was not covered by its policy.
Earlier this month, the insurance company was ordered by the Fifth Circuit Court of Appeals to pay $190,827.50 for the damages.
Why Was ICW Ordered to Pay for Hurricane Damages?
Often, insurance companies try to escape covering storm damage by including caveats in contracts that are purposefully broad. For insurance companies, this broadness is designed to allow them to twist definitions and get out of paying out claims.
For example, after Hurricane Harvey winds ripped roofs off homes and allowed rain to enter them, insurance companies tried to avoid paying claims because they asserted that the damage was caused by flood water rather than wind.
In the case of the Playa Vista Conroe insurance policy, ICW cited three exclusions that absolved it from paying out the claim. Each of the three judges in the Circuit Court of Appeals agreed that these exclusions did not apply. For one of its exclusions, ICW went as far as to argue that it was absolved from paying out the claim because it intentionally uses vague language in contracts. The insurer asserted that this lifted its responsibility to prove they didn’t have to cover damages to the docks.
The court eventually ruled in favor of the condominium association after it asserted that the docks survived Harvey and were damaged because of the dam’s water release.
Then, in a desperate attempt to fix its legal mistakes, ICW tried to file a “legal gotcha” stating that the condominium association admitted that the docks were damaged because of governmental action, a stipulation it argued absolved them once from paying the claim once again.
Circuit Judge Andrew S. Oldham reprimanded ICW’s lawyers for their “absurd” effort to cover up legal mistakes.
“That is far too little too late,” the opinion reads. “If ICW wanted to rely on the governmental-body exclusion, it was obligated to raise it (at the latest) at summary judgment.”
Now, years after Hurricane Harvey, the condominium association will finally receive the insurance coverage it paid premiums for. This case, like many others, has shown that insurance companies can’t escape their responsibility to pay claimants if held accountable in court.
If your insurance company isn’t being honest after Hurricane Harvey, call our insurance claim lawyers now at (888) 400-2101 for a free consultation.