Hurricane Harvey Flooding Continues to Muddy the Waters

As Texas continues to rebuild in the aftermath of Hurricane Harvey, the extent of the damage Harvey left in its wake is just now being realized. To date, private insurers have seen more than 670,000 property insurance claims resulting from Harvey.[1] The Texas Department of Insurance reports that insurers have paid out more than $4.5 billion in Harvey claims, with the expected number projected to increase to $15.7 billion by the time all claims are reported and settled.[2] Of these claims, more than 354,000 are residential property claims, and around 37,000 are commercial property.[3]

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Houston’s Floodpains (ahem, Floodplains)

When Hurricane Harvey headed for Houston, Texans braced for an expected large amount of rain and heavy winds. What they did not expect was the catastrophic flooding that took place in the city.

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In Texas, A Power of Attorney is No Alternative to An Assignment of Benefits

Following a catastrophic event (such as a hurricane, tornado, or earthquake), insureds sometimes will not have the resources up front to make the repairs to their property.  In many states, an insured can hire a contractor to perform the work in exchange for a post-loss assignment of benefits (AOB) whereby the insured assigns their rights in their insurance claim to the contractor making the repairs.  From there, the contractor, not the insured, pursues payment of the claim from the insurer.

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Zelle LLP to Host “2018 Texas Hail and Harvey Claims/Litigation Seminar”

On Thursday, May 3, 2018, the Dallas office of Zelle LLP will host an all-day seminar at the Hyatt Regency Reunion titled “2018 Texas Hail and Harvey Claims/Litigation Seminar.” The seminar will bring together insurance industry professionals to share information and knowledge concerning Texas Hail and Hurricane Harvey claims and litigation. The seminar has been held every other year since 2012. Over 500 attendees are expected.

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Pardon this interruption… Service Interruption Provisions and Hurricanes

As the urgency to repair immediate physical damage to commercial property subsides, and businesses begin to get back to business as normal in the wake of Hurricanes Harvey, Irma, and Maria, we will undoubtedly see claims to recover lost revenue, or extra expenses incurred as a result of the storm.  These claims arise under a general claim for business interruption coverage. 

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When a Business Entrance is Blocked: Ingress/Egress Coverage in the Wake of Hurricane Harvey and Irma

As businesses and insurers recover from the devastation of Hurricane Harvey and Hurricane Irma, it may take time to fully assess the effects of these storms on a business’s bottom line. Invariably, however, the scale of these natural disasters likely provides some immediate impact on insureds’ businesses – the ability to access the premises may be barred or impacted. 

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Claims Stemming from Government Regulated Flooding After Hurricane Harvey

In August, Hurricane Harvey directly hit the city of Houston, leaving substantial wind and flood damage in its wake. Many home and business owners who avoided flood damage breathed a sigh of relief on August 28 when the immediate threat of flooding seemed to have passed. But for those Houstonians along the Buffalo Bayou, the worst of the damage was yet to come. In order to avoid flooding downtown Houston, the U.S. Army Corps of Engineers ordered “controlled releases” of both the Addicks and Barker Dams, thereby alternatively flooding thousands of homes and businesses that would have otherwise been spared. Now the owners of those homes and businesses are looking for a way to recoup their damages. 

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Civil Authority Coverage in the Wake of Harvey and Irma

As the category 4 Hurricane Harvey approached the Texas Gulf Coast, many areas evacuated in preparation for the storm. And in the wake of the hurricane and the widespread flooding that followed, additional evacuations and curfews followed.

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Post-Irma Contingent Business Interruption (CBI) Claims

After Hurricane Harvey slammed into southeast Texas on August 25, 2017, our colleague Shannon O’Malley posted about the contingent business interruption (CBI) claims that would inevitably follow due to damage suffered by refining, chemical, and petrochemical facilities that supply critical products to manufacturers and other businesses across the country and around the world. (See “Contingent BI: Why Do I have a Hurricane Harvey Claim from Hoboken?”)

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Will Reinsurers Sustain a Direct Hit From Hurricane Harvey?

While predictions and analyses abound regarding the potential hit from Hurricane Harvey direct insurers may take, the potential impact to reinsurers has received considerably less attention. In the aftermath of this historic storm, some are beginning to ask, “will Harvey hit reinsurers where it hurts?” The answer is: “it depends.” For some reinsurers, including the reinsurers of the National Flood Insurance Program (NFIP) and reinsurers with exposure to auto risks, the storm is all but certain to deal a significant blow. For others, however, Harvey may not pack the same punch. Uninsured flood losses and/or high attachment points may shield many reinsurers from the worst of it. For those reinsurers that are exposed, the way in which ceding carriers aggregate their claims could be crucial to determining the overall reinsurance exposure.

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Why Do I Have A Hurricane Harvey Claim From Hoboken?

As businesses and insurers sort out the impacts of Hurricane Harvey, it will take time to assess the physical damage and resulting business interruption losses. Invariably, however, business interruption impacts from Harvey will not just be felt along the Texas Gulf Coast. Texas’ significant refining, chemical and petrochemical facilities supply critical products to businesses throughout the U.S. and abroad (and to each other). To the extent that those supplies are disrupted, businesses located far from the Lone Star State may choose to assert contingent business interruption (“CBI”) claims under their own first-party property policies.

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Concurrent Causation and Texas Law (Re-Post from August 31)

Hurricane Harvey initially hit the Texas Gulf Coast with damaging winds and storm surge. As it downgraded to a Tropical Storm, Harvey dumped the highest amount of rainfall on the Houston area ever recorded from a single storm, resulting in record flooding. In analyzing Harvey claims under a property insurance policy, standard residential policies exclude flood, and most commercial policies either exclude or sub-limit flood damage.

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HB1774 - Insurers May Elect to Adopt Adjusters’ Liability

The applicability of Texas House Bill 1774 to Hurricane Harvey claims has been a hot topic in the press and on social media. This legislation, which became effective on September 1st, will apply to all Hurricane Harvey lawsuits filed on or after that date. It will also apply to all hail and windstorm lawsuits filed after September 1st. The legislation changes nothing with respect to the work of adjusters handling Texas insurance claims. As always, adjusters should continue to adjust Hurricane Harvey claims promptly, fairly, and consistent with policy terms.

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First Harvey Lawsuit Filed to Beat New Texas Law

Late Thursday afternoon, a Dallas law firm filed a lawsuit to circumvent a new law that went into effect on Friday, September 1. The newly passed law, HB1774, was meant to curb hail lawsuit abuse, but after Hurricane Harvey some industry representatives raised concerns that plaintiff attorneys might use the tropical storm as a way to overwhelm carriers with damage claims.

In the complaint, Sunbelt Trees, LLC v. EMC Insurance Companies and Employers Mutual Casualty Company, the plaintiff alleges damage ranging between $200,000-$1,000,000 and loss of use of its tree farm due to Hurricane Harvey and states that while a claim was filed with the defendants, no payment had been made as of the date the lawsuit was filed. In addition, the plaintiff seeks pre-judgment interest, punitive damages and attorneys’ fees.

According to Steven Badger, a partner with Zelle LLP’s Dallas office, there is absolutely no reason that a Hurricane Harvey lawsuit should have been filed prior to September 1st. “The insurance company hasn’t even adjusted the claim yet,” said Badger. “How could it have breached the insurance policy? How could it have violated the Insurance Code or DTPA? Obviously, it hasn’t.”

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Texas Department of Insurance Declares Harvey a Catastrophe

As anticipated, on Friday, September 1^st the Texas Department of Insurance issued an order declaring Harvey a catastrophe, thereby extending claims handling deadlines under §542.059 of the Texas Insurance Code. Our simple reference chart reflects the extended deadlines. Click the highlighted link above to access it.

A copy of the TDI’s order can be found here.

Concurrent Causation in Louisiana: The Basics

• Anticipated damage from Hurricane Harvey is expected result from wind, wind-driven-rain, and flood. Under most policies, damage caused exclusively by wind or wind-driven rain is recoverable, but damage caused exclusively by flood is excluded or sub-limited. Where possible, Louisiana courts apportion between wind damage and flood damage.

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Summary of Texas First-Party Claims Handling Deadlines for Hurricane Harvey Claims

The Texas Insurance Code provides various claims handling deadlines for both admitted and surplus lines insurance carriers. These deadlines have been accumulated in a simple reference chart. It is important for insurance companies and their adjusters to comply with these deadlines to ensure the prompt adjustment and payment of claims and avoid any statutory penalties.

The Texas Supreme Court’s Harvey Orders do not Delay the September 1 Effective Date for HB1774 (Section 542A of the Texas Insurance Code)

We have issued several posts and comments regarding misinformation that has been distributed concerning HB1774 and the new Texas Insurance Code provisions that go into effect on September 1^st. Unfortunately, more misinformation is starting to surface — the idea that the recent Texas Supreme Court orders extending statutes of limitations and “deadlines and procedures” due to Harvey serve to delay implementation of the new law. They do not. 

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Concurrent Causation and Texas Law

Hurricane Harvey initially hit the Texas Gulf Coast with damaging winds and storm surge. As it downgraded to a Tropical Storm, Harvey dumped the highest amount of rainfall on the Houston area ever recorded from a single storm, resulting in record flooding. In analyzing Harvey claims under a property insurance policy, standard residential policies exclude flood, and most commercial policies either exclude or sub-limit flood damage.

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Quick Harvey Claims Offer Little Payoff For Policyholders

While some Texas lawyers are encouraging property owners to quickly lodge claims for Hurricane Harvey damage before a new state property insurance law takes effect on Friday, the reality is that the potential downsides of the legislation — including a lower interest rate on successful lawsuits against insurers — don't warrant such swift filings, several attorneys, including Steven Badger of Zelle LLP, told Law360. 

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