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The National Law Journal: 

It's been one year since Hurricane Ike blew in, but many Gulf Coast homeowners are still struggling from the fallout.

And it's not heavy winds, but insurance companies, that have them reeling.

One Texas trial attorney said hundreds of lawsuits remain pending against insurance carriers that have denied or underpaid claims for Hurricane Ike victims. He has more than 150 such lawsuits himself - another colleague has more than 1,000.

Adding to the troubles of Texas homeowners is a new rule issued by the Texas Department of Insurance that requires some property owners in coastal communities to prove they have flood insurance first before they can buy or renew state-backed windstorm policies.

The rule, which took affect on Sept. 1, applies to property that is being built or remodeled after Sept. 1. It does not apply to property being repaired due to damage caused by Hurricane Ike or by Hurricane Dolly, which hit Southern Texas in July 2008.

Still, lawyers note, homeowners already reeling from Ike and Dolly damage will now have to pay even more for insurance in the future, and will not be able to get wind protection without flood coverage, too.

The rule, which was prompted by legislation passed this year, specifically applies to property owners in flood-prone areas who are seeking windstorm coverage through the Texas Windstorm Insurance Association, the state-run insurer of last resort established for coastal counties. It is part of a bill lawmakers passed last session after learning that a vast number of property owners didn't have flood insurance when Ike struck. The association ended up getting hit with most of the claims, so lawmakers wanted to make sure that the state-run insurer didn't get stuck paying for damage that could have been caused by water, not wind.

Meanwhile, it's not just Hurricane Ike victims who are battling it out with insurers. Georgia hailstorm victims are also in a war with insurance companies, said plaintiffs' attorney Phillip Sanov, who heads the bad-faith insurance practice group at Houston's Lanier Law Firm.

Sanov, who has many Hurricane Ike lawsuits back home in Texas, was in Georgia this week, interviewing dozens of hailstorm victims seeking legal help in resolving insurance claim disputes stemming from spring hailstorms that damaged their roofs.

"This was my first trip, and we've got 84 [homeowners] that want us to represent them," Sanov said, noting he's been equally busy fielding calls from Texas storm victims. "We have got hundreds of files and we're getting contacted by dozens each week."

In both states, the homeowners are experiencing similar troubles, said Sanov. Adjusters are reviewing the roof damage of people's homes, he said, and coming up with low figures. "The policy holder then tries to get the roof fixed, and all the contractors are saying, 'nobody can fix a roof for that,' " Sanov said.

Meanwhile, Sanov remains optimistic that legal action will help. "We're hopeful that just like in most places, once a lawyer gets involved, the carrier will start doing closer to the right thing by their policy holder," Sanov said.

A few insurance companies, meanwhile, denied the charges that they're not fulfilling their obligations to Hurricane Ike victims.

"I can assure you that we investigate each claim individually. And our goal is to pay what we owe. Nothing less and nothing more," said Jim Oliver, the general manager of the Texas Windstorm Insurance Association, which is facing numerous lawsuits from Hurricane Ike victims.

Oliver couldn't comment on the pending litigation, but said the company, which has more than 102,000 claims stemming from Hurricanes Ike and Dolly, is working "to investigate each claim individually and pay what we owe under each policy."

Officials with Farmers Insurance made similar assurances. "There's obviously a lot of stress when someone loses their home, but Farmers is working in every way on this. We're working with our policy holders as fast as we can to resolve all the issues," said Farmer's spokesperson Jerry Davies, who also defended the work of Farmer's adjusters.

"I think we have the best claims adjusters and I think we have the best responses to disasters in the country....They go in and they don't leave until every claim is taken care of."

http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202434092923&Hundreds_of_Hurricane_Ikerelated_suits_remain_pending_against_insurers

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