In this January weekly insurance claim update, we look at a few recent events that could impact the insurance market - both regionally in the Texas area as well as nationally.
A Texas Supreme Court decision has raised the issue of driver policy settlements and loss of profits. A tow truck was hit by another car and was considered totaled by the insurance company. The tow truck company received a settlement equal to the maximum of the driver's policy that was at fault. The company then sought additional funds through their own insurance company for loss-of-profits during the time when their tow truck was out of service.
According to the Insurance Journal, Texas law does not allow for any additional profit-loss damages (after other damages have been received - even if a vehicle or other property is destroyed). That being said, the court in question disagreed with the assumption concerning Texas law and required additional loss of profit damages to be awarded.
An important aspect of this case in terms of future insurance claims is that "the Texas Supreme Court recognized that appeals courts in Texas have not been consistent in their opinions on whether loss-of-use damages are permitted in total destruction cases." This neither sets nor negates a precedent for this additional insurance litigation.
Collosal Winter Storm
The East Coast is wading through a storm aftermath that is reminiscent of Hurricane Sandy. The blizzard, so large it was reportedly seen from the International Space Station, moved its way last weekend through the Northeast coastline combined its massive winds with the high tide and resulted in tidal flooding that saturated much of New Jersey. Residents who are dealing with filing insurance claims as they begin their clean up efforts. Those who had previously filed claims after Sandy wreaked havoc and flooded the area in 2012, are finding out that in order to file their new flood insurance claim, they will have to be able to prove that the repairs on damages claimed in the previous storm were made and paid for. The National Flood Insurance Program will only pay for a second round of damages claims after residents prove that prior damages have been repaired.
Damage reports and subsequent payouts from the Gulf Coast to New England are expected to cause extreme losses for insurance companies in the Northeast. Due to the snowy conditions, damage cannot be immediately assessed. And additionally, snow has caused water to rise near the coast and cause flooding - creating additional problems and potential for insurance hikes as water damage claims are expected to rise.
Claims could be slowed but then extended over the next few months - well past the cleanup of the storms. Heavy snow buildup on roofs can slowly develop cracks and leaks, creating potential claims.
The Butte and Valley Fires in California during 2015 have cost insurance damages of $1 billion as it consumed over 150,000 acres in Northern California. “The Valley and Butte fires were sober reminders of the dangers residents can face in rural areas of the state,” Insurance Commissioner Dave Jones says, “A year-round fire season is California's new reality." Though the Federal Emergency Management Agency reported that $128 million dollars of federal and state funds were distributed to those affected by the two fires, insurance claims are still being filed.
To date, approximately $500 million dollars has been paid out in 5,600 claims which have been filed. Insurers say that they expect to pay out an additional $500 million once claims are all received and paid. Most claims are believed to be filed, but estimates of damage could be adjusted if that turns out not to be the case. California Insurance Commissioner Jones reports the insurance industry continues to be solvent and that the department is monitoring claims in an effort to assure prompt payments in hopes of rapid recovery.
If you need help getting your claims paid, contact us at The Voss Law Firm, P.C. We help policyholders around the world get the help they need and the money they deserve.