The Super Storm known as Sandy will go down in history as a wake-up call to fix our broken system of consumer insurance protection. Sandy brought to the forefront the fact that insurance companies are out almost exclusively to strike a good profit, and not to provide a meaningful, quality service to the consuming public. In Texas and throughout the country, there are daily examples that illustrate this fact -- bad faith insurance tactics are not rare and unusual, but are instead a modus operandi that many insurers employ wherever the opportunity arises.
A couple in another state is suing an insurance company for insurance bad faith in the denial of their claim for house damages from Sandy. After the storm, the couple filed a claim with the company. The couple claims that the adjuster for the insurer recognized on his first visit that the storm damage had to be promptly repaired in order for the couple to live safely on the premises.
The couple alleges in the suit filed in a West Virginia Court that the adjuster was aware also that extensive snow had caused an unstable condition in the wall and roof that had been damaged initially by the storm. The company said they were sending a structural engineer to examine the damage prior to being able to approve any work. About a month later, in Dec. 2012 the company denied the claim by saying that the damage was not caused by the storm, rather it was caused by sub-standard construction.
The company, West Virginia Insurance Company, didn't have a provision in their policy that allowed them to deny a claim for the reason stated. The lawsuit alleges bad faith insurance by intentionally denying a claim that the company knew was perfectly legitimate. The company is accused of also breaching its contract of insurance.
The cases dealing with Sandy are of course in other states. However, we in Texas get our fair share of similarly unfair, bad faith insurance actions by insurance companies on a regular basis. The shocking aspect of current insurance practices shows a virtually universal attempt to short-count the value of claims on a regular basis and to deny legitimate claims wherever it appears possible to do it..
Source: West Virginia Record, "Nicholas County couple sue over Super Storm Sandy claim denial," Kyla Asbury, May 31, 2013