A wickedly powerful storm hit Texas overnight on February 22 with damaging heavy rain, hail, thunder and lightning. Local police and firefighters were busy and many residents spent the night with no sleep. The worst part of the storm hit between 1:30AM and 3:00AM. The hailstorms hit San Antonio – will insurers hit damaged insureds?
School was cancelled Tuesday in two districts near San Antonio due to storm-damaged buildings. According to Superintendent Kevin Newsom, three of the buildings in the Brackett Independent School District suffered roof damage and at least 100 windows were broken by hail. Mr. Newsom said, “It knocked (out) a lot of our windows in our schools and offices and our classrooms. It also damaged our buses. We have windows out of buses and everything. So we weren’t even capable to run our routes this morning because we have a lot of damage to our vehicles. We have some of our school vehicles that don’t even have windows left in them.”
The aftermath of the storm also kept schools in the San Felipe Del Rio Consolidated ISD closed on Tuesday.
It wasn’t just schools that bore the brunt of Mother Nature’s wrath last night. Power lines were snapped, roofs damaged and more hail damage occurred in the Lake Ridge Ranch and Rancho Alta Vista subdivisions.
Those in Del Rio may have been the most surprised, however. The hailstorm roared into town around 10:00PM Monday, bringing with it strong damaging winds. The town was covered in ice by the time the storm passed.
The high winds and heavy ice knocked out electricity for many residents and utility crews were still working to restore power at 6:30 this morning.
One resident, Eric Cavanagh, said, “This is not common for Del Rio, so for us to see something like this is kind of significant. You never underestimate the power of mother nature and what she’s capable of doing.”
It wasn’t just power outages and broken windows, though. Roof damage at an apartment in the Park West complex brought San Antonio firefighters to the rescue. Resident Maurice Lee woke around 1:30AM to find his air mattress floating and water coming in from the ceiling. Mr. Lee said, “It was just running down like a water fall. I had to get a pot, a bowl. I had to get something to catch the water because if I didn’t, it would’ve gotten worse.” Apparently, the apartment above Mr. Lee’s had flooded, causing a deluge in his ground-floor unit. Fortunately, he was able to move most of the water out of his apartment with a mop.
Firefighters were not just busy rescuing floating residents. There were two house fires in other parts of the city. Lightning is the suspected cause of both. One happened just after 2:00AM and the other, beginning in the attic, occurred just before 3:00AM.
None of us ever wants to experience such disasters, but at least we can turn to our insurance companies in such events, right? Guess again.
First Party Claims
Typically, homeowners – and even renters – must have their homes insured. Even when not a legal requirement, it’s still a good idea; without insurance, such catastrophic events could ruin lives. Depending on your geographic location, you may even need – or want – to buy special insurance. For example, those who live on active fault lines may have earthquake insurance, while those on the Gulf and East Coasts may have hurricane insurance.
It’s fair to say that, unless you sell insurance or are an insurance attorney, it is one confusing issue. Most of us choose the coverage we can afford, sign on the dotted line, pay our premiums and expect that, should anything bad happen, we’ll get a check to help us rebuild. There’s obviously more to it than that and I’m going to tell you a bit more about how it really works.
First, some terminology: you may hear “first party” or “third party” bandied about in insurance discussions. What does that mean, though? Insurance is a contractual obligation. You, the insured, pay premiums for coverage; you are known as the “first party.” Technically, the insurance company is the “second party,” but for reasons as mysterious as putting a gym next to a fast-food restaurant (my gym is next to McDonald’s), the insurance company is hardly ever called the “second party.” Rather, it’s just called the insurer or the insurance company.
As for “third party,” I won’t go into that too much in this post as it’s not really important to what happened in San Antonio last night. Basically, the “third party” is someone not involved with the policy: neither the insured, nor the insurance company.
When something happens, such as a major hailstorm, and damages are incurred, homeowners typically file what is called a “first party claim.” This is a claim against the policy for property damage and must be paid by the insurance company directly to the insured, the first party. Of course, this is true if the policy actually covers the type of damage incurred. In the case of a homeowner living on an active fault line, if said homeowner didn’t have earthquake insurance and his home was destroyed… well, it would be a sad day, but he would have no recourse.
In most cases, when a first party claim is filed, the insurer checks the policy for the appropriate coverage, inspects the damage and eventually issues a check to the homeowner to effect repairs. This is what happens in most cases. However, insurance companies are businesses and, despite the fact that you pay your premiums every month, their goal is the same as that of all businesses: maximization of profits.
Your insurance company has a big arsenal at its disposal: lawyers, forensic experts, investigators, adjustors, and a slew of other resources that enable them to maximize their profits by underpaying – or even denying – your valid first party claim. Not to mention the fact that their experts wrote all the “legalese” in the policy and know all the loopholes.
Insurance companies often undervalue or overlook damages, including:
- Structural damage
- Damage to siding
- Roof damage
- Broken windows and screens
- Plumbing and electrical damage
- Wind and fire damage
- Water damage (remember Mr. Lee and his floating mattress!)
- Total replacement damage versus cosmetic repairs
- Damage to vehicles (personal, company and yes, even school buses)
There are also deadlines for filing claims and if you miss the deadlines, you just may be out of luck. Certain vital steps must be taken early in the process to ensure your legal rights are protected, too.
When insurance companies engage in these disreputable practices, it’s called “acting in bad faith.” Here are some ways that insurance companies act in bad faith:
- Delaying or denying your compensation without a good reason
- Failing to react promptly and reply to your claim
- Not performing a proper and thorough investigation of your damages
- Trying to get you to settle for less than your damages cost
- Neglecting to tell you that there is an appeals process for denied claims
- Not explaining why they denied or underpaid your claim
- Making it unnecessarily difficult for you to provide the documentation for your claim or asking for things that aren’t necessary
- Intimidating you through harassing investigative methods
What Can You Do if Your Insurer Acts in Bad Faith?
Call a lawyer! Even though the responsibilities and limitations placed on each party are spelled out in the policy (a contract), insurance companies don’t always play fair. You have every right to contact a lawyer for assistance with your first party claim.
Other Necessary Steps to Take in Support of Your Claim
- Take pictures of all damage to your property. If possible, use the timestamp function on your digital camera to provide proof of the timeframe.
- Protect yourself and your home from further damage, whether from vandals or more foul weather, by covering broken windows.
- Cover holes in your roof with a tarp to prevent further water damage.
- Keep your receipts for things such as tarps and window coverings. Your policy should reimburse you your out-of-pocket costs.
- Be wary of hiring repair people who go door-to-door offering to help. Often, this is a scam.
- Research local licensed contractors and reputable roofers to do the necessary repairs.
- Only hire those contractors or roofers who can prove they have liability insurance. If they don’t and they are injured on your property, you may be liable.
- Never pay in full up front. Reputable businesses will take deposits.
Hopefully, you, our friends and neighbors in the San Antonio area, won’t run into bad faith issues with your insurers. Remember: if you do, call a lawyer immediately!