Insurance Regulators Accuse Texas Company

In a new development, various state insurance regulators have presented formal accusations that the Texas Windstorm Insurance Association is guilty of carrying on operations using deceptive and unfair practices.

It seems that this isn’t the first time that the association has had troubles with the Texas Department of Insurance. For the last month, the two have been in an argument over the association’s denial of roof-related claims that were filed back when Hurricane Ike damaged homes in Texas.

Jerry Hagins, a representative for the insurance department, had this to say, “Whatever talks they were involved with did not reach any agreement, so that triggered this formal action.”

The real focus of the problem has to do with Texas Windstorm’s practice of denying claims for lifted or unsealed shingles. A number of policyholders have filed complaints that the winds during Ike blew back their roof shingles, which caused the seals to be broken.

Texas Windstorm, a state-created but privately run insurance agency, has blatantly denied such claims. (One report circulated between the association and the department said that TWIA did not consider loose shingles damaged.)

The association has said that if any claims are to be declared valid, the homeowners should offer proof that their shingles were sealed before the hurricane struck. The state insurance department maintains that that unsealed shingles are something that would cause homes to fail mandated inspections.

Texas Windstorm is an agency that specializes in selling coverage to home and business owners to cover windstorm damage that live in coastal areas. The association provides coverage to those parties that cannot find insurance elsewhere. They are planning to address the allegations made by the Texas Department of Insurance during an administrative court hearing on December 1.

If a judge determines that the allegations are valid, the insurance department would demand penalties that would include consumer restitution among other things.

The department of insurance’s inspections is something that is required by businesses and homeowners who wish to have association coverage.