State Takes Aim at Allstate Over Rita Claims
By Purva Patel
Copyright 2005 Houston Chronicle
Oct. 7, 2005, 1:40PM
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The Texas Attorney General filed
for a temporary restraining order against Allstate this
morning, seeking to keep the insurer from refusing to pay
additional living expenses for some homeowners displaced by
Hurricane Rita.
The injunction, if granted, would keep Allstate from
denying claims for loss of use filed by policyholders
unable to return to their homes because of Hurricane
Rita-related damage.
The petition was filed on behalf of the Texas
Department of Insurance, which has been investigating
related complaints for the past week.
A judge is expected to rule later this afternoon.
The Insurance Department, in its application for the
injunction, said it brought the suit because Allstate's
refusal to pay for loss of use if a homeowner can't get
back to their home "is an unfair settlement practice."
Allstate has held the position that Texas Homeowners
policies do not cover for loss of use claims caused by
Rita unless the insurer can reasonable establish the
property is physically damaged.
"Allstate strongly disagrees with the TDI's position
on this matter. We're confident that our stance of
handling claims consistent with the terms of our policy
language will prevail," Allstate spokesman Joe
McCormick, said in an e-mailed statement.
Hurricane Rita left utilities throughout Southeast
Texas down and left some homes unlivable.
The Insurance Department said in the filing that it
has received numerous complaints against Allstate and
the company's refusal to pay for loss of use coverage,
including from one policyholder whose husband was
disabled and son had autism.
The family needed the additional living expenses
because the husband couldn't live in extreme heat and
his medication had to be refrigerated, according to the
filing.
http://www.chron.com/cs/CDA/ssistory.mpl/business/3386759
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