January 25, 2006
Scott Lawrence
AUSTIN, Texas (AP) _ Allstate will not have to cover the
living expenses of evacuees displaced from their homes by
Hurricane Rita if their homes were not damaged, a state
district judge in Austin has ruled.
The Texas Department of Insurance took Allstate to court
last year to force the company to pay claims filed by the
evacuees.
Allstate, the state's second-largest insurer, refused to pay
living expenses for the displaced homeowners unless their
homes were made uninhabitable by direct damage.
But the state argued that homes are considered uninhabitable
if a homeowner suffered power outages for significant
periods of time, couldn't get home safely, or was barred
from coming home by authorities.
The judge sided with Allstate on Tuesday.
Rita, a category 3 hurricane, hit the Texas and Louisiana
coasts Sept. 24.
The state had received a temporary injunction last year
forcing Allstate to pay living expenses, but the company
obtained a hold order until an appeals hearing.
Included in the insurance department's lawsuit was the
example of a family without power seeking additional living
expenses when the husband, who is disabled because of a
spinal cord injury, and his son, who has autism, needed to
find a place where they could refrigerate medications.
Spokesman Jim Hurley said the insurance department will
consult with its legal counsel and the Texas Attorney
General's office to determine how to proceed.
Allstate officials have said the company is following its
standard practice for homeowners insurance.
"From our standpoint, we want to make sure we pay what the
policy provides and take care of our customer, and we felt
that's what we were doing with the position we took,"
Allstate spokeswoman Kim Whitaker said.
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