As many Houstonians transition from cleaning up to rebuilding their communities after last week’s storms, it’s a good time to make sure your home is protected from natural disasters before they strike.
To get a better understanding of how that’s done, KPRC 2′s Michael Horton spoke with Rene Sigman, a Houston-area storm attorney.
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Michael Horton: What have the last five days—or honestly, the last month—looked like for you as a storm attorney? I’m sure it’s been very busy.
Rene Sigman: It’s interesting because last year we had the hottest summer on record for a really long time, and then you have the El Niño and La Niña effects. We’re used to hurricanes down here, and they come every 20 years, or 15 years roughly. Tornadoes, we’re not so used to, but we’ve seen a pickup in tornadoes in the last couple of years. Hailstorms have also picked up in Texas. You don’t know when they’re going to happen, but this last month has been a very rainy month. In Kingwood, there’s there was a lot of flooding up there.
But it’s been a huge pick-up.
We’ve had at least two flooding events -- three if you count parts of this last storm. And now we’ve had a derecho. I understand that phenomenon that happened last Thursday was not common; this weather pattern is absolutely erratic. So, for a storm attorney who specializes in first-party insurance, there’s going to be a lot of claims from these storms just because there’s a lot of damage to people’s homes and businesses. So, it’ll be a question as to whether these insurance carriers can timely handle these claims, make payment or coverage so that people can get back to normal.
Michael Horton: From your experience, are you able to make an educated guess as to whether insurance carriers will be able to handle claims at this volume?
Rene Sigman: I’ve been doing this for 22 years, so you can kind of pick up on the patterns. What I would say is some of the larger carriers are usually better equipped at being able to send out, you know, their “cat team;” that’s what it’s called -- a catastrophe team. They have adjusters they have trained to handle these types of claims.
But there are some smaller carriers covering some large areas who really do not have a lot of staff adjusters in general. So, when things like this happen, they have to outsource it. So, they have to either go to an independent adjusting company and hire them, or they end up sending out people who are not licensed adjusters. That’s all their job is, is to take photographs and measurements and then report back to a desk adjuster. Those claims usually are woefully underpaid, because if you can imagine, the person who is licensed didn’t go out to investigate. It was someone who probably isn’t familiar and/or trained to do a proper investigation, and then you have a desk adjuster just kind of reviewing photographs from their desk. You can’t really do an assessment that way, right?
So that’s going to probably be the biggest issue is you’re going to see a lot of desk adjustments. That’s what I call it. Or you know, an adjuster saying, “Hey we can’t get out there. Just take pictures yourself homeowner and send us your pictures and we’ll look at it.” Well, again, you’re putting that type of investigation in the hands of a homeowner who may not have the ability to see and look at hidden damages or latent damages that aren’t visible. But people are going to be faced with that in situations like this.
But, within 30 days you’re going to know. So, as time goes by, like the next 30 days, we’re going to see whether these claims have been paid or if they are still pending. When 60 days comes along—at least in Texas—these carriers have to make a payment or a coverage decision within 60 days. The only thing that gets them out of making a decision or payment within 60 days is if the governor declares it an emergency or extends those timelines under the insurance code, or if they’ve asked for information from the homeowner. For example, if they’re asking for more information, and the homeowner doesn’t provide it, that gives them a reason and an excuse not to pay within 60 days.
Michael Horton: Is there any particular research you can do to avoid running into—like you said, one of those desk adjusters in a situation like this?
Rene Sigman: Well, you should ask. The best thing to do is ask a lot of questions about your insurance adjuster process. When you file your claim, make sure you report all the damage you know about. If you have interior damage or if you have roof damage, make sure you put all that in your email or in writing when you send it to your adjuster. But then ask [questions]. “Are you a licensed adjuster in Texas?” “Would you be coming out to my house?” “Are you sending someone else out?”
I will tell you; a lot of these carriers use companies that do basically measurements and photos, but they will not be adjusting your claim. Frankly, I think as a homeowner and a policyholder, when you pay your premiums, you pay for an adjustment—you pay for coverage, but you pay for an adjustment. So, you can end up having someone come to your house. You can say “I want an adjuster who is licensed in Texas to come out.” You can ask for that. If they don’t want to cooperate you can deny and say, “No, we’re not going to do that.”
If you don’t agree with their final result or payment, that’s when you can seek legal action and do something more about it. But when you put in your request, you definitely want to ask the questions about the process. “Who’s going to come out? When are they going to come out? How long is it going to take?” Ask for a copy of your policy. If you don’t have one, make sure they send you an actual policy that’s in effect, and you can insist on asking them whether a licensed adjuster will be at your house.
Michael Horton: Not to get too far off on a tangent, but what happens when you decide to take legal action, in a situation like you mentioned?
Rene Sigman: So, you know, first-party litigation is not like personal injury or any other legal action. Specific statutory insurance codes are in place in Texas, and they have very particular standards and requirements. You want to first find an attorney who knows and practices first-party insurance litigation, which means someone who represents policyholders on property claims. The second thing to understand is in Texas, if you have a weather-related claim and that could be a hurricane, a tornado, a freeze, an ice storm, anything -- If you have a weather or Mother Nature-related claim, then you are not allowed to file a lawsuit until you send a notice letter or a demand letter. That also requires somebody skilled to know how to write that letter pursuant to the insurance code.
What usually happens, is if a homeowner is upset and they have told their carrier they don’t agree with them, they hire a lawyer. What happens next, is usually the lawyer sends out a letter of representation to a carrier that says, “I represent such-and-such policyholder, and I need this document from you, and please communicate with me.”
The next step will be that the lawyer sends a demand letter under the insurance code that spells out everything the carrier has done wrong, the law and which law it applies under, how much money they’re seeking and who they plan to sue. That letter is pretty detailed, and it’s basically a notice that you’re going to file suit if they don’t pay the claim or compromise. They have 61 days to either inspect, make an offer settlement or do nothing. I will tell you, 95% of the time the carriers do nothing. They do not do anything differently. They don’t change their mind. They don’t offer any settlement. It’s usually on that 61st day, you can file your lawsuit. The sooner you get to a lawyer, the better as in that 60 days starts whenever you hire that lawyer, and they send that notice out. So, if you don’t want to be waiting too long to get a payment or pursuing legal action, then you need to see a lawyer sooner rather than later.
Michael Horton: As a, as a lawyer. Do you have any advice on questions property owners should ask to find that attorney who knows what they’re doing?
Rene Sigman: I tell people, you know, in a day of technology, if you’re talking to a lawyer, you should absolutely Google them. You should research them. Look them up on the internet to see what comes up. That’s the first thing. It’s the easiest thing you can do, is research them, Google them, look up and see how much experience they have. Are there good stories or bad stories about them? You can find out a lot just by searching their name. On top of that, you need to ask that lawyer if they’ve ever tried these cases. Have they been to trial on a first-party insurance case? And have they been successful? That’s important because, you want to hire someone who’s been able to take a case to trial and be successful on it, right? Because these cases are in litigation, and they go to a jury ultimately. So, you want somebody who has that experience to take your case all the way if it doesn’t settle, and it doesn’t resolve. That’s important. And then a lot of it is word of mouth.
A lawyer should have a bio, a CV, and a resume. They can send it out and it will tell you things. Do your research online, do your research in the community, but also ask that lawyer, “Have you tried cases similar to this and have you been successful?” You can even ask for references. You know, people don’t think about that often. For example, if you’re a business owner and you have a commercial building, and you want to know if that lawyer’s handled any other commercial complicated cases, you could ask for a recommendation. They can give you a reference to one of their former clients. That’s another way to do it, too.
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Michael Horton: Is there anything else that that you would like to add?
Rene Sigman: I think this is a really good time for homeowners and business owners to look at their policies, whether or not they have a claim right now from this storm. We are heading into the summertime, and it will be it Hurricane season. It is essential that, if they don’t have a copy of their policy, they need to ask their agent or their carrier for a copy of the policy that’s in effect right now. And they want to read that policy, and it may be long. It could be 100 pages, but they need to read it, and it specifically read any changes and addendums that are attached. And why I say that, is every year insurance policies change. In Texas, there are 400-plus different types of policies out there, just specific to homeowners’ policies. You may think you have coverage for your roof for example. What you may not realize, is there’s an addendum that came with your renewal that says you don’t. The reason many people don’t pick up on it is because every year your premiums increase. Just because your premiums increase doesn’t mean your coverage decreased. So, you need to look at it every time you get your policy.
The biggest thing I will say, if there’s any homeowners that have metal roof, for example, or commercial buildings with metal roofs. The things we see the most now are metal roof exclusions, roof surface exclusions, cosmetic exclusions. But they’re usually attached to a residence that has a metal roof or a building with a metal roof. They’re in the back of the policy and people don’t even realize they’re there. Agents aren’t paying attention; they don’t know they’re there.
What happens is, people with metal roofs often are getting denied based on these exclusions, and they had no idea they were even in their policy.
So, my word of advice is this is a good time to start thinking and looking and reading your policy. If you see something alarming or you’re not sure about, ask your agent. If they don’t give you a good answer, call an insurance lawyer. They’ll know. They’ll be able to give you advice for free. They’re not going to charge you. Ask them, “Hey, what is this look like in this policy? I don’t know what this means.” That way, you can be prepared in case we have a hurricane.