GALVESTON, Texas – A new federal lawsuit is raising questions about whether thousands of Texas coastal homeowners may have been underpaid for damage caused by Hurricane Beryl.
The proposed class-action lawsuit was filed against the Texas Windstorm Insurance Association, commonly known as TWIA, along with outside adjusting companies and individuals involved in processing claims.
Attorneys representing three homeowners allege damage estimates prepared after in-person inspections were later substantially reduced by someone who had not inspected the properties — without the original field adjuster knowing about the changes.
The lawsuit goes further, alleging the process was part of a systematic scheme that could have affected tens of thousands of Hurricane Beryl policyholders.
Those allegations have not been proven in court, and a federal judge has not certified the lawsuit as a class action.
Attorneys point to large reductions in three Hurricane Beryl claims
The lawsuit was filed by homeowners Ernestine Bell, Alicia Stuart and David Mohun, who each submitted claims to TWIA after Hurricane Beryl damaged their properties.
Attorney Shaun Hodge, who represents the homeowners, said a field adjuster went to each property, documented the damage and prepared an estimate.
“What they got was not what they bargained for,” Hodge said during a news conference Tuesday.
According to the lawsuit, another person later took electronic control of the estimates and reduced the amount of repair work included. TWIA then allegedly approved the revised estimates and used them to calculate payments.
The lawsuit claims the estimates homeowners ultimately received continued to identify the original field adjuster without clearly disclosing who had made the subsequent changes.
The differences cited by the plaintiffs are significant.
Stuart’s original estimate was approximately $90,948, according to her attorneys. They say it was later reduced to approximately $30,817 — a reduction of about 66%.
Mohun’s estimate allegedly dropped from approximately $55,406 to $31,013, a reduction of about 44%.
Bell’s estimate was reduced from approximately $22,464 to $10,389, according to the complaint.
Digital records at center of allegations
Attorneys for the homeowners say the estimating software used to process the claims, Xactimate, created an electronic trail allowing them to see when estimates changed and who accessed them.
The complaint goes into particularly detailed allegations surrounding Bell’s claim.
According to records cited in the lawsuit, field adjuster Lee Olivares was initially identified as the owner and estimator. The records later identify David R. J. DeVilbiss as an owner/editor and show one recorded change that reduced the estimate from $26,235.85 to $10,111.03 — a 61.5% reduction.
The final estimate provided to Bell nevertheless continued to identify Olivares as the estimator, the lawsuit alleges.
Attorney Craig Eiland said Olivares has provided an affidavit saying he did not know about or approve the reductions.
“The good thing about Xactimate is it has digital fingerprints,” Eiland said.
The plaintiffs allege DeVilbiss was working in Ohio and made changes to estimates originally prepared by Olivares after inspecting the Texas properties. Those altered estimates were then transmitted back to TWIA in Texas, according to the complaint.
Lawsuit alleges family connection between TWIA and outside adjusting operation
The lawsuit also points to a family relationship that attorneys say raises additional questions about TWIA’s oversight of its outside contractors.
Plaintiffs allege David DeVilbiss, whom they accuse of making changes to estimates, is the brother of a high-ranking TWIA claims executive.
The plaintiffs’ attorneys argue that relationship deserves scrutiny as they seek additional records about how outside adjusters were selected, supervised and allowed to modify claims.
Leading Edge Claims Service was an independent adjusting firm contracted to assist TWIA with claims.
Attorneys say tens of thousands of policyholders could be impacted
The three named homeowners may represent only a fraction of the claims at issue, according to the plaintiffs’ attorneys.
Hodge said they found that more than 80% of the estimates they reviewed from the same field adjuster had subsequently been changed.
“We believe this impacts tens of thousands of homeowners that filed a claim after Hurricane Beryl,” Hodge said.
Hodge estimated that 20,000 to 25,000 homeowners could potentially have been affected and alleged the total amount at issue could reach hundreds of millions of dollars.