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Recently, the Texas Windstorm Insurance Association (TWIA) sent a letter to the Texas Windstorm Insurance Legislative Oversight Committee objecting to the enormous number of lawsuits filed against his association on behalf of homeowners. It was partly responding to a suit filed recently by a Houston attorney, one Steve Mostyn.

Unreasonably High Attorney Fees?

Mostyn’s firm has apparently filed hundreds of cases against TWIA and routinely demands very high legal fees. The letter states that his firm has so far demanded over $86 million in legal fees in 315 of the cases it filed against TWIA. Any economic damages awarded in these claims, or punitive damages, will be additional drains on TWIA resources.

The TWIA letter objects to Mostyn making these legal fee demands at the start of each case, before it is known what the fees will actually be. In response, Mostyn has said that he has to send a statutary demand for fees before he knows what the fees will be, and that TWIA is trying to divert attention from its poor behavior to these high fees.

However, a jury will eventually decide whether the fees are too high. The lawsuits are being filed in the wake of Hurrican Ike and claim that TWIA internal emails suggest that TWIA used lower than market prices in estimating costs for materials and repairs, that it unfairly limited roof repair payouts, and that it discouraged the reopening of closed claims.

News reports are not giving any facts in this matter, just the plaintiffs’ claims. TWIA is asking for a “fair opportunity to present the true facts in context” and is claiming that plaintiff attorneys are misinterpreting their internal emails in an effort to create media and political pressure.

TWIA is an insurance company created by the state government but it is privately managed. It is the “insurer of last resort” for property owners in areas vulnerable to hurricanes.

Insurance bad faith is certainly a nationwide concern and there are often hurricane claims filed when payouts are delayed, denied unfairly, or way too low. On the other hand, frivolous lawsuits are also a nationwide concern and filing a series of baseless lawsuits is known to be a way of trying to discredit or bankrupt a person or company.

Each scenario plays itself out and at some point a judge or jury will determine whether TWIA has mistreated its policyholders.

If you feel that your insurance company has shown bad faith in dealing with your claim, you may have a valid case. Please contact our office today if you would like to schedule a free consultation with one of our attorneys.

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