Suit Accuses Insurance Company of Fraud

Updated: Tuesday, 09 Jun 2009, 9:13 PM CDT

Published : Tuesday, 09 Jun 2009, 6:44 PM CDT *

NED HIBBERD

GALVESTON, Texas - Four Galveston County residents have filed a lawsuit against the Texas Windstorm Insurance Association.

They claim the TWIA, which is the insurer of last resort for 14 coastal counties, committed fraud in the wake of Hurricane Ike.

Plaintiffs' attorney Tony Buzbee said the TWIA issued a memo two months after the storm, reversing its policy on roofs with non-visible damage.

"That basically said that unless there is visible damage-- that is, shingles missing-- they will not pay for the repair of the roof," he said.

Buzbee added his clients sustained roof damage when their shingles lost their adhesive seal during Ike.

He said these unadhered shingles void the roof warranty and can lead to leakage.

Buzbee estimates 80-percent of Galveston County homes sustained such non-visible damage and he is asking the judge to certify his lawsuit as a class-action, potentially including thousands of plaintiffs.

Jim Oliver, General Manager of the TWIA, said he could not comment on the suit because he has not seen it. But he vehemently denied the association doubled back on its original policy.

"We did not, I repeat, did not change our position with regard to our roof replacement or repairs any time during the storm," he said. "It remained the same."