Energy & Environment

Wind Or Flooding? Texas Supreme Court Considers What Insurance Should Cover

Hurricane Ike hit Galveston over six years ago. But at the Texas Supreme Court, a battle continues over who should pay for the damages from the natural disaster.


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Damage in Galveston, September of 2008 after Hurricane Ike. Photo by Pat Hernandez


If you’ve ever made a claim for storm damage using your homeowners insurance, this case might ring familiar except the damage estimates are likely a lot bigger.

“Could possibly be $8 million,” recounted lawyer Brendan McBride of early damage estimates as he argued before the Texas Supreme Court. His clients are the owners of .

“There was massive damage to the Pointe Apartments as a result of the hurricane,” said McBride in his arguments before the court.

There was so much damage from Hurricane Ike in 2008 that the city ordered the apartments demolished. But when the owners tried to collect from the Lexington Insurance Company?

“They were told ‘we’re not paying for any of that’. And a few days later is when (the apartment owner) files it lawsuit against Lexington,” said McBride.

The central issue and one that has come up in many such insurance policy disputes: was it wind damage that is covered by the insurance policy or is it flooding damage that is not? More specifically In the jargon of Texas insurance law, the issue involves the “concurrent causation” doctrine and coverages that apply when city ordinances demand that heavily damaged buildings be demolished or rebuilt.

Justice Paul Green asked, “The wind damage was sufficient to cause the demolition?”

To which McBride responded, “Absolutely.”

But Lexington Insurance argued otherwise.

“We didn’t breach our contract. They were not owed,” argued insurance company lawyer Thomas Wright. He said the claim was not covered by the policy, but that other claims by the apartment owners were paid, giving them millions in profit on their original investment in The Pointe.

“It’s an odd case because while Hurricane Ike hurt many people, this company made money,” said Wright.

The Supreme Court’s decision on what the insurance covered will likely be announced by sometime this summer.

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