With flood waters yet to fully recede, and the cleanup and recovery efforts from the damage caused by Hurricane Harvey and its aftermath in southeast Texas just beginning, the Texas Department of Insurance issued a number of bulletins on August 26, 2017 relating to the storm. Several of those bulletins, summarized below, are of particular interest to property insurers.

Bulletin B-0011-17: This bulletin focuses on several portions of the Texas Insurance Code concerning claim adjustment and claim adjusters. The bulletin first notes that, in emergency circumstances such as those presented by Hurricane Harvey, insurers are permitted to use nonresident and emergency adjusters to handle claims. The bulletin then discusses Insurance Code § 4101.251, which prohibits an adjuster from handling a claim involving roofing damage if that adjuster is also involved in the roofing business. Similarly, a roofing contractor may not adjust claims for a roofing loss for which they are also providing roofing services. The bulletin also discusses the requirement that public adjusters be licensed, that public adjusters may not solicit clients during a disaster, and that public adjusters not be directly involved with the repair or rebuilding of any property for which they are providing adjusting services.

 Bulletin B-0017-17: This bulletin serves as a reminder to insurers and their employees that, under Insurance Code § 543.001, no insurer, representative, or any other person may misrepresent the terms and provisions of a policy. The bulletin also notes that those insured under a dwelling or homeowners policy are entitled to choose who repairs their property. Finally, the bulletin notes that unfair claims settlement practices are prohibited, and, that “[n]ot attempting in good faith to effect a prompt, fair, and equitable settlement of a claim submitted in which liability has become reasonably clear” constitutes a prohibited unfair claim settlement practice.

Bulletin B-0018-17: This bulletin “encourage[s]” insurers who deny coverage for wind losses to inform policyholders of potential coverage under the Texas Windstorm Insurance Association if the loss occurred in a TWIA coverage area. The TWIA is an insurer of last resort created by the Texas Legislature for certain geographic portions of the Texas seacoast where the Commissioner of Insurance has made a determination that windstorm and hail insurance is not otherwise reasonably available.

Bulletin B-0019-17: This bulletin “encourages insurers to provide relief to those residents and policyholders who have been temporarily displaced, including the suspension of any vacancy provision in the policy, to allow for continuing insurance coverage.” The bulletin further notes that it is not intended to impact the application of a vacancy provision when a policyholder has permanently moved from their home or business.

Given the extensive nature of the damage and the likelihood of coverage issues arising from Hurricane Harvey, it is likely that further bulletins will be forthcoming from the Texas DOI.  We will provide summaries of any further bulletins relating to property insurance as they are issued.