Last month, California state judge Mitchell L. Beckloff made a ruling on the case regarding insurers refusing to cover flood damage from Hurricane Katrina. In brief, the Judge denied Aon Risk Insurance Services West Inc’s motion to dismiss the case, sending the claims (which include professional negligence, fraud, and breach of contract) to trial.
The case involves a claim that Aon breached its contract to provide comprehensive disaster insurance to Northrop Grumman Corporation, which hired Aon to organize a large property insurance program to cover its Gulf state shipbuilding yards in the event of catastrophic damage from natural disasters (precisely those like Hurricane Katrina).
Northrop claims that Aon Risk Insurance assured the company that it had approximately $20 billion in coverage for these types of disasters.
After Northrop’s shipyards in Louisiana were destroyed in 2005, costing close to $895 million in damage, it turned to Aon, which became engaged in its own dispute with Factory Mutual Insurance Co. over the coverage, all the while failing to warn Northrop that some of the damage may not be covered.
Northrop is now seeking to recover millions in attorneys’ fees and costs, as well as additional damages, due to this failure (although it did resolve the issue with Factory Mutual separately). Aon’s response was that there is no triable issue in the case, and Northrop never specifically requested storm surge coverage. The Judge disagreed, stating that the court could not conclude, based on the record before it, that Northrop did not have a claim for damages.
General Insurance Woes for Hurricane Victims
Large and small parties alike suffered from insurance disputes related to Hurricane Katrina. Homeowners were led to believe that their insurance would cover the hurricane damage to their house, only to find insurers low-balling the damage. Business owners who thought they had flood insurance were shocked to discover that they had deductibles totaling $16,000.
So many neighborhoods in Louisiana are full of these common complaints; that insurance companies have reneged on their promises, offered miniscule settlements, low-balled the cost of repairs, dropped customers at the last minute, and increased the price of coverage beyond reason. As of 2007, close to 7,000 insurance-related lawsuits were filed in the U.S. district court alone, and thousands of complaints have been filed with the Louisiana Department of Insurance.
Harrell & Nowak
The law firm of Harrell & Nowak handles serious, complicated cases, including prosecuting insurance disputes. Homeowners should not be misled and denied insurance that is clearly covered in their policies, and customers have valid claims that these companies are using deceptive business practices.
The attorneys at Harrell & Nowak have recovered over $2.5 million in hurricane insurance cases. In addition, Shirin Harrell and Eric Nowak were appointed to Plaintiff’s Steering Committee for all Hurricane insurance cases against State Farm and Allstate in Section F, United States District Court for the Eastern District of Louisiana. We have also obtained more than $500,000 obtained in additional insurance proceeds and a settlement after filing a lawsuit when representing a condominium for damages sustained by the building from Hurricane Katrina and $200,000 in a settlement for a business insurance dispute where a Louisiana business was denied property and business interruption coverage under its insurance policy (specifically for wind and rain coverage from Hurricane Katrina, like many homeowners). We are prepared to assist you with any insurance dispute you are facing — contact us today for a free consultation.