Efforts to curb Louisiana’s property insurance crisis made for some of the most-read Insurance Journal South Central stories of 2023. Readers also delved into Texas court rulings, a profile of Fort-Worth based Higginbotham and more.
Top 10 South Central Insurance Journal Stories of 2023
Louisiana lawmakers appropriated $30 million to the Louisiana Fortify Homes Program (LFHP), which enables eligible homeowners to apply for up to $10,000 in grants to fortify roofs to meet the Insurance Institute for Business and Home Safety (IBHS) Fortified roof standard. Lawmakers also passed accompanying legislation that will require insurance companies to provide actuarially justified discounts to policyholders who build or retrofit structures to comply with the IBHS Fortified standard. Another bill passed by lawmakers will require insurers to offer an endorsement to homeowners’ policies that will upgrade the policyholder’s nonfortified roof to the Fortified roof standard if the home incurs damage requiring a roof replacement. The Louisiana Department of Insurance has distributed four rounds of grants as of late November.
ACE American Insurance Company (Chubb) says it has no duty to defend a Texas Subway franchise sued by the family of a former worker killed on site by an ex-boyfriend. In a complaint for declaratory relief filed this spring in the US District Court Western District of Texas, the insurance company claims it has no duty to defend or indemnify the Subway franchise for a suit involving injuries from a dispute which has been transported into the place of employment from the injured employee’s private or domestic life. The franchise sought indemnity from Chubb, which issued the franchise an occupational accident insurance policy that was in effect at the time of the killing. The policy contains an amendment that excludes coverage for an act of a third person intended to injure the Covered Person because of personal reasons; and mental trauma and mental, nervous, emotional or psychological conditions or disorders. Another exclusion includes a personal animosity exception bars compensation for injuries resulting from a private or domestic dispute transported into the injured employee’s place of employment.
A pair of Louisiana parishes led CoreLogic’s ranking of riskiest U.S. housing markets based on natural-disaster probability. CoreLogic’s Climate Risk Analytics: Composite Risk Score (CRA Composite Risk Score) identified Plaquemines Parish as the place most at risk for property damage from natural disasters in 2023, citing hurricane and inland flood as primary risks. Jefferson Parish was second on the list and faces the same primary risks. CoreLogic’s methodology looks at the physical characteristics of homes, including construction year, first-floor height, number of stories and square footage.
A Texas judge ordered a Houston plaintiffs’ attorney to reimburse an insurer $137,000 for the legal fees it expended to defend itself against a “frivolous” and “groundless” lawsuit that was filed “solely for the purpose of harassment.” Harris County Civil Court Judge LaShawn A. Williams said in a final judgment that Houston attorney Eric B. Dick acted in bad faith when he filed a lawsuit against Standard Casualty Co. on behalf of property owner Carmen Aleman. Dick submitted no evidence that the insurer owed coverage and filed expert designations that had not been approved or even reviewed by the purported “experts” he named as witnesses, the judge’s order states.
Insurers and the Texas Department of Insurance hope to persuade the state Supreme Court to block a constitutional challenge to a law that prohibits roofing contractors from acting as public adjusters on their customers’ damage claims. The high court heard oral arguments in October in a lawsuit filed by Stonewater Roofing Ltd. that charges the public adjuster licensing law, first adopted in 2005, infringes on its First Amendment right to free speech and its 14th Amendment right to due process. TDI hopes to overturn a decision by the Seventh Court of Appeals in Amarillo that found the law’s restrictions on free speech should be subject to strict scrutiny and allowed Stonewater’s challenge to proceed toward trial.
A directive issued by Louisiana Insurance Commissioner Jim Donelon orders agents to notify their Louisiana Citizen policyholders when they receive an offer to be placed with a significantly less expensive insurer in the private market. Donelon issued Directive 222 on September 7, advising all property and casualty producers of the ongoing round of depopulation from Citizens, the insurer of last resort. Donelon also mailed notices to Citizens policyholders across the state who have received offers to be taken out of Citizens but who have not been authorized for take-out by their agents. The notice encourages these policyholders to contact their agent if they wish to have their policy taken out of Citizens, the Louisiana Department of Insurance (LDI) said in a statement.
Fort Worth, Texas-based Higginbotham celebrated its 75th anniversary in 2023. Started as a personal insurance brokerage firm in Fort Worth’s Riverside neighborhood, Higginbotham today has more than 85 offices in 16 states. CEO Rusty Reid told Insurance Journal that Higginbotham’s success stems from the way leadership interacts with employees. “I really encourage our leadership team to don’t beat people up for their weaknesses, but support their strengths,” Reid said. “We’ve put in strategies, and many of them have worked extraordinarily well, but some haven’t. And instead of dwelling on those that didn’t go well, we focused more on the strengths of what did go well.”
Louisiana lawmakers passed several bills last legislative session in response to insurers’ handling of recent natural disasters, five of which went into effect at the start of 2023. The legislation resulted from a shaken homeowners insurance market that experienced eight insurers leave the state since Hurricane Ida.The five laws enacted in January are diverse in scope, ranging from an alternative dispute resolution program for hurricane claims up to $150,000, to a database of registered insurance adjusters.
A federal jury found Baylor University negligent in a Title IX lawsuit and awarded $270,000 to a former student who alleged she was physically abused by a football player in 2014 during a period of wide- ranging scandal at the nation`s biggest Baptist school. In siding with former student Dolores Lozano, jurors in a Waco courtroom held that Baylor “maintained a policy of deliberate indifference to reports of sexual harassment” that put her at risk. The jury awarded her damages for negligence by Baylor but not for the Title IX violation. The verdict came a month after Baylor settled a separate, years-long federal lawsuit brought by 15 women who alleged they were sexually assaulted at the school. That was the largest case related to a scandal that ultimately led to the ouster of the university’s president and football coach Art Briles.
Arkansas’ United Home Insurance was placed in receivership by the Pulaski County Circuit Court on September 6. Arkansas Insurance Commissioner Alan McClain was appointed receiver. United Home consented to the receivership for the purpose of its rehabilitation. The receivership does not apply to its affiliate, Farmers Home Mutual Insurance Company. Based in in Paragould, Arkansas, United Home experienced a decline in its financial condition due to substantial weather-related losses, the Arkansas Department of Insurance said in a statement. The company is licensed to do business in nine states, but currently writes business only in Arkansas, Kentucky, Missouri, Oklahoma, and Tennessee.
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