A state judge in Texas has ordered Allstate Insurance Co. to cover the living expenses of its Texas policyholders displaced by Hurricane Rita last month.
Acting on a petition filed by the attorney general and the Texas Department of Insurance, state District Judge Darlene Byrne issued a temporary restraining order.
The order directs the state’s second-largest home insurer to start paying the expenses of policyholders who have been unable to return to their homes in southeast Texas for the past two weeks.
The Category 3 hurricane wreaked havoc on the Texas and Louisiana coasts Sept. 24.
Allstate said it will oppose payment of the insurance claims in a court hearing on Oct. 20.
“We feel very confident that our policy clearly does not cover” the circumstances in question, said Joe McCormick, an Allstate spokesman. “In the next few weeks, we will be preparing to make our case … In the meantime, we are very focused on taking care of customers with these claims, and we will continue to do that.”
Jim Hurley, a spokesman for the insurance department, said Allstate has refused to cover “additional living expenses” such as hotel or motel charges for families displaced by Hurricane Rita.
Most of the families are policyholders whose homes suffered little or no damage from the hurricane but who have been prevented from returning home either because there is no electricity or because roads have been blocked.
“We disagree with (Allstate officials’) interpretation of what is covered in their policies,” Hurley said. “If you lose use of your home because of a hurricane, an insurer cannot deny your claims just because the house is undamaged.”
For example, he said, an estimated 91,000 people in southeast Texas were still without electricity this week and could not go home.
Included in the examples cited in the lawsuit was the case of a family without power seeking additional living expenses when the husband, who is disabled because of a spinal cord injury, and his son, who has autism, needed to find a place where they could refrigerate medications.
Hurley said his agency has received 75 complaints related to Hurricane Rita, and the vast majority are against Allstate.
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