Insurance company claiming policy not in force before Hurricane Ike, homeowner says

Kelly Holleran Jan. 5, 2009, 6:13am

A Beaumont woman has filed suit against two insurance companies and a mortgage company, alleging the insurance companies wrongly refused to pay for wind damage to her house caused by Hurricane Ike.

Earlier this year, Rachel Gray bought a home at 5735 Kohler St. in Beaumont that was financed by Hometrust Mortgage, according to the complaint filed Dec. 18 in Jefferson County District Court.

When she bought the home, Gray was advised by a Hometrust Mortgage agent to buy an ESCO Insurance policy that included windstorm coverage, the suit states.

Gray claims she instructed the mortgage agent to procure insurance through ESCO Insurance.

"A binder was issued by ESCO Insurance for the property in question, naming Ms. Gray as the insured," the suit states. "The binder represented that Ms. Gray had paid for and procured a homeowner's policy with windstorm coverage from Wellington Insurance. The premium was paid; the premium check was deposited."

But Gray claims that after Hurricane Ike destroyed her home, she was not able to contact ESCO Insurance Agency.

"ESCO has refused to return calls, e-mails and messages," the suit states.

Gray also made a claim with Wellington, but her claim has been denied on the basis there was no policy in force, according to the complaint.

Because the insurance companies have not covered the damage caused by Hurricane Ike, Gray claims she has incurred additional living expenses being out of the home, runs the risk of having the home foreclosed on and her credit ruined and has suffered mental anguish.

Additionally, the suit claims Gray has suffered damages for tear out, remediation and rebuild which were owed under the policy.

Hometrust Mortgage and ESCO Insurance Agency were negligent by failing to procure windstorm insurance, Gray claims.

ESCO Insurance Agency negligently failed to properly monitor, select and investigate their agents, according to the complaint.

Hometrust Mortgage had a duty to properly investigate the credentials of the insurance agent because it recommended ESCO Insurance Agency, the suit states.

Gray is seeking a judgment in excess of the minimum jurisdictional limits of Jefferson County District Court, plus costs, pre- and post-judgment interest and other relief to which she may be entitled.

She is represented by E. Hart Green of Weller, Green, Toups and Terrell of Beaumont.

The case has been assigned to Judge Milton Shuffield of the 136th District Court.

Case No. D182-877

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