Flood insurance did not cover flooded home, Bridge City couple's lawsuit claims

Michelle Massey, East Texas Bureau May 26, 2010, 10:17am

Hurricane Ike

When their property in Bridge City was flooded by Hurricane Ike's storm surge on Sept. 13, 2008, Milton and Mary Perio believed the flood insurance they had purchased just a month before would cover their damage claim.

However, the insurance company denied their claim stating that the flood insurance was not in effect on the date of the loss.

To determine what date the policy was effective, Milton and Mary Perio filed suit against Everett Wayne Collier, doing business as C & C Insurance Agency, and National Lloyds Insurance Co. on April 8 in the 260th Judicial District Court for Orange County.

National Lloyds removed the case to the Beaumont Division of the Eastern District of Texas on May 21.

According to the complaint, the Perios claim that when they paid for the flood policy on Aug. 27, 2008, an employee of the insurance company told them the flood insurance "would in fact take full force and effect immediately upon the closing of the property."

However, National Lloyds told them the flood insurance policy did not go into effect on the date of closing, Aug. 29, 2008, because it was not purchased while "making, increasing, extension or renewal of a loan, as required by the federal statutes, to allow the flood coverage be effective as of the date of closing."

Claims against Lloyds include violations of the Texas Deceptive Trade Practices Act, fraud and negligent misrepresentation.

The plaintiffs are seeking damages for cost of replacement, diminished or reduced market value and costs of repairs.

The plaintiffs are represented by attorney Steve Parkhurst of Dies & Parkhurst LLP in Orange.

Jury trial requested.

U.S. District Judge Marcia A. Crone is assigned to the litigation.

Case No. 1:10cv00291

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