Suit alleges insurer failed to pay Hurricane Rita claim

A Jefferson County woman has filed suit against underwriters at Lloyd's London, alleging she was not paid money to which she was entitled after Hurricane Rita destroyed sections of her home.

When Darlene Pelaez's property at 3965 Concord in Beaumont sustained roof, water, wind and structural damage on Sept. 24, 2005, during the storm, she submitted a claim to Lloyd's, which had insured her property, according to the complaint filed Dec. 8 in Jefferson County District Court.

Pelaez requested Lloyd's cover the cost of repairs and asked for additional living expenses, the suit states.

However, Lloyd's denied Pelaez's claim, even though its policy promised coverage for such losses, she claims.

Lloyd's told Pelaez the damage to her property was not covered under the claim, which constitutes a violation of the Texas Insurance Code, unfair settlement practices, the suit states.

"Defendant failed to make an attempt to settle plaintiffs' claim in a fair manner, although they were aware of their liability to plaintiff under the Policy," the suit states.

Lloyd's also failed to affirm or deny coverage of Pelaez's claim within a reasonable time, another violation of the Texas Insurance Code, unfair settlement practices, she claims.

Lloyd's behavior constitutes a breach of contract because it did not live up to promises made in its insurance policy with Pelaez, according to the complaint.

The company also violated multiple provisions of the Texas Insurance Code, the suit states.

Pelaez is seeking actual, treble, punitive and exemplary damages, plus attorney's fees, costs, pre- and post-judgment interest and other relief to which she may be entitled.

Michael R. Ramsey and J. Steve Mostyn of The Mostyn Law Firm in Houston will be representing her.

The case has been assigned to Judge Bob Wortham of the 58th District Court.

Case No. A182-820