Wind insurer sued over post-Ike policyholder costs

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Associated Press

Posted on April 1, 2014 at 3:32 PM

AUSTIN, Texas (AP) — A Corpus Christi man is suing the Texas Windstorm Insurance Association for hundreds of millions of dollars because he says it improperly passed on costs to policyholders like him after Hurricane Ike in 2008.

Ramiro Gamboa filed the lawsuit Monday, The Austin American-Statesman (http://bit.ly/1e8WRTj ) reported.

The often-sued association is the state's insurer of last resort for homeowners and businesses that cannot find commercial insurance because of the risk of hurricanes or severe storms.

The lawsuit says Ike left the Texas coast with more in damages than the association had in reserves, and the additional $600 million in losses should have been paid for by insurance companies that subsidize the group's coverage — not by charging policyholders more.

Mark Kincaid, Gamboa's lawyer, said the association should have assessed insurers and instead, "they took it from policyholders' premiums."

A spokeswoman for the association did not immediately respond for comment Tuesday.

The association was formed in 1971 after property insurers quit doing business in coastal parts of Texas because of expensive devastation from Hurricane Celia a year earlier. It now operates as a "pool" of all property insurers in Texas and forces them to cover extraordinary damages in cases of major disaster.

Other lawsuits filed against the association include lawyer Steve Mostyn's attempt to recover money from the association for the Brownsville school district, which he has said was denied claims following Hurricane Dolly in 2008 due to racist adjusters.

Mostyn and other lawyers have also represented thousands of clients who sued the association for hundreds of millions of dollars over botched claims following Hurricane Ike in 2008 and other storms.

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Information from: Austin American-Statesman, http://www.statesman.com

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