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(USA Herald) - A recent lawsuit filed by Miami-based real estate investment company, Eagle Property Capital Investments LLC, alleges that American Risk Insurance Co. Inc. (ARIC) owes between $3.5 million and $9 million for their "haphazard and unreasonable" handling of a claim for damages caused by the February 2021 Texas winter storm. The company, which owns thirteen apartment complexes throughout Texas, is accusing ARIC of breach of contract and violations of the state's insurance laws for not fully covering damage to and mitigation work on the properties.

EPC is seeking the full unpaid amount of its claim, as well as additional damages for bad-faith practices. The company claims that ARIC has only paid roughly $3.8 million of just under $5 million in invoices for EPC's mitigation contractors, and only $5.26 million toward the company's claim, which is worth about $2.5 million more by the insurer's own adjuster's estimate and more than $8 million less than EPC's estimated actual cost value of repairs.

EPC accuses ARIC of inducing them to enter into a contract with the intent of denying benefits in the event of a claim, and of knowingly engaging in unreasonable conduct by not fully covering the damages and mitigation work. According to the company, ARIC went around EPC and paid vendors directly without notifying the company or its public adjuster, in an effort to negotiate discounts, putting the companies in violation of loan agreements and at risk of further violations. This unilateral action also resulted in the company not receiving a final lien release from any of its vendors, causing them to believe none of them have been fully compensated for their work.

The company also alleges that ARIC has not sent proof of payment to the company or its lenders and has not complied with the company's demand for "critical" statements of loss, making it "impossible" to reconcile what was paid to the vendors with what it actually owes them. This has forced the company to hire a forensic accountant to reconcile the claim.

As Samuel Lopez, an investigative paralegal for the USA Herald, points out, "this case highlights the issue of insurer's bad faith, where insurance companies may induce clients to enter into a contract with the intent of denying benefits in the event of a claim. It's important for policyholders to be aware of their rights and to hold insurance companies accountable for their actions."

The lawsuit, filed in the 68th Civil District Court of Dallas County, Texas, brings to light the need for fair compensation for policyholders and the importance of holding insurance companies accountable.