Hurricane Laura Damage Claim Dispute: Insurer Denies Bad Faith Allegations

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Church Mutual Insurance Co. S.I. (CMIC) has denied allegations of bad faith in a motion for summary judgment filed ahead of a March trial. The insurer is facing a bad faith claim from Henning Memorial United Methodist Church in Sulphur, Louisiana, which is seeking $9 million in damages for Hurricane Laura damage.

According to CMIC, the church repeatedly demanded that its claim be fully paid despite questions from the insurer about the extent of the damage from the August 2020 storm. The insurer accused Henning of “refusing to tangibly support its claim with actual incurred expenses, substantively address CMIC’s reasonable questions, or explain how CMIC’s reports are objectively incorrect.”

In a competing motion for summary judgment, Henning claimed that CMIC’s adjusting firm in October 2020 estimated the damage at $9.2 million, but paid only a $500,000 advance within the statutory time limit. However, CMIC argued that the amount of damage was hardly settled in October 2020 and that it still isn’t clear how much damage Henning sustained.

The insurer also claimed that Henning’s initial adjuster later lowered its estimate by more than $3 million and that the church is now relying on a new contractor with a new estimate.

“An insurer is not automatically deemed to be in ‘bad faith’ when it makes a reasoned decision not to pay a full claim which is in dispute,” CMIC wrote in the motion.

Henning is represented by Wells T. Watson of Baggett McCall LLC, and CMIC is represented by Sidney W. Degan III, Eric D. Burt, F. Scott Kaiser, and Jordan P. Amedee of Degan Blanchard & Nash.

The dispute between Henning Memorial United Methodist Church and Church Mutual Insurance Co. S.I. (CMIC) over the damages caused by Hurricane Laura in August 2020, continues as both parties have filed motions for summary judgment.

Henning Memorial is alleging bad faith on the part of CMIC, claiming that the insurer estimated the damage to be $9.2 million but only paid a $500,000 advance within the statutory time limit. In its motion for summary judgment, Henning stated, “The court will not see a more compelling case on the arbitrary failure to pay by an insurance company related to Hurricane Laura. Bad faith abounds!”

However, CMIC has denied these allegations and has filed a motion for summary judgment seeking to dismiss the bad faith claim from Henning Memorial. CMIC argued that the church repeatedly demanded that its claim be fully paid despite the insurer having questions about the extent of the damage. The insurer also claimed that Henning’s initial adjuster later lowered its estimate by more than $3 million and that the church is now relying on a new contractor with a new estimate.

It is important to note that the outcome of this case could have significant implications for insurance policyholders, as it will set a precedent for how insurers handle claims in the aftermath of natural disasters. The case is currently scheduled for a March trial and it remains to be seen how the court will rule on the motions for summary judgment filed by both parties.