(USA Herald) – The Henning Memorial United Methodist Church in Louisiana has accused Church Mutual Insurance Co. S.I. of mishandling a $9 million Hurricane Laura claim in a manner that “far exceeds the threshold for bad faith.” The church has requested the federal court to deny the insurer’s bid to dismiss the bad faith claim and instead grant the church’s competing motion for summary judgment.
Investigative reporter Samuel Lopez, who has been following this story closely, revealed that the church claims the insurer schemed to underpay its policyholder and deprived the church of its rightful benefits. The church has alleged that instead of relying on the reports of its experts, the insurer demanded that its experts change their reports and delete recommendations to ultimately lower the damages owed to the church. Furthermore, the church claims that CMIC hid the damage estimates from Henning.
The church alleges that the insurer’s adjusting firm estimated the damage at $9.2 million following the August 2020 storm, but CMIC only ever paid a $500,000 advance. Henning further alleged that the insurer hired additional experts in an attempt to refute the adjuster’s estimate, and when the estimates came back higher than expected, CMIC demanded that they be lowered. For example, the church said the building consultant CMIC hired provided an initial estimate that was comparable to the church’s and stated that all roofs needed to be repaired or replaced, but the insurer asked the consultant to remove all roofing items from its estimate.
In response, CMIC said it “has substantial and reasonable questions as to the extent of Henning’s loss,” especially since the church began its mitigation efforts before the insurer had a chance to inspect the property. The insurer also argued that its adjuster’s report was not intended to be a final adjustment of Henning’s loss and was simply a summary of the church’s assessment of the property damage. CMIC added that the adjuster recommended that the claim be “explored by someone with much more expertise,” which is why the insurer retained and relied on additional experts.
Bad faith is a term used in the insurance industry to describe actions or practices by an insurer that are unreasonable or unfair to the policyholder. It involves a breach of the insurance company’s duty of good faith and fair dealing towards its policyholder. In this case, the Henning Memorial United Methodist Church has accused Church Mutual Insurance Co. S.I. of violating its duty of good faith and fair dealing by scheming to underpay the church and hiding damage estimates.
The Henning Memorial United Methodist Church is represented by Wells T. Watson and Meagan N. Johnson of Baggett McCall LLC, while Church Mutual Insurance Co. S.I. is represented by Sidney W. Degan III, Eric D. Burt, F. Scott Kaiser, and Jordan P. Amedee of Degan Blanchard & Nash. The case, which is being heard in the U.S. District Court for the Western District of Louisiana, will determine whether Church Mutual Insurance Co. S.I. acted in bad faith towards the Henning Memorial United Methodist Church.
In conclusion, this case highlights the issue of bad faith in the insurance industry and the importance of policyholders understanding their rights and the duty of good faith and fair dealing that insurers owe to them. Policyholders who believe that their insurance company has acted in bad faith should seek the advice of a knowledgeable attorney to help them navigate the complex legal process and protect their rights.