Court sides with Allstate in Rita evacuee expenses case

A state district judge in Austin, Texas, has ruled Allstate will not have to cover the living expenses of evacuees displaced from their homes by Hurricane Rita if thier homes were not damaged, the Houston Chronicle and the Associated Press reported.

The Texas Department of Insurance took Allstate to court last year to force the company to pay claims filed by the evacuees.

Allstate, the state’s second-largest insurer, refused to pay living expenses for the displaced homeowners unless their homes were made uninhabitable by direct damage.

But the state argued that homes are considered uninhabitable if a homeowner suffered power outages for significant periods of time, couldn’t get home safely, or was barred from coming home by authorities.

On Jan. 24 the judge sided with Allstate.

Rita, a category 3 hurricane, hit the Texas and Louisiana coasts Sept. 24, 2005.

The state had received a temporary injunction last year forcing Allstate to pay living expenses, but the company obtained a hold order until an appeals hearing.

Included in the insurance department’s lawsuit was the example of a family without power seeking additional living expenses when the husband, who is disabled because of a spinal cord injury, and his son, who has autism, needed to find a place where they could refrigerate medications.

Spokesman Jim Hurley said the insurance department will consult with its legal counsel and the Texas Attorney General’s office to determine how to proceed.

Allstate officials have said the company is following its stan-dard practice for homeowners insurance.

“From our standpoint, we want to make sure we pay what the policy provides and take care of our customer, and we felt that’s what we were doing with the position we took,” Allstate spokeswoman Kim Whitaker said.

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Topics Texas