Texas homeowner Jim Warner has been locked in a legal battle with State Farm over denial of insurance claims for the damages to his home from Hurricane Ike. That battle was just upgraded to a category five by the Travis County District Attorney’s office when DA Gregg Cox launched a criminal investigation into the matter.

The dispute arose after Warner discovered that not all roof damage is the same.  During the 2008 hurricane, Warner’s shingles were lifted, breaking the water-tight seal on the roof. Under his policy, State Farm claimed such detached seals were not a physical loss, and thus the damage was not covered.

Up until recently, homeowners like Warner have filed complaints with the Texas Department of Insurance (TDI) or pursued individual civil litigation against their insurer. Such legal action has recently produced internal documents questioning whether the denial was covered up as TDI began its investigation. Interestingly, the department forced the Texas Windstorm Insurance Agency and the Texas Fair Plan Association to pay shingle claims unsealed by severe storms after an extensive reevaluation.

State Farm has already paid more than $1.5 billion in losses from the storm and settled the majority of the claims brought to court. They have stated they are fully cooperating with the investigation, though with the legislative session approaching, there will be many more eyes watching.

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