Windstorm association reverses course on bait shop owner’s Harvey claim

May 24--On Thursday, Mary Ann Heiman was at the site of her Port Aransas bait shop, which nine months ago had been flattened when Hurricane Harvey roared across the causeway. Nothing had remained after the Category 4 winds passed.

But Thursday was a good day. "Right now, they're pouring my foundation," she said. "I've waited a long time to see this."

Until recently, it seemed as though this day might not come at all. Heiman's application for a loan from the federal Small Business Administration had gotten hung up in endless tangles of red tape. The Texas Windstorm Insurance Association had denied her claim, even though she'd purchased a policy covering $60,000 worth of coolers and other equipment needed to sell the shrimp, mullet and other bait that anglers deploy in their pursuit of the Texas coast's rich lode of redfish, trout and drum.

The loan finally came arrived, though. Two days after the American-Statesman profiled Heiman's battle with the windstorm association, she said, an administrator called her up to apologize. She received what she described as "a fair and equitable" check last week.

There was no argument that Heiman had purchased a policy for her Offshore Adventures business. She'd paid $679 to the windstorm association -- known as TWIA -- for coverage a month before Harvey hit. An adjuster who'd visited her devastated business agreed the damage had been caused by wind and recommended Heiman be paid in full.

But TWIA, which offers last-resort wind and hail insurance for coastal communities that can't otherwise afford it, denied Heiman's claim. Her insurance agent had mistakenly transposed two numbers on her policy application, listing the bait shop's address as 1590 Highway 361 instead of the actual location at 1950 Highway 361.

After receiving the policy application, the windstorm association's underwriter couldn't find the incorrect address using Google Maps. But she had approved the policy anyway, observing that "nothing seemed out of the ordinary."

Running low on money, Heiman had protested the denial to the State Office of Administrative Hearings. In early April, Judge Michael O'Malley concluded that TWIA should pay her claim, writing, "TWIA is as much to blame for insuring a property with an incorrect address as the insurance agency."

Administrative hearing conclusions are treated as recommendations, and on April 17 TWIA's lawyers announced their intention to continue opposing Heiman's claim. The Statesman's story was published a week later.

A spokeswoman for TWIA did not respond to an email seeking comment. But Heiman said she had received a phone call from an agency executive two days later informing her that TWIA was reversing its position and that her claim would be paid. She received a follow-up email on April 26.

"On behalf of myself and the Texas Windstorm Insurance Association, I offer a sincere apology for the manner in which your claim for damages resulting from Hurricane Harvey was handled," Vice President David Durden wrote. "Our initial position on your claim was in no way based on a desire to avoid paying a legitimate claim or to make it difficult for you to recover from your loss."

He continued: "During our reconsideration of our position, we realized that we had been too rigid in applying our rules. We will use this experience to improve our evaluation and consideration of similar circumstances that we may encounter in the future."

Court records show that Heiman filed a request to dismiss her case a day later. Her lawyer, James Madison, said she received her payment last week.

"Here was a person who had insurance and had paid for her policy, and (TWIA) wasn't paying her," he said. "But they did a complete 180-degree reversal. They gave her everything she had coming."

Heiman said she had hoped to be open for business for the long Memorial Day weekend, traditionally a busy time for anglers. But finding contractors and navigating the permitting and coastal engineering requirements has taken longer than anticipated.

Still, Heiman said she had already ordered the dozen large tanks needed to hold her bait. A friend managed to find another sea shells-in-acrylic toilet seat for the shop's restroom. She has been speaking with the various boat captains she uses to deliver shrimp, squid, mullet, croaker, piggy perch and crabs, preparing orders to be ready for the July 4 weekend.

"A few of them had already been calling me," Heiman said. "They're asking, 'Are you ready yet?'"

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