NU Online News Service, July 16, 3:00 p.m.EDT

Nearly two years after Hurricane Ike destroyed the town ofGalveston, Texas, the Texas Windstorm Insurance Association (TWIA)has agreed to pay an estimated $189 million to policyholders whosehomes were shattered by the storm.

On Wednesday, TWIA announced it reached a settlement withlawyers representing about 2,400 Galveston County property ownerscovered by TWIA policies.

The state-created windstorm insurer has faced lawsuits since thehurricane hit in September 2008 after homeowners realized they didnot have sufficient coverage to cover their losses.

Part of the difficulty in taking care of claims was due to 1,500adjusters that were brought in who were not familiar with theunique form TWIA uses the insurer said at the time.

In addition, disputes arose over how much damage to homes wascaused solely by wind and how much was caused by flood.

"These slab claims were very complicated and numerous, and theyrequired a great deal of time and analysis in determining theimpact from wind and storm surge since TWIA polices only coverdirect loss caused by wind," Jim Oliver, general manager at TWIA,said in a statement.

According to reports, the settlement - which TWIA said willresolve all "slab" cases in which little or nothing was left of astructure after the hurricane - includes:

o Thirty-seven percent of the home's replacement value.

o Attorney fees

o Twenty-five percent of the value of policyholders' coveragefor contents.

o Thirty-five percent of additional living expense coverage.

TWIA noted that the proposed settlement represents a compromiseas a result of mediation.

If approved, TWIA said the settlement will compensate slabowners who are individually represented by lawyers.

Slab owners who do not have attorneys will be compensatedthrough a class-action lawsuit that was also settled and is pendingapproval.

TWIA said in a statement that policyholders will be treated thesame whether or not they hired an attorney.

"We are pleased that TWIA stepped up to the plate and resolvedthese cases so that [slab owners] may now get on with their lives,"Steve Mostyn, a plaintiff's attorney in Houston, said in astatement.

The windstorm insurer said it had more than 100,000 claims in2008 from hurricanes Dolly and Ike, and noted that losses resultingfrom the storms will total $2.1 billion.

Tony Buzbee of Houston-based Buzbee Law Firm, who helped obtainthe settlement, was unavailable for comment.

Jim Oliver was unavailable for additional comment.