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

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

On Wednesday, TWIA announced it reached a settlement with lawyers representing about 2,400 Galveston County property owners covered by TWIA policies.

The state-created windstorm insurer has faced lawsuits since the hurricane hit in September 2008 after homeowners realized they did not have sufficient coverage to cover their losses.

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

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

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

According to reports, the settlement - which TWIA said will resolve all "slab" cases in which little or nothing was left of a structure 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' coverage for contents.

o Thirty-five percent of additional living expense coverage.

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

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

Slab owners who do not have attorneys will be compensated through a class-action lawsuit that was also settled and is pending approval.

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

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

The windstorm insurer said it had more than 100,000 claims in 2008 from hurricanes Dolly and Ike, and noted that losses resulting from the storms will total $2.1 billion.

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

Jim Oliver was unavailable for additional comment.

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TWIA & Attorneys Reach Settlement For Ike-Related Claims

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