Why is the Ocean Springs Yacht Club suing its insurance carriers? Here’s what we know

The Ocean Springs Yacht Club is suing its insurance carriers for failure to pay for hurricane wind damage to the beachfront property.

In its lawsuit filed this month in Jackson County Circuit Court, the yacht club says it sustained “significant damage” after Hurricane Zeta hit the Mississippi Coast in October 2020. The damages were reported to the property’s insurance carriers, Certain Underwriters at Lloyd’s of London, Hamilton Insurance DAC and Starstone Speciality Insurance Co.

Based on an inspection by loss consultants in May 2021, the Yacht Club submitted a claim for about $434,000 in damages to its building and swimming pool. The Yacht Club had paid for $1.73 million in coverage on the building and $85,000 on the swimming pool.

The insurers had the property inspected in July 2021, concluding they owed nothing after the Yacht Club met its deductible. The amount of the deductible was not listed in the lawsuit.

“The inspection was brief and failed to document the full scope of the damages, resulting in an estimate grossly underreporting the extent of damage,” the lawsuit says. The lawsuit also says the insurers applied too much depreciation to the losses.

The insurers have refused to evaluate the Yacht Club’s information and facts surrounding the loss, the lawsuit says, instead relying “entirely on the incorrect assumptions and conclusions of its agents, employees or consultants.” The lawsuit says the companies acted in bad faith and breached their contract, even manipulating computer software to lower the cost of repairs.

The Yacht Club is asking a judge to force the insurance companies to pay its claim, plus a penalty for acting in bad faith, attorney’s fees and expenses.

The insurance companies are expected to respond to the lawsuit once they have reviewed its contents.