Complex owner Claude Raffin stands in the doorway of an apartment at Villa Apartments. Raffin would not enter the apartment, which remains severely damaged from Hurricane Harvey and covered in black mold.
Complex owner Jon Gathercole points out black mold and paint that sloughed off apartment 314’s walls at Villa Apartments. The apartment is still damaged after Hurricane Harvey.

Nine months after Hurricane Harvey, Claude Raffin and Jon Gathercole haven’t started repairing the interior of their apartments, The Villas, because they’ve been fighting with their insurance company.

Only 18 of the 85 units are rented. The remaining 67 units were damaged Aug. 25 by Hurricane Harvey. Ceiling and wall debris sit on the floors, and some apartment buildings have shifted.

The apartment owners are at a standstill – their insurance company has yet to give them the go-ahead to begin interior work.

“I never thought in my wildest nightmares we’d be where we are today,” said Raffin, 77, of Las Vegas. “I used to be so proud to visit. There were people living here — families. I was so proud and said, ‘Oh my God, I own this.’ Now, I walk through, it’s a ghost town, and – ‘Oh my God, I own this?’”

Many apartment complexes and commercial businesses are dealing with problems regarding their insurance companies and are stonewalled when it comes to making repairs, said Lee Swearingen, president of Coldwell Banker The Ron Brown Company.

“You can drive down Sam Houston and see projects sitting there and don’t see any construction going on and no cars in the parking lot,” he said. “Economically, there is something going on there. If they were settled with their insurance, they would be repairing to try and move things forward.”

The problem is disruptive for businesses, and owners have to set aside time and resources to deal with their insurance companies, Swearingen said.

“It’s kind of emotional – it takes a lot of time and strength away from you that you could be using to move your business forward,” he said.

If business owners or homeowners are experiencing problems with their insurance companies, they should file a complaint with the Texas Department of Insurance, said Jerry Hagins, agency spokesman. The agency specialists will investigate the claim and make sure the company is following its policy.

Hagins said he hasn’t heard of many problems with insurance companies because of Harvey damage.

“I know after every severe weather event, the insurance companies are very busy, and there are always some problems that need to be resolved. That always happens,” he said. “Whether there were any particular more problems than usual — I haven’t heard that.”

The Villas’ insurance policy is written with Strata Underwriting, and Peleus Insurance Company, a member of Argo Group International Holdings LTD, is the insurer. Officials from either company did not respond to requests for comment.

The insurance company’s adjuster recommended that the owners of The Villas replace the roof, but then the company wanted a second opinion to its own adjuster. While Raffin and Gathercole waited to find out if they could get a new roof, rain continued to pour into the apartments, causing more damage.

The owners hired an industrial hygienist for $18,000 to inspect the apartments, and 45 tenants had to vacate because the units were uninhabitable.

“We’ve created a village of a family here. We spent 12 years making this community. We didn’t want them to go,” said Gathercole, 69, of Las Vegas. “We don’t have enough years in our life to put together what we did in 12 years.”

Gathercole and Raffin hired Paramount Adjusters to put together an estimate of the work that needed to be done, and it came out to $5.635 million. However, the insurance company came up with a figure of $1.1 million for the work, which is less than the cost of the new steel roof alone. Paramount Adjusters continues to fight the insurance company.

“The insurance company goes and writes a scope, which is about 60 pages,” said Chris Moore, Crest Exterior, project manager. “Our scope is 1,200 pages of damage.”

The apartment owners hired Crest Exterior to complete the work, and Moore has been living on-site at the apartments waiting to start the interior work.

So far, the company has awarded $900,000, which Raffin and Gathercole used to install a new roof.

Before the hurricane, the two received $54,000 a month from rent, but now they receive $11,000. They also have insurance for loss of income, and they’ve received only $30,000.

“We’re constantly appealing, appealing, appealing, begging,” Gathercole said.

Raffin added, “We’re at a standstill right now. Nothing seems to be happening.”

It took Raffin and Gathercole 30 years of investing to come up with millions of dollars to purchase The Villas, Gatherstone said. The two rely on the monthly income because they have retired. They have other smaller investments, but most of their investment is in Victoria.

“This whole effort seems to be … to save the insurer money, but it’s at the extent of their lives and everyone’s lives here,” Moore said. “They’ve affected 80 people all to save a few bucks.”

Kathryn Cargo reports on business and agriculture for the Victoria Advocate. She may be reached at kcargo@vicad.com or 361-580-6328. Follow her on twitter @kathryncargo.

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