Louisiana Record

Tuesday, August 20, 2019

Oak Grove church says insurance company failed to church's building destroyed by fire


By Tomas Kassahun | Sep 17, 2018

MONROE – Life Church of Oak Grove recently filed a federal suit against its insurer alleging the insurance company failed to cover losses after the church's building was destroyed in a fire. 

Life Church filed the lawsuit Sept. 6 in the U.S. District Court for the Western District of Louisiana, Monroe Division, saying Guideone Mutual Insurance Company avoided covering the loss.

According to the lawsuit, Life Church had entered into an agreement with the West Carroll Parish School District Board to lease a former school in Oak Grove and convert it into a church.

“On March 28, 2016, Life Church renewed a policy of insurance issued by Guideone Mutual Insurance Company,” the lawsuit stated. The policy listed Life Church as the “named insured” and listed the West Carroll Parish School Board as an additional insured, according to the suit. 

“Even though the lease agreement only required Life Church to get fire and hazard insurance at fair market values, Life Church purchased replacement value fire and hazard from Guideone,” the lawsuit stated. “Life Church was covered by the policy having paid all premiums due.” 

On March 31, 2016, a fire destroyed the property, but the fire was a covered loss under the policy, the lawsuit stated. The limits of liability contained in the policy were set at the replacement cost value of $2,611,800 rather than the fair market value required by the lease agreement, according to the lawsuit. 

On three different occasions between 2016 and 2017, Guideone offered its policy limit of $2,611,800 to Life Church and West Carroll Parish School Board, the complaint stated.  

In 2018, without the knowledge or consent of Life Church, Guideone agreed on a settlement with the West Carroll Parish School Board and its insurer, Affiliated FM Insurance Company, according to the lawsuit.  

“Life Church was not made aware of this settlement agreement until Guideone provided discovery responses to it in (a) state suit on July 6, 2018,” the plaintiffs said. “Guideone colluded with others to avoid paying the funds due to Life Church by agreeing to pay $1,305,900.” 

According to the lawsuit, Guideone excluded Life Church from the discussion, the negotiation, the payment and third-party settlement agreement with Affiliated FM Insurance Company and the West Carroll Parish School Board.

The lawsuit said the church is entitled to all the damages due under the law, including, but not limited to, damages for bad faith insurance practices, attorney fees and costs. 

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