Plaintiff's home was damaged by Hurricane Katrina on August 29, 2005. See Bridges v. EMC Mortgage Corp., 2010 U.S. Dist. LEXIS 18433 (S.D. Miss. March 2, 2010). She filed suit against her insurer, Liberty Mutual. In her amended complaint, the plaintiff added her mortgage company, EMC, as a defendant, alleging EMC failed to procure wind coverage.
The amended complaint alleged that under the mortgage, plaintiff assigned the obligation of payment for insurance and to obtain insurance to the mortgagee. On August 18, 2004, EMC's agent notified it that the home had not been covered by wind insurance since July, when Liberty Mutual did not renew wind coverage. Further, the agent informed EMC that premiums for wind coverage should be forwarded from the escrow account to the Mississippi Windstorm Underwriters Association (MWUA), but EMC failed to do so. The plaintiff alleged she was not informed of this prior to Hurricane Katrina. Therefore, she alleged EMC misrepresented the fact that it would purchase the wind insurance.
The plaintiff settled with Liberty Mutual. EMC filed a motion to dismiss. The court noted that one who undertakes to procure insurance coverage owes a duty of reasonable care and good faith in performing the duty. Here, EMC was notified over a year prior to Katrina that the premiums were to be forwarded to the MWUA, but EMC never did so. Accepting these allegations as true, the Amended Complaint stated a claim for failure to procure insurance under both contract and negligence theories. Accordingly, the motion to dismiss was denied.
