A federal class-action lawsuit accuses the Texas Windstorm Insurance Association of secretly slashing Hurricane Beryl damage estimates before paying coastal homeowners, an allegation that could affect TWIA policyholders in Clear Lake Shores, Seabrook and across Galveston County.

The suit, filed Thursday, Aug. 13, in U.S. District Court for the Southern District of Texas (case No. 3:26-cv-00271), was announced at a press conference in Galveston on Tuesday, Aug. 18. Attorneys from the Hodge Law Firm and Eiland & Bonnin accuse TWIA and outside adjusting companies of a "systematic scheme" to reduce damage estimates after field adjusters had already inspected properties, invoking the federal Racketeer Influenced and Corrupt Organizations Act.

The three named plaintiffs, Jamaica Beach and Galveston homeowners, lost nearly $100,000 combined, the lawsuit alleges.

One homeowner's estimate dropped 66%.

How it allegedly worked

Field adjuster Lee Olivares inspected hurricane-damaged homes and prepared repair estimates using Xactimate software, according to the complaint. Those estimates were then sent to David DeVilbiss, a supervisor at Leading Edge Claims Service working from Ohio, who the lawsuit alleges reduced the figures without ever visiting the properties or contacting Olivares.

Olivares' name stayed on the final reports sent to TWIA, which paid based on the lower amounts, according to the Galveston Daily News. Olivares provided an affidavit stating he did not know about or approve the changes. Attorneys described him as a whistleblower.

"The good thing about Xactimate is it has digital fingerprints," attorney Craig Eiland said at the press conference, referring to the software's built-in audit trail that records every change and who made it.

TWIA reviewer James Jaraczeski is also named as a defendant. The complaint alleges he accepted the revised estimate in one plaintiff's claim and marked it "Review Accepted," "QA Approved" and "Client Approved" without flagging the alterations.

The reductions were steep. Plaintiff Alicia Stuart's estimate fell from roughly $90,948 to $30,817. David Mohun's dropped from about $55,406 to $31,013. For Ernestine Bell, the Xactimate audit trail cited in the complaint shows her estimate was reduced from $26,235.85 to $10,111.03, a cut of about 61.5%. Other sources report slightly different figures for Bell's claim, which may reflect separate estimate versions such as an initial versus a supplemental estimate.

Family connection alleged

The lawsuit also alleges David DeVilbiss is the brother of Charles Edward "Chip" DeVilbiss, TWIA's senior claims manager. Chip DeVilbiss's sister-in-law, Shelly DeVilbiss, is also accused of adjusting claims for the association's benefit.

Hodge said he brought the issue to TWIA management in the summer of 2025, but the insurer took no action.

Olivares later reviewed 29 of his own claims and found 23 had been revised downward, according to the Houston Chronicle.

Scale of the alleged scheme

Hodge estimates 20,000 to 25,000 homeowners could be affected, with total damages potentially reaching hundreds of millions of dollars. After Hurricane Beryl made landfall July 8, 2024, more than 34,000 policyholders filed claims with TWIA, which paid out about $336 million.

Galveston County alone holds roughly 86,700 TWIA policies, about 30% of the insurer's statewide book, according to insurance industry data. Clear Lake Shores, located in Galveston County, falls squarely within TWIA's coverage area. Seabrook, east of Highway 146 in Harris County, is also TWIA-eligible. However, Webster, Nassau Bay and the Clear Lake area west of Highway 146 are not in TWIA's territory; homeowners there carry standard policies that include wind coverage.

TWIA's response

TWIA spokesperson Aaron Taylor said the association does not comment on active or potential litigation and that its claims-adjusting procedures comply with applicable state and federal laws.

Leading Edge Claims Service, which now operates as Hansen Scott Holdings, did not respond to a request for comment.

The attorneys are also asking state officials to investigate and amend laws to prevent similar conduct. No state agency has confirmed an investigation is underway as of Wednesday, Aug. 19.

The allegations have not been proven in court. A federal judge has not certified the case as a class action, and no hearing date has been announced.

Homeowners who believe their TWIA claim was underpaid can file a complaint with the Texas Department of Insurance.