A coalition of coastal Texas property owners has filed a federal racketeering lawsuit against the Texas Windstorm Insurance Association (TWIA), accusing the state-backed insurer of systematically slashing payout estimates on Hurricane Beryl damage claims.

The lawsuit, lodged in U.S. District Court in Galveston under the Racketeer Influenced and Corrupt Organizations (RICO) Act, claims TWIA engineered a wide-scale operation to minimize payouts, wrongfully withholding hundreds of millions of dollars from policyholders. So far, the insurer has disbursed approximately $336 million for Beryl-related losses.

“This is not an isolated dispute involving a few policyholders shorted by tens of thousands of dollars,” said plaintiffs’ attorney Shaun Hodge during a Tuesday press briefing. “We believe this pattern affects tens of thousands of coastal residents who submitted storm claims.”

The legal action centers on testimony from field adjuster Lee Olivares, an employee of Leading Edge, an independent adjusting firm contracted by TWIA following the July 2024 storm. Olivares conducted on-site property inspections across Galveston and uploaded his damage assessments through the industry-standard software Xactimate, which logs user-level revisions. According to court filings, a supervisor at Leading Edge, David DeVilbiss, covertly trimmed these initial damage assessments without visiting the properties, consulting the field inspector, or contacting the homeowners.

The reduced estimates remained under Olivares’ name when forwarded to TWIA, which subsequently issued payments based on the slashed totals. In one cited instance, Olivares assessed storm damage to Galveston resident Alicia Stewart’s home at $90,948. TWIA later issued her a settlement check for just $30,816 following supervisory reductions. Olivares later reviewed 29 of his filed files and discovered that 23 had been modified downward after initial submission.

The complaint also outlines an alleged internal conflict, highlighting the relationship between two brothers: David DeVilbiss, the supervisor at Leading Edge who allegedly altered the assessments, and Chip DeVilbiss, TWIA’s senior manager of claims and litigation. Hodge noted that he alerted TWIA executives to the systematic reductions in mid-2025, but the association failed to investigate or remedy the issue.

While declining to address the specific allegations in the complaint, a TWIA spokesperson stated that the association’s claims-handling protocols strictly follow all applicable state and federal regulations.

Established by the Texas Legislature in 1971, TWIA serves as the insurer of last resort, providing wind and hail coverage to residents across 14 coastal counties who are unable to secure policies on the private market. Hurricane Beryl struck the Texas coast in July 2024, causing severe wind damage and flooding, cutting power to over two million utility customers, and resulting in more than 40 fatalities across the region.