A North Carolina medical practice says its flood insurer and claims handlers delayed, shifted positions, and denied a covered Hurricane Helene loss.
Ashewell Medical Group and its landlord, Boxee Holdings, sued Auto-Owners Insurance Company and a string of claims handlers in federal court on July 15, alleging they delayed the claim, shifted coverage positions, and denied a flood loss after Hurricane Helene flooded the practice's Asheville office and in-house pharmacy in September 2024, according to the complaint.
For claims professionals, it reads like a catalog of pressure points: a National Flood Insurance Program claim, a Write Your Own carrier, two third-party administrators on the file, an individual adjuster, and a bank acting as the broker that the complaint says failed to place enough coverage before the storm hit.
Both plaintiffs were named insureds under a Standard Flood Insurance Policy, or SFIP, that the complaint says provided up to $500,000 in Coverage B for personal property. The practice says it documented more than $300,000 in flood losses - interior walls, ceilings and flooring, tenant improvements, and medical and pharmacy inventory.
The case, as the complaint tells it, hinges on a reversal. In a February 14, 2025 email, the assigned flood adjuster represented that the contents losses and building improvements and betterments - the upgrades a tenant makes to a leased space - would be covered and paid once verified, up to ten percent of the $500,000 limit, the filing says. He also said an advance payment of about $50,000 could be submitted, according to the complaint.
The claim was later denied or underpaid on grounds the complaint says contradicted those statements, including that the losses were not covered and that the practice had not sent enough documentation - even though, the plaintiffs say, they had already turned over inventories, pricing spreadsheets, photographs, pharmacy software-generated reports and vendor invoices.
The timeline draws fire, too. The complaint alleges Torrent Technologies, one of the administrators, did not request a sworn proof of loss until June 24, 2025 - more than nine months after the flood, and well past the 60-day window the plaintiffs point to - then cited an alleged lack of documentation to deny the pharmacy inventory claim on July 22, 2025.
On coverage, the filing says Auto-Owners argued the policy covered contents only and excluded improvements and betterments, and pointed to a condominium or owners' association policy that the plaintiffs say paid them nothing and was already exhausted. The plaintiffs say both entities were entitled to separate sublimits under the policy's Coverage B.8 and B.9.
The complaint also targets First-Citizens Bank & Trust Company and its agent, alleging they failed to procure adequate flood coverage for a property in a known flood-prone corridor and never flagged that the coverage was too thin - a failure-to-procure theory that puts broker errors-and-omissions exposure front and center.
In all, the suit brings 14 causes of action, from breach of contract and professional negligence to negligent misrepresentation, tortious interference, and unfair and deceptive trade practices under North Carolina law, which the complaint says carries the prospect of treble damages. Plaintiffs say they were denied at least $125,000 in covered losses and want damages, a declaration of coverage, attorneys' fees and a jury trial.
The allegations have not been tested, and no court has ruled on the claims.
