The Great American Insurance Company, owned by American Financial Group, has refused to pay the claims of surviving family members of a Texas fire. It says that the smoke which killed four people was "pollution" and therefore, it isn't liable for damages. Critics are saying that the company's denials are bad faith at its absolute worst.

Wrongful death claims denied

A fire in a Houston Texas office building claimed the lives of several people in 2007. Their families brought wrongful death and injury lawsuits against the building's owners who had $25 million in excess insurance with the Great American Insurance Company (GAIC). However, GAIC refused to pay on the claims - saying that the smoke which caused the deaths was really "pollution" - which is excluded from most insurance policies.

Critics are calling GAIC's antics bad faith at its absolute worst. They say that using a pollution exclusion to deny these claims is simply wrong and that smoke from a fire was clearly not what was intended to be excluded. Pollution exclusions have historically excluded coverage for chemical spills, the dumping of toxins and things of that nature.

Consumers agree Consumers who have read the story seem to agree wholeheartedly. The Houston Chronicle, www.chron.com, is one of the papers who covered the story. Here are some of the readers' comments that were posted:

• Dear God, when is someone going to stop insurance companies from stealing money, (calling it premiums), then telling the victims of their theft to "take a hike" when it's time to pay claims. The name of this insurance company, Great American, is a[n] insult to America. They should call themselves "Traitors Insurance Company" and the management should be thrown in jail. If the courts let them get away with this swindle, then there is NO JUSTICE IN AMERICA anymore! - posted by miesque.
• Unbelievable. I'm not sure what the latest statistic is, but it is a well known fact that MOST deaths in a fire are from smoke inhalation. Even I know that. - posted by joseplummer.
• sad that every insurance company in America is purely for their own greedy profit and every claim is denied from the beginning and only paid if there's no way around it. - posted by SL281.

It's interesting to note that the primary insurance carrier did not make the same argument and paid the claims. So, who's right? While only time will tell, many say that GAIC's argument simply seems to lack common sense and feel that the company will pay dearly in the end for acting in bad faith.

If your insurance company has refused your valid claim, contact an experienced bad faith insurance attorney to discuss your situation and evaluate your options. Consultations are free, without obligation and are strictly confidential.