UPDATE: Porters Neck Country Club in 'dire financial straits,’ sues insurance company for not covering Hurricane Florence damage

WILMINGTON, NC (WECT) - Porters Neck Country Club is taking legal action against its insurance company, claiming it owes the club more than $6 million to cover property damage from Hurricane Florence.

The club also claims the insurance company authorized destruction of evidence that would prove it was required to pay for repairs.

The club’s attorneys filed a civil action on March 20 outlining the complaints and requesting a trial by jury in U.S. District Court.

"(Porters Neck Country Club) has taken on substantial debt to finance the repairs, but available funds are nearly exhausted and (the club) is in dire financial straits," according to the complaint.

In the legal documents, Porters Neck Country Club outlines its grievances against Allied World Assurance Company Inc., which provided insurance coverage for the club when Hurricane Florence made landfall in September 2018.

"(The insurance company) has wrongfully and in bad faith refused to pay (the club's) claim," the complaint reads.

The club claims most of the hurricane damage was caused by wind and rain, not flooding. The club’s insurance policy did not cover damage by flooding.

"Multiple structures at the Club were severely damaged, including the clubhouse, a 25,000 square foot building at the heart of the Club," the complaint reads. "The clubhouse suffered severe damage on its first and second floors, due to high winds that damaged the roof and windows on both floors, and wind-driven rain that subsequently intruded into both floors through the damaged roof."

The club’s maintenance office, pool bathroom, snack bar building, sports center, tennis courts and golf course were also damaged by the hurricane.

Several days after the storm, a generator broke, causing a pond on the property to overflow, which caused more damage, according to the documents.

Porters Neck Country Club submitted a notice of loss on Sept. 15 to the insurance company, according to the documents. A public adjuster told the club it suffered more than $7.5 million in losses, and at least $6 million was covered by the insurance policy.

The insurance company paid $750,000 in November 2018 and “refused to pay the remainder of the covered loss based in part on the policy’s flood exclusion, despite the Club having been fully and completely damaged by wind and wind-driven rain days before any flooding occurred at certain structures.”

Based on guidance from the insurance company, the club hired a loss mitigation company during the repair process. The club alleges the insurance company authorized the loss mitigation company to remove or destroy clubhouse property that would show wind and rain, not flooding, caused damage.

The insurance company has also not paid the club any money to cover the cost — more than $1.4 million — of a loss mitigation company, the documents say.

The club said it has made multiple attempts to request clarification and payment from its insurance company, which sent two aerial photographs and the opinion of its expert as evidence that flooding was the cause of the damage, according to the complaint.

“The club has lost current and prospective members,” the complaint says.

The club also hasn’t been making as much money as before because of wedding, party, and other paid event cancellations because of property damage.

A restaurant at the country club is reopening April 5, according to a newsletter. Golf course repairs are ongoing.

“(The insurance company’s) legally and factually unsupported denial of coverage has forced (Porters Neck Country Club), a nonprofit corporation, into dire financial straits,” the compliant reads. “(Porters Neck Country Club) took out a substantial line of credit to finance the repairs, but that line is nearly exhausted and (Porters Neck Country Club) will very likely be unable to secure additional financing.”

WECT reached out to Allied World Assurance Company Inc., and a spokesperson replied they did not have a comment.

In a statement sent to WECT, a spokesperson for Porter’s Neck Country Club reiterated its claims against the insurance company and offered assurances that the club continues to offer services to member.

“Repairs to the Club are nearly completed, and they should be finished before the summer golf season,” the press release reads.

“Our insurance carrier needs to meet its obligations to the Club,” said Dave Adams, president of the Club. “The insurance carrier’s failure to make payment on our claim is causing financial strain on this Club. It is unfair and wrong.”

“We understand other clubs in our area are experiencing similar insurance claim problems coming out of Hurricane Florence,” Marc Tingle, General Manager and COO of the Club, added. “But the good news is that our members and guests are playing golf today and will continue to be able to use the Club facilities, as the repairs are incrementally completed. We will be ready for the busy summer season, despite the insurance carrier failing to uphold its obligations to us.”

(UPDATE: This story has been updated on Saturday afternoon Porter’s Neck Country Club sent WECT a press release)

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