HOUSTON -- Home and business owners say they paid premiums, but when they needed their insurance the most, they discovered they didn't have any.

The claims are coming from a community hit hardest by Hurricane Ike -- Bolivar Peninsula.

Rusty Standridge says it happened to him. Last summer, business was booming inside his surf shop on Crystal Beach.

"We had $750,000 worth of goods in here," Standridge told us as he stood in the middle of his destroyed store.

Sales were so good, Standridge doubled the size of this shop and his insurance policy. He says he and his wife met with their insurance agent to increase their policy to cover the new building. They thought it was a done deal.

"When you have a $5,000 bill increase, you assume ... " Standridge said.

Hurricane Ike tore through Crystal Beach. The stormed flattened homes and washed away businesses.

Standridge found his store's roof collapsed and everything inside was destroyed. Then he discovered the new half of his shop was still not covered by windstorm or flood insurance.

"You trust your agent. We always have," said Standridge.

Did the insurance agent intentionally leave Standridge unprotected?

Local 2 Investigates has learned the Texas Department of Insurance has opened a fraud investigation looking into Crystal Beach Insurance and its owner, David Osterman.

Insurance insiders tell us investigators are trying to find out if Osterman took in money for premiums, but didn't purchase policies for customers.

Insiders say Osterman may have as many as 500 clients. The state won't confirm that number, but a Texas Department of Insurance spokesperson says the agency has received 11 official customer complaints against Crystal Beach Insurance since the storm.

"There's a lot of people in the same boat," Standridge said. "We've heard more and more as we talk to more people coming down."

Local 2 Investigates talked with another customer who says she also discovered she didn't have flood insurance.

Another customer, Lisa Ivy, paid premiums, but became worried when her paperwork never showed up.

"I called trying to get a copy of my policy because I never received a copy in the mail," Ivy said.

Ivy says she found out her policy was about to expire. She called the insurance company directly and caught the mistake just days before Ike hit.

Meanwhile, Standridge is still looking for answers from Crystal Beach Insurance. Ike washed away important insurance information he needs to rebuild.

"We don't even know what our homeowner's insurance is through, because we don't have any records and he (Osterman) won't even talk to you," Standridge said.

Local 2 Investigates found Osterman and his wife working on their Crystal Beach home.

"We're not doing this," Sandy Osterman told our news crew.

The Ostermans refused to talk with us on camera. Their company Web site says the insurance agency was flattened by Ike and customer records and information were washed away, putting the agency out of business.

Off camera, Sandy Osterman told us no one complained about their insurance coverage before Ike hit.

She says she and her husband are not hiding. They're in town working on their home.

There is no word on when the state's investigation will be complete. The Texas Department of Insurance says it's looking at a number of insurance agents who may have taken money from customers, but then did not purchase actual insurance policies.

If you think you've been a victim of an insurance agent, you need to file a complaint with the state.

You can reach the Texas Department of Insurance consumer complaint line at 800-252-3439 or visit www.tdi.state.tx.us.