Hail Damage – Segregating Covered And Uncovered Damages

For Hail Claims layers, the Western District, Waco Division, issued an opinion in April 2017, that needs to be read.  It is styled, Stephen Hahn v. United Fire and Casualty Company.

Hahn suffered hail damage to his property after a recent hail storm and made a claim for damages.  United Fire denied the claim based on their assertion that the damage was not segregated from the damage occurring in the recent storm and prior damage.  They also denied based on the damage only being cosmetic in nature.

Hahn filed suit for breach of contract and insurance code violations and United Fire eventually filed a motion for summary judgment seeking to have the case dismissed.

United Fire argues that Hahn fails to provide evidence sufficient to distinguish between covered and non-covered perils — in particular, damages caused by “defective maintenance or construction,” which, it asserts, are damages not covered by the policy.  Notably, United Fire fails to point to language in the policy that provides for such an exclusion.  After the Court’s review of the policy, it identified two provisions that may be applicable.  but neither were addressed by either United Fire or Hahn.

United Fire argues that, under the doctrine of concurrent causes, Hahn has the burden to show that the loss he claims is covered, and, in turn, must be able to provide sufficient evidence to allocate between loss created by covered causes and loss created by non-covered causes.  In Texas, the doctrine of concurrent causes provides that where covered and non-covered perils combine to create a loss, the insured is entitled to recover only that portion of the damage caused solely by the covered peril.  The insured is therefore required to provide evidence upon which a jury or court can allocate damages between those that resulted from covered perils and those that did not.  Failure to do so is fatal to an insured’s claim.

Hahn submits evidence in support of his assertion that all claimed loss was covered.  For example, Hahn’s property manager testified that prior to the storm, all past roof leaks had been sufficiently repaired, but that after the storm, the property began experiencing significant leaks in areas that had never leaked before — suggesting the leaks were caused by the storm alone.  While United Fire has evidence to the contrary, it would be difficult to conclude from the competing evidence that Hahn cannot allocate his loss between covered or non-covered causes at trial — or, in other words, that there is no genuine issue of material fact that Hahn cannot allocate his loss.  Allocation of loss need not be made with mathematical precision — there simply must be some reasonable basis on which a jury can evaluate what percentage of loss was created by the covered cause of loss.  thus even assuming that all loss caused by faulty repairs was not covered, the Court is unconvinced, based on the competing evidence, that Hahn will not be able to allocate between covered and non-covered loss, and denies United Fire’s summary judgment on that basis.