Claims – Segregating Damages

For Insurance Attorneys, here is a case that is important to know and understand.  The case is from the Western District of Texas, San Antonio Division.  It deals with segregation of damages when required under an insurance policy.  The case is styled, Mark Sadovsky v. Nationwide Property and Casualty Insurance Company.

Sadovsky had a home owners policy with Nationwide on April 12, 2016, when he suffered alleged hail and wind storm damage to his home.  On April 20, 2016, he submitted a claim and Nationwide eventually paid the claim and closed the claim.

In the spring of 2017, Sadovsky noticed several neighbors having their roofs repaired.  A neighbors contractor inspected the roof and informed Sadovsky of unrepaired hail damage and informed Sadovsky that the costs of repair would be $68,372.89.

Nationwide attributed the new found damage to a February 2017 wind storm and this new claim was denied.  Sadovsky’s expert testified that the original manufacturer of the roof tiles was no longer in business and getting matching tile would not be possible, thus, the whole roof needed to be repaired.  A lawsuit was filed for breach of contract and insurance code violations.

Nationwide argues that Sadovsky failed to segregate covered and non-covered damages and that the Nationwide policy excludes coverage for damage resulting from mismatched materials.

In its analysis of this case, the Court pointed out that an insurer is liable only for losses covered by the policy.  Thus, when covered and excluded perils combine to cause injury, it is the burden of the insured to present evidence affording the jury a reasonable basis on which to allocate damages.

Nationwide argues that there is no evidence to segregate between covered and non-covered losses.  This Court agreed.  Sadovsky’s expert made no attempt to allocate covered damages from non-covered damages, instead making a claim for a full roof replacement because Sadovsky’s original roof tiles were no longer available.  Sadovsky presents no evidence that adequately segregates loss from the April 2016 storm from the non-covered loss that appears to have occurred in February 2017.  The Court requires Sadovsky to prove the damage is related to a particular storm, which he fails to do.

The Court ruled in favor of Sadovsky.

When an insurance company alleges damages resulting from non-covered sources, it then becomes the burden of the insured to segregate the damages or provide evidence as to when and how the claimed damage occurred.