Hail Claims – Separating Covered And Non-Covered Damages

Hail damage claims have few unique aspects to themselves.  One of those unique aspects is that an insurance company claims the damage to a roof is the result of something other than the recent hail storm a homeowner is claiming, then the homeowner has to properly present the claim to be able to make a recovery.  The most common reason an insurance company denies the claim is that their position that the damage to the roof is the result of wear and tear.

Here is a 2022 opinion from the Northern District of Texas, Dallas Division, that deals with this issue.  The opinion is styled, John Garcia v. State Farm Lloyds.

Garcia had a homeowners policy with State Farm.  After  a hail storm Garcia made a claim for hail damage to his roof.  State Farm sent out an adjuster who asserted the damage was mainly due to wear and tear and that the damage from the hail was minimal to the extent that it did not meet Garcia’s deductible.  Garcia hired an expert that said the damage was in excess of $70,000 and was solely the result of the hail.

Garcia sued State Farm alleging various violations of the Texas Insurance Code and for breach of the insurance contract.  State Farm filed a motion for summary judgement seeking dismissal of Garcia’s claim asserting that Garcia failed to meet his burden of segregating damages under the doctrine of concurrent causation.

In support of its motion, State Farm contends that it engaged a professional engineer and a building envelope consultant to evaluate the extent and cause of the damage to the Property and that both concluded that Garcia’s roof was not damaged by wind or hail; that Garcia has not produced credible evidence that wind or hail damaged his Property beyond what has already been accounted for in State Farm’s Revised Estimate; that weather data confirm that there were no hailstorms on or around October 20, 2019 with hail that exceeded the industry-established threshold to damage concrete tiles and no tornadoes within seven miles of the Property on that date; and that both of its experts independently concluded that the damage to the Property’s roof was caused by wear, tear, deterioration, or defective design, none of which is covered by the Policy.  Garcia responds that “there continues to be a fact issue as to whether Defendant breached its contract with Plaintiff, as both the Public Adjuster and the Plaintiff’s expert, Michael Ogden, disagree with the Defendant concerning the causation, scope, and value of the Plaintiff’s claim at issue herein.”

The Court then discussed the law relevant to this case.

An insured cannot recover under an insurance policy unless it pleads and proves facts that show that its damages are covered by the policy.

The court holds that Garcia has produced sufficient evidence to create a genuine issue of material fact on the question whether his insurance claim is covered under the Policy, i.e., whether a storm damaged the Property on the RDOL and the loss exceeded the deductible.  He relies, inter alia, on the report of Ogden, his retained causation expert, who concluded after inspecting the Property that the replacement cost value was $70,032.32, and that “the cause of loss is hail and wind damage.”  Ogden also stated that he had “reviewed weather data from the area and is of the opinion that these damages are the result of a storm that occurred on or around June 9th, 2019.”  This evidence is sufficient to create a genuine issue of material fact with respect to the question of coverage.

State Farm contends that, even if Garcia could present evidence of wind or hail damage during the Policy period, “it is beyond question that there is evidence of wear and deterioration and Garcia has failed to meet his burden to segregate covered loss from non-covered loss.

Although an insured who suffers damage from both covered and excluded perils is not precluded from recovering, when covered and excluded perils combine to cause an injury,
 he insured must present some evidence affording the jury a reasonable basis on which to
allocate the damage.  Because an insured can only recover for covered events, the burden of segregating the damage attributable solely to the covered event is a coverage issue for which the insured—here, Garcia—carries the burden of proof.  It is essential that the insured produce
evidence which will afford a reasonable basis for estimating the amount of damage or the
proportionate part of damage caused by a risk covered by the insurance policy.  Failure to segregate covered and noncovered perils is fatal to recovery.

Garcia does not necessarily dispute State Farm’s evidence that the roof of his Property exhibited signs of wear, tear, deterioration and other non-covered losses such as design defects, foot traffic and the like.   Instead, his position appears to be that the loss that is the subject of his insurance claim was caused solely (i.e., 100%) by the wind and hail produced during the June 9, 2019 storm.

The Court denied State Farm’s motion.


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