Insurance Denial Based On Segregating Damages

Here, an insurance company refused to pay a claim based on their assertion that the insured customer failed to segregate damages.  The Judge agreed with the insurance company.  The opinion is from the Northern District of Texas, Dallas Division.  It is styled, Svetlin Tchakarov and Popova Rossitza v. Allstate Indemnity Company.

The plaintiffs filed suit to recover damages from Allstate for wind and hair damage to the roof of their property.  Allstate moved for summary judgment based on Allstate’s assertion that Plaintiff’s have not provided evidence that would allow a jury to reasonably apportion the harm from the covered and non-covered causes of loss.

The relevant portion of the policy reads:

2. Windstorm or hail.
We do not cover loss to covered property inside a building structure caused by
rain, snow, sleet, sand or dust unless direct force of the wind or hail first makes
an opening in the roof or walls and the wind forces rain, snow sleet, sand or
dust through this opening to cause the damage.

It is undisputed that the Policy does not cover ordinary wear and tear, and the parties do not dispute that wind and hail damage is covered, except to the extent that the Policy explicitly limits coverage.

The facts of the case can be read in the case.

The law of these types of cases is this:

Allstate contends that plaintiffs have not adduced sufficient evidence that the damage to the roof is covered under the Policy because there is insufficient evidence to support the finding that the damage occurred while the Policy was in effect.  Allstate also avers that the damage to the Property’s roof was due to wear and tear—which is not covered by the Policy—not wind and hail.  Plaintiffs respond that they have adduced sufficient evidence to establish that the damage to the Property was most likely caused by a hailstorm on July 12, 2018—a covered cause and date when the Policy was in effect.

An insured cannot recover under an insurance policy unless it pleads and proves facts that show that its damages are covered by the policy.  Allstate maintains that plaintiffs have not adduced evidence that the damage to the roof was covered by the Policy because the expert’s testimony establishes that the roof was damaged by multiple causes, including non-covered wear and tear and a hail storm that occurred outside when the Policy was in effect.

Allstate posits that plaintiffs have not met their burden of segregating harm resulting from concurrent causes.  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, the 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 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.

Although an insured is not required to establish the amount of his damages with mathematical precision, there must be some reasonable basis upon which the jury’s finding rests.  Plaintiffs make the ipse dixit assertion in their response brief that they have provided a basis by which the jury could calculate the covered damages, but they do not explain what this method is.

After examining the evidence and reviewing the law in these types of case the Court granted summary judgment in favor or Allstate.

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