Insurance policy language and the Facts of a situation have to be read together to determine whether or not coverage applies to a claim.
Here is a 2021, opinion from the Southern District of Texas, Houston Division, that originates from a claimed pipe burst and the insurance company denial of the claim. The opinion is styled Lee & Charletha Henry v. Allstate Vehicle and Property Insurance Company.
The Henry’s had a homeowners insurance policy with Allstate. The Henry’s claim a pipe burst on the second-floor bathroom, causing damage to the first-floor kitchen area. Allstate denied the claim asserting the policy does not cover the claimed damage because the damage to the kitchen wall and the interior does not appear to be sudden and accidental but the result of ongoing water intrusion from the expansion joint. The Henry’s sued for breach of contract and various violations of the Texas Insurance Code, Prompt Payment of Claims Act, and the Texas Deceptive Trade Practices Act.
Allstate filed a motion for summary judgment asserting (1) the plaintiffs have failed to submit evidence that would allow for a fact–finder to segregate “covered” damages from “non–covered” damages under the plaintiffs’ policy; and (2) the claimed damages did not arise from an accidental or sudden loss, but from a lack of maintenance of the Property,which is not a coverable event under the policy.
The Court was of the opinion that Allstate has met its summary judgment burden as to two elements of the Henry’s case. First, assuming that the Henrys held a homeowners’ policy with Allstate during the spring of 2017, (the time of the claimed loss) the Henrys have not produced any substantive evidence that the property damage they claim—water damage to the first–floor kitchen ceiling and cabinets—actually occurred during the policy’s coverage period.
The Henrys have also failed to produce evidence showing that their 2017 claim for damages was a result of a busted pipe in the spring of 2017. The burden to segregate damages attributable solely to the covered event is a coverage issue for which the insured carries the burden of proof. Allstate’s claim records indicate that the Henrys filed multiple claims involving reports of water damage to the Property, including losses on July 1, 2017, August 27, 2017, and March 29, 2018, as well as a claim for damage to the kitchen ceiling on April 20, 2016. Nevertheless, there is no expert testimony or evidence showing that the damage claimed was caused by the spring 2017 pipe burst and not some other event. While the Henrys offer an expert report based on an inspection of the Property on August 22, 2020, they concede that the report addresses only the estimated cost of repairing the damage observed and fails as to causation. Given the lack of any expert evidence distinguishing the alleged damage from the numerous claims, the Henrys have not met their burden of segregating damages.
The Court ruled in favor of Allstate. This opinion is a good read for Insurance Attorneys who handle homeowners claims and in particular for plumbing and pipe cases that result in damage to the home.