Hail damage and insurance claims. No one wants to think about either. Another thing no one wants to think about? Claims that end up in court.
Interestingly, despite popular belief, insurers often end up on the losing side of such claims. Plaintiffs file their lawsuits and the insurers are then left having to disprove things, sometimes in front of jurors who tend to favor the little guy, facts notwithstanding.
But not every time, and not in two recent important cases that no doubt missed most everyone’s attention – unless you happen to be an insurance underwriter, practice insurance law or, like me, work as a claims advocate.
The more recent of these cases, Sunflower Condominium Association vs. Owners Insurance Co., showed up on court dockets after the homeowners’ association filed a suit in late 2016. Sunflower claimed the insurer breached its contract and acted in bad faith after it failed to fully cover damages caused by a 2014 hailstorm.
The jury, however, sided with Owners, concluding Sunflower misrepresented the facts about exactly when it learned about the property damage and inflated the repair estimate.
Sunflower submitted its claim to Owners more than a year after the hailstorm, because, it said, it only discovered the damage in December 2015.
The insurer, however, was able to point to an email sent in the spring of that year by Sunflower’s property manager to its board of directors that included a work proposal to address roof damage caused by hail. The insurer also pointed out that one of the association’s directors filed a claim in October 2014 based on hail damage to her car while it was parked at the Sunflower property.
The court found those arguments persuasive, and, after a trial, the jury did, too.
On the other big question, an independent auditor hired by the insurer estimated the damage at the property would cost about $590,000 to address. Sunflower’s contractor estimated the cost would be considerably higher, amounting to $1.8 million.
The difference in cost estimates alone would no doubt have been enough to prompt Owners to countersue, whether or not Sunflower had filed its claim in a timely manner.
Case Study: Raising Hail After the Storm
The other recent legal battle that anyone with a hail claim will want to heed pitted another condominium association, Cherry Grove East II, against two insurance companies.
Like the Sunflower case, the insurers in this matter prevailed because the condominium association failed to give them prompt notice of damage. It took Cherry Grove 14 months before it reported the loss from one storm and seven months before it filed a claim on a separate storm.
Not surprisingly, the court concluded Cherry Grove failed to comply with prompt-notice provisions in its policies and, as a consequence, freed the insurers from paying the claims.
So there you have it: not one, but two stark reminders that if you snooze, you lose.
Zak Mendez is a CCIG Claims Advocate. Reach him at 720-212-2064 or Zakary.Mendez@thinkccig.com.
CCIG is a Denver-area insurance brokerage with the full-service capabilities of a national brokerage. We do more than make sure you have the right policy. We also help you manage your long-term cost of risk with our risk and claims management expertise and a commitment to service excellence.