Cosmetic Damage Exclusions & Property Litigation

Recently proposed property exclusions have created intense debates among agents, adjusters, insurers and insureds. As chaotic weather conditions across the country continue to rise, these exclusions claim to focus on the type of roof damage in an effort to circumvent coverage.  Essentially, what the insurer deems as “cosmetic damage” is excluded from coverage when/if the insurers choose to use this type of endorsement.

That’s where our client, BCD (a family partnership) needed our help. On June 6th, 2018 an intense hailstorm produced wind gusts over 59 miles per hour with massive hail, ultimately destroying windshields, skylights, roofs and other exterior structures on numerous homes and businesses throughout the Dallas area.

The following day, roof leaks began to appear causing water to visibly enter 3 of the 6 commercial properties BCD owns. The businesses impacted by the leaks reached out to their landlord, who promptly filed an insurance claim with Covington Insurance.

After filing the insurance claim with their provider, the insurer sent out an adjuster who reviewed the claim for roof leaks and cited “no damage” to any of the properties. When our clients rebuked the adjuster’s findings, the insurer sent a second adjuster who this time claimed the damage was minimal and fell under the deductible but for only one of the properties. Now befuddled and irritated with their insurance company’s confusing findings, BCD hired their own public adjuster. The insurer responded by sending out an engineer who did recognize the roof damage however he now claimed the damage was merely “cosmetic” in nature.

BCD and their public adjuster recognized what Covington was up to and promptly filed suit. Covington Insurance moved the case to Federal court where both parties were ordered to participate in an early mediation. At mediation, the case settled for more than 200 times the original under-deductible estimate written by Covington. Not only was our client delighted, but the public adjuster who they hired attended mediation and was also relieved to see the insured be fully indemnified. Now our client’s tenants could go back to running their businesses without the constant threat of interior leaks and roof damage disrupting their business operations.

A cosmetic damage exclusion means damage to external surfaces, including walls, roofs, doors, and windows that allegedly only impact the appearance (but not the functional purpose) may not be covered under the policy. These are things insurers consider ornamental or cosmetic and are usually very vaguely defined so that the insurer can tailor the damage as one being “merely cosmetic” to deny the claim.

Just because you have a cosmetic damage exclusion does not mean you are out of luck with your insurance claim. Our expert insurance litigation attorneys know how insurance companies operate and the tactics they employ to delay, deny, or underpay your property insurance claim. Our consultations are free, and you owe us nothing until we win your case. Contact us today.

Victory: Texas Jury Awards Damages To State Farm Policyholder Over Unfair And Deceptive Practices

Linda Veach first called her insurance company, State Farm, the day after a big and loud storm passed through Irving, Texas on June 6 of 2018. When she called to report her concerns, she was told that nobody from State Farm was going to come out and look at her house and that they did not think any damage was done. Trusting her insurance company, she accepted what she was told. When the damage to her seven-year-old roof was later pointed out to her by a neighbor, she looked for herself. She found the “dents” that were caused by hail. Linda called State Farm again, explained what she saw, and let them know that she really wanted them to look at her hail-damaged roof.

State Farm sent their adjuster. He spent about an hour going over the roof and inside of the home only to tell Linda that there was some damage to a flat part of the roof and a few other parts of the home. He left a few handwritten notices and a check for $549.95. Days later his actual estimate and partial denial letter came in the mail. The estimate did not match what was told by the adjuster. It included coverage for some hail-damaged items on the outside of the house and a few interior repairs. Not included in the estimate was any of the hail-damaged roof, not even the flat roof that Linda was told had hail damage.

Linda tried to handle things on her own, asking State Farm to take a better look, and even unsuccessfully trying to invoke the appraisal clause in her State Farm policy. Throughout the process, State Farm and its representatives played “gotcha” with her claim, raised technicalities against her, and refused to do the right thing. So, Linda hired the Chad T. Wilson Law Firm and a suit was filed against State Farm. 

Chad Wilson and Robert House of the Chad T. Wilson Law Firm fought to get answers and to protect Linda from these games. Along the way, they tried to get State Farm to resolve the case through negotiations and mediation. State Farm actively failed to do right by its policyholder at every step along the way. State Farm hired biased experts who said that there was no hail damage done to Linda’s roof, but instead what looked like hail damage was a product defect on the shingles. State Farm even tried to keep their full expert reports and other materials from their policyholder.

Through the four-day trial in United States District Court, it became clear that State Farm had all the information they needed to take the correct action on the date of the very first inspection. On August 26, 2021 the jury returned its verdict finding that State Farm failed to comply with its insurance policy, awarding all costs required for Ms. Veach’s repairs, and that State Farm engaged in unfair or deceptive acts or practices that caused damages to the plaintiff, awarding a little more than two times the costs for the repairs for those damages. Separate from the jury’s findings, the court will be asked to assess attorney fees and other costs against State Farm.

The jury told State Farm that it could not take advantage of its policyholders and hope they will go away silently and thanks to the Chad T. Wilson Law Firm, Linda Veach will be able to get the repairs done to her home and fix all the damage caused by the hailstorm.

In March this year, the Texas Supreme Court published its landmark opinion on another Chad T. Wilson Law Firm case – again, a client insured by State Farm, Luis Hinijos.  This was a huge win for all policyholders in Texas because it stopped all insurance companies from utilizing a carrier-created loophole to circumvent Texas law.  Here’s the typical scenario. An insured has a covered loss and notifies their insurance company.  The company would accept the claim and pay pennies on the dollar of the damages. The insured would complain but the carrier would not budge far from its initial position. The insured would then sue and the carrier, State Farm being the worst culprit, would run up litigation expenses. Appraisal of the damages would be invoked to set the cost to repair; the carrier would send a check for the appraisal award less the depreciation less the deductible less prior payments if any. The carrier would run back to the court and ask for summary judgment claiming “no harm, no foul judge” – and they were getting away with it. This left insureds economically upside down on their cases. The Chad T. Wilson Law Firm took Mr. Hinojos’s case to the Texas Supreme Court to stop this trend in its tracks. The Court agreed stating that an insurer is not absolved of its statutory liability when it pays only part of a claim within the statutory deadline set forth in the statute. An insurer that fails to pay all amounts that “must be paid” under the applicable policy will be liable for interest and attorney’s fees. On the street, this means if an appraisal award comes back higher than the insurance company’s initial estimate of damages, they owe the difference plus interest plus attorney fees and they are still on the hook for damages for violations of the Texas Insurance Code and Texas Deceptive Trade Practices Act. 

The Chad T. Wilson Law Firm handles insurance property disputes and takes on tough, serious cases against some of the largest corporations in America.

Huge Victory For Policyholders in Texas Supreme Court!

On March 19, 2021 the Texas Supreme Court issued its opinion in Hinojos v. State Farm Lloyds (No. 19-0280), in favor of Louis Hinojos, a client of Chad T. Wilson Law Firm. This was a huge victory for Texas policyholders. The Hinojos opinion will substantially assist policyholders to win Texas Prompt Payment of Claims Act (“TPPCA”) damages including interest and attorney fees after appraisal.

Before the Texas Supreme Court decided the case of Barbara Technologies Corp. v. State Farm Lloyds, 589 S.W.3d 806 (Tex. 2019), insurance companies could avoid all damages, including TPPCA damages, by simply invoking appraisal and paying the resulting appraisal award. This situation was patently unfair to Texas policyholders because the typical fact pattern was that an insurer would make a low initial claim payment, the policyholder would file suit, and during litigation (months or years after the date of loss) the insurance company would invoke appraisal and then pay the resulting award…an award that was always substantially more than the initial claim payment. The insurance company would then file a motion for summary judgment and get the policyholder’s entire case dismissed, including 18% interest under the TPPCA and attorney fees. However, Barbara Technologies held that an insurer may not avoid TPPCA damages by simply paying an appraisal award. Not surprisingly, the insurance industry quickly tried to find ways around Barbara Technologies. Using a portion of a string cite in the 5th Circuit case of Mainali Corp. v. Covington Specialty Insurance Co. 872 F.3d 255, 259 (5th Cir. 2017), insurance companies argued that as long as the initial claim payment was “reasonable” then even if the appraisal award ended up being much higher than the initial claim payment, policyholders were still unable to pursue TPPCA damages against the insurance company. For example, in the case of Shin v. Allstate Texas Lloyds, No. 4:18-CV-01784, 2019 WL 4170259, at *2 (S.D. Tex. September 3, 2019) Allstate argued and the court held that an initial claim payment that was 5.6 times less than the ultimate appraisal award was still “reasonable” and the court granted summary judgment for Allstate, which eliminated the policyholder’s damages under the TPPCA.

Thanks to the Chad T. Wilson Law Firm, the Texas Supreme Court closed the door on this ridiculous “reasonable” claim payment argument. Louis Hinojos is a homeowner in El Paso, Texas who purchased an insurance policy from State Farm Lloyds. On June 3, 2013 the Hinojos home was hit by a severe wind and hailstorm. Hinojos filed a claim with State Farm. State Farm timely accepted the claim and investigated it. The outcome of its initial adjustment of the claim was State Farm agreed to $755.02 in property damage, but because Hinojos had a $1,290 deductible, State Farm paid nothing. Hinojos requested a second inspection and State Farm agreed to $3,859.22 in damages then but paid $1,995.11 after the subtracting depreciation and the $1,290 deductible. Not satisfied with this result, Hinojos hired the Chad T. Wilson Law Firm and suit was filed. Some fifteen months after suit was filed State Farm invoked appraisal. The appraisal award came in at $38,269.95 replacement cost value and $26,259.86 actual cash value in property damage. State Farm paid $22,974.75 on the award, which was the replacement cost value minus depreciation, the deductible, and the prior payment. This payment was made some two and one-half years after Hinojos submitted his claim. After payment on the award, State Farm filed a motion for summary judgment arguing that timely payment of the award precluded Hinojos’ TPPCA damages. The Chad T. Wilson Law Firm argued that State Farm was subject to liability because State Farm had not made any payments within the timelines set out in Section 542.057 or that State Farm was liable for interest on the difference between what State Farm had paid on the claim and the amount of the appraisal award. The trial court granted summary judgment against Hinojos and the court of appeals affirmed two and a half years later. The Texas Supreme Court granted review.

Reaffirming its holdings in Barbara Technologies and Alvarez v. State Farm Lloyds, 601 S.W.3d 781 (Tex. 2020) (per curium) the Hinojos Court held that State Farm paying the Hinojos appraisal award did not preclude Hinojos from pursuing TPPCA damages against State Farm. Better still, the Court went further. Recognizing that insurance companies could initially make a nominal payment toward a valid claim and avoid TPPCA damages by later paying an appraisal award, the Hinojos Court held that to be reasonable the initial claim payment must “roughly correspond to the amount owed on the claim.” Therefore, in the future when an appraisal award comes in several times higher than the initial claim payment, the Texas policyholder can sue for TPPCA damages on the difference between the initial claim payment and the amount of the award. Not only will this opinion allow policyholders to secure TPPCA damages for underpaid claims after appraisal, but it should also incentivize insurance companies to make valid claim payments at the inception of the claim.

Since 2005 I have dedicated my practice solely to representing policyholders in first-party cases and contract disputes. Over the years I have attended countless industry events where this person or that person gets on stage and pounds their chest talking about what they can do for policyholders. It is one thing to talk about what you can do for policyholders, but it is another thing altogether to actually do something for policyholders. Chad T. Wilson Law Firm actually did something for policyholders. Because the system was not fair to policyholders, we kept fighting this case, even after losing at the trial court and the court of appeals. We took the case all the way to the Texas Supreme Court and we won! This Hinojos decision marks a great day for all policyholders. Thanks to Andrew Bender for his appellate work in this case and to Sharon McCally who made the argument before the Texas Supreme Court.

Hailstorm Damage Puts Faith in Question

The 2016 storm season was the most expensive storm season on record for Texas. On March 17th, 2016 Arlington, Texas experienced no less than six recorded hailstorms, the largest of which generated hail two-and-a-half inches in diameter. The hazardous weather system began Thursday morning, dropping huge pieces of hail and grounding flights out of DFW Airport. This was a monster storm that damaged many homes in the area, our client being one of those homeowners.

The roof damage was so severe that our client submitted a homeowners insurance claim through his insurance provider, State Farm. After filing the roof damage claim, the insurer sent out their adjuster who inspected the property damage and determined there was none or below our client’s deductible. Blindsided by his insurer’s stance, our client hired us and invoked appraisal for their case. The appraisal award came back at 80,000 times the amount of damages originally assessed by State Farm.

State Farm paid most of the award. To collect the remainder of the award and interest and attorney fees, our client pursued his insurer by filing suit, declaring his insurance company had acted in breach of contract and violation of Chapter 541 of the Texas Insurance Code, the Texas Deceptive Trade Practices Act (DTPC), and the Texas Prompt Payment of Claims Act (TPPCA). To guard their profits, insurers every so often commits deceitful practices, deliberately distort their policy language to avoid paying a claim, use absurd delays to avoid resolution of a claim, or make frivolous demands about proof of loss. This is called a bad faith insurance practice.

Our client’s insurer responded with a motion for partial summary judgment on all our client’s claims as a means of staving off breach of contract and TPPCA pursuits based on the Texas Supreme Court decision in Ortiz. State Farm argued that they had paid the award and therefore there was no breach of contract or extra-contractual claims left to pursue.

Is It Bad Faith, Bad Luck, or Both?

For the statutory bad faith claim to stick, our client had to show a breach of contract by his insurer. The insurer contends that a breach of contract is a prerequisite to statutory bad faith, yet policyholders argue a breach of contract is only a prerequisite to bad faith when the claim is not covered.

Generally, there can be no claim for bad faith when an insurer has promptly denied a claim that is not covered. However, failure to show a breach of contract does not alleviate a policyholder’s bad faith claims. What this means is the insured must show coverage, not a breach of contract. It is undisputed that our client’s claim under the policy was covered. The insurer did find damage, below the deductible when the claim was initially adjusted.

The only fair and rational analysis of the law that does not offend common sense or public policy is one that preserves an insurer’s responsibility to deal with an insured in good faith when the insured’s claim is covered. Our client’s insurance providers manipulation of the law would allow them to ignore their responsibility and systematically delay, deny, or underpay insurance claims until the insured hires an attorney and sends a pre-suit notice letter suing for breach of contract and bad faith, then to simply invoke appraisal, pay the award, and weaken the insurer’s contractual liability but also its statutory liability for bad faith acts and the adjustment process.

At the hearing, our attorneys argued the above and pointed out that an appraisal award that is 80,000 times higher than the amount first assessed by State Farm, and the unilateral (line-item veto) of certain damages in the award, amounted to breach of contract and bad faith. The court agreed and denied State Farm’s summary judgment on all grounds.

Texas Property Insurance Lawyers

Has your homeowner’s or commercial business insurance claim been denied? We can help. Representing thousands of clients against big insurance companies, our insurance claims attorneys aggressively protect the rights of the policyholder. Our consultations are free, and you owe us nothing until we win your case. Contact us today.

Twice Denied Homeowners Insurance Claim Leads to New Roof

Property damage may include damage to your home, your patio furniture, your fence, your mailbox, or any other belonging to your property. How much you may be able to recover for your property damage can be determined by proof of replacement value, repair costs, the inability of use until fixed or replaced.

Having a roof insurance claim denied is common. Luckily, a roof damage claim denial does not have to be the last word. Understanding the insurance claim process and how to challenge an insurance denial is a valuable skill for every homeowner. In most situations, your homeowner’s insurance covers roof damages due to a storm. You can expect a claim rejection letter if the peril is excluded by your homeowner’s insurance policy. Knowing what your homeowner’s insurance policy excludes is very important. Some standard homeowners insurance policies (HO-3) cover common disasters, but not everything. Some insurance policies have separate wind and hail damage deductibles. Make sure to read your policy carefully to understand what damage is covered.

It Was the Other Storm’s Fault

In the spring of 2016, the Spring, Texas area experienced a wind and hail storm that damaged the roof and exterior of our clients’ home. Our clients, one a 40-year plus emergency room nurse, filed a homeowners insurance claim with their insurer who sent out an adjuster who wrote the damage off as minimal and failed to cover the damage to the roof. The adjuster claimed the roof damage was less than $1000 and under the deductible, even though other houses in the neighborhood received new roofs due to the wind and hail damage. Our clients trusted the results the insurance company provided them with and did not pursue any action after the initial insurance claim denial.

Then came Hurricane Harvey a year later and the roof leaks that followed. Our clients filed another homeowners insurance claim to which their insurance company responded by sending out another adjuster, who came back telling them the roof leaks were a result of previous damage and/or wear and tear, not the storm. That meant the insurance company most likely misrepresented the scope of damages during the first claim back in 2016. Having experience with one denied homeowners insurance claim already, our clients called us to take their case. Our own third-party adjuster concluded the damage from the hailstorm in 2016 that went unrepaired was exacerbated by Hurricane Harvey and ultimately the fault of the insurance company for not fixing the repairs before the hurricane’s impact.

Bad Faith Insurance Claim Seeks Redemption

If the insurance company had fixed the repairs to the home from the initial claim, the damages inflicted during Hurricane Harvey would have been reduced or less severe. We filed suit and sent a demand letter to the insurance company, who settled at mediation with us and provided the funds for the repairs to the exterior of the home as well as a brand new roof for our clients.

Because an insurance company has an obligation of good faith and fairness with the people it insures, those who believe an insurance company has not acted fairly and in good faith also can have a claim for common law bad faith and statutory violations. The Texas Insurance Code also provides the rules for how insurers must behave towards policyholders.

Houston Property Insurance Lawyers

Has your homeowner’s or commercial business insurance claim been denied? We can help. Representing thousands of clients against big insurance companies, our insurance claims attorneys aggressively protect the rights of the policyholder. Our consultations are free, and you owe us nothing until we win your case. Contact us today.

Homeowner’s Insurance Claim Gets Back On Track

Have you had storm damage and are now struggling with a homeowner’s insurance claim?

Storm damage hits Mineola, Texas, a small community in Wood County about 80 miles east of Dallas. Mineola is a railroad town and can trace its roots back as far as 1873. With a population just under five-thousand, life in this small Texas town tends to move at a slower pace. Some insurance companies prey on these areas. Such was the case for our clients, whose home was savagely beaten by the hailstorm the night of June 19, 2019 when their home was damaged. The homeowner’s insurance claim was initially denied.

We Will Not Be Railroaded

That night hail pounded Wood County, dropping hail the size of golf balls in some areas. The roof damage to our client’s home was so severe that rainwater had penetrated through the damaged portions of the roof and saturated sheetrock and carpeting throughout the home.

After completing a homeowner’s insurance claim with their insurer, our clients’ claim was denied. Refusing to accept a denial as the outcome, our clients’ pleaded with their insurer. The insurance company in turn sent out an engineer to inspect the roof damage. The engineer’s assessment was that the property damage should be covered under the homeowner’s insurance claim, but the amount of the damage was under the deductible.

Insurance Company Has One Track Mind

Knowing that they were in for a hard fight if they wanted any form of recovery, our clients hired us to represent them. The Chad T. Wilson Law Firm sent our clients’ insurer a demand letter that let the insurer know our client’s were serious about their claim. Upon receiving the demand letter, the insurer reversed course and agreed to pay for the roof and interior damage.

Homeowner’s Insurance Claim Gets Approved

From start to finish, this case was resolved in 30 days. There was no need for mediation or court.

Texas Property Insurance Lawyers

Has your homeowner’s or commercial business insurance claim been denied? We can help. Representing thousands of client’s against big insurance companies, our insurance claims attorneys aggressively protect the rights of the policyholder. Our consultations are free, and you owe us nothing until we win your case. Contact us today.

Windstorm Rips Through Plano

June 9th, 2019 was a rough day in North Dallas. The region experienced powerful windstorms that toppled a crane, caused extensive damage to crops, and killed a young woman in Dallas. The massive amounts of ping pong ball-sized hail caused considerable roof damage to numerous properties and left thousands without power. Our client, a longtime resident of Plano, Texas was one of the many homeowners impacted by the storm.

Up, Up, And Away…

Weather reports show average wind speeds during the daylight hours at a whopping 70 miles per hour. Plano saw many of its power poles and large trees knocked down by the winds. Large tree limbs with a circumference of 6 inches are larger broke under the tremendous winds, creating considerable damage on their way down. At our client’s property, the windstorm built up enough pressure to tear the chimney off the roof, ultimately smashing down onto the cab of our client’s neighbors’ truck. Some minor water damage did occur due to the hole in the roof where the chimney used to be. The bulk of the windstorm damage happened to the outside of the home.

Experience Makes Satisfied Clients

Our client was compelled to hire us to represent them and mitigate the property damages that happened to the roof and interior of the home. We were able to hold the insurance company accountable for their role in processing our client’s claim and made them honor their contract with the insured. With a new chimney shroud and no water leaks through the roof, our satisfied client is now enjoying the closure and payout that comes from hiring one of our experienced insurance claims attorneys.

Houston Property Insurance Lawyers

We can help with your homeowner’s insurance claim denial. Our experienced property insurance attorneys have represented more than 1,000 clients in cases against insurance companies and aggressively protect the rights of insurance policyholders. Consultations are free. Contact us today.