Dallas Fort Worth Insurance Lawyer Blog
Hail damage claims are a frequent source of litigation. There are many reasons an insurance company will deny a claim. One of those reasons is that the hail damage did not occur while the insurance policy was in effect. This issue is discussed in a January 2025 opinion from the Northern District of Texas, Dallas Division. The opinion is styled, H5R, LLC v. Scottsdale Insurance Company a/k/a Nationwide Insurance. This is a summary judgment opinion.
H5R discovered a water leak inside one of its single family homes in February 2021, and immediately reported the loss. Scottsdale denied the claim in a letter dated June 17, 2022, for the stated reason that the policy coverage date was December 18, 2020 through December 18, 2021.
H5R contends the Property was damaged by hail during the insurance policy period – a covered loss event – and that Scottsdale Insurance’s “failure to pay a covered loss is breach of an insurance contract.”
Texas law places the burden of establishing coverage upon the insured, the burden of establishing an exclusion upon the insurer, and the burden of establishing an exception to an exclusion back upon the insured.
Under Texas law, proof that the claimed losses occurred during the policy period is an essential element of an insured’s coverage claim on which it bears the burden of proof.
H5R must come forward with evidence that the damage to the Property was caused by a hail event during the policy period, and not another event occurring outside the policy period.
H5R contends that Scottsdale’s expert report indicates that 3/4-inch hail occurred at the Property as recently as March 24, 2019, and 3/4-inch hail occurred within a mile of the Property as recently as August 16, 2020.
And H5R asserts that Scottsdale’s expert report by G. Horne, PE, which states that “many of the holes in the roof were consistent with impact from hail,” and accompanying photos evidence that that the Property was damaged by hail.
But H5R is unable to create a fact issue because it fails to provide factual support linking the alleged damage to the hail events described above.
H5R claims that Scottsdale Insurance “ignores the deposition testimony by Terry Moore, an uncompensated construction expert designated by H5R, who agreed with Scottsdale’s experts that the damage was caused by hail.”
H5R states that “there is no evidence, and Scottsdale does not point to summary judgment evidence, that the hail damage occurred prior to December 18, 2018 – the date that Scottsdale admits that its coverage
began.”
But this argument is misplaced because H5R – not Scottsdale Insurance – carries the burden of proving a covered loss during the policy period.
And, according to the unrebutted evidence from Scottsdale’s designated expert Eric Moody’s report, “the expert Report confirmed that no hail was associated with the winter storm event of February 2021,” and “to the extent that any of the noted distress in the corrugated cementitious tile roof was related to hail it is more probable than not that it occurred on May 24th, 2011.”
Assuming H5R came forward with evidence that the damage to the Property was caused by the identified hail events in March 2019 or August 2020, both dates fall outside the policy period shown in the Policy’s Declarations and implicated in this suit: December 18, 2020 to December 18, 2021.
H5R has provided no supporting evidence or testimony that the alleged Property damage was caused by a hail event during the policy period from December 18, 2020 to December 18, 2021.
And, so, H5R has failed to satisfy its burden of demonstrating that a covered loss occurred during the policy period. Entitled to summary judgment.