Insurer on the hook for nearly $64,000 in home repairs following storm

An insurance company, based on the terms of its policy, is required to cover storm damage to the home of a northern Indiana couple, the Indiana Court of Appeals affirmed Wednesday. The insurer argued deteriorated shingles were the cause of the water damage in the home.

In April 2012, an 80-MPH windstorm hit Howe, Indiana, and caused damage to the home of Troy and Teresa Sams. Prior to the storm, they had no water leaks in the home; afterward, water seeped in the kitchen, living room, and other parts of the home, and mold began to grow. The wind damaged the exterior vinyl siding and tore shingles off the home’s multi-peaked roof.

The Samses filed an insurance claim with Erie Insurance Co. for all storm damage. The parties dispute whether the damage is covered under the Samses’ policy. Erie ultimately decided it would pay out only $3,436.69 for damages; under the Samses’ estimate, the total cost for repairs or replacement was nearly $125,000.

The insurer sought declaratory judgment that it had not further obligation on the claim; the Samses counterclaimed for breach of contract. The trial court found the insurance policy required coverage and used the estimates submitted by the parties to come up with an average amount of $63,924.89 for replacement costs.

The Court of Appeals agreed with the trial court that the amount of damages the Samses claimed were caused by the windstorm is supported in the record. The couple had no evidence of water leaks or damage prior to the storm. Their policy unambiguously covers losses to insured property caused by storm damage, and the COA rejected Erie’s claim that the deterioration and faulty materials exclusions apply.

Erie argued that the shingles on the roof were deteriorated and were the source of the water damage. But the policy language requires Erie to show the loss is caused by the deterioration, which it did not do.

The judges also pointed out that both parties had an opportunity to fully and fairly litigate the replacement cost issue. The trial court based its judgment on the evidence the parties introduced and the judge’s ruling is well within the evidence presented, the Court of Appeals held in Erie Insurance Exchange v. Troy Sams and Teresa Sams, 44A03-1403-CT-97.