There is a recurring issue in property insurance disputes that deserves more attention. Many policyholders and sometimes their representatives believe they understand what caused the loss. The timeline fits. The damage is real. The explanation seems logical.
But in court, what matters is not what seems logical. What matters is what can be proven with admissible evidence.
A recent federal court decision out of Illinois is a good reminder of this point. 1 The policyholders claimed that a storm caused a power outage and surge, which damaged building systems and ultimately led to significant losses. That theory was reasonable. In fact, several people involved in the property’s operation believed that’s what happened. The problem was proof.
The court never reached the policy exclusions. It never needed to. The case ended because the policyholders did not meet their initial burden of proving that a fortuitous event caused the damage.
There are three important lessons from this decision that apply to many property insurance claims. First, causation experts are often necessary, especially in technical losses. When a claim involves electrical systems, power surges, or equipment failure, and lightning, the cause of loss is not something a court will accept based on general observations. An electrical engineer and a meteorologist are typically retained to explain how a specific event caused the damage. Without that connection, the claim lacks a critical foundation.
Second, first-hand knowledge matters. The witnesses relied upon in this case were not present at the time of the event. They learned about it afterward and described what they had been told. That type of testimony may be useful during an investigation, but it often does not hold up in court. Judges and property claims adjusters look for testimony based on personal observation, not second-hand information.
Third, hearsay can quietly undermine a case. It is common for information to pass from one person to another in claims. For example, a tenant tells a manager, the manager talks to a contractor, the contractor speaks to the adjuster. Over time, the story can sound consistent and reliable. But if no one with direct knowledge says what happened and what was seen, the court may not consider that information at all. Consistency does not make evidence admissible.
These lessons are especially important when causation will be questioned. To move forward successfully, the claim must be supported by a complete and provable chain of what happened, how it affected the property, and how that event caused the specific damage being claimed. If any part of that chain is missing or based on assumption rather than proof, the case becomes vulnerable.
This does not mean that the policyholder’s understanding of the loss is wrong. It means that the claim must be prepared and supported in a way that cannot be challenged and meets legal standards. That often requires early involvement of qualified experts, careful identification of witnesses, and attention to how evidence will be used. Do the facts rather than assumptions provide the verification needed for the claim to be paid?
These steps are not just for trial. They should be part of the claim process from the beginning. The earlier causation is properly evaluated and documented, the stronger the claim will be if it is challenged.
The goal is not to make claims more complicated than they need to be. The goal is to make sure they are supported in a way that allows them to succeed when tested.
For those working on Texas insurance claims, I strongly suggest studying “Causation in Texas Is Not a Guessing Game and Critical for Recovery.” Ohio places such an emphasis on experts that eye witness testimony could possibly be excluded, as noted in Experts Regarding Causation Can Be More Important Than Witnesses — Or, Don’t Believe Your Lying Eyes When Your Insurance Company Hires an Expert.
Thought For The Day
“In God we trust; all others must bring data.”
— W. Edwards Deming
1 Garfield Aurora I, LLC v. Greater New York Mut. Ins. Co., No. 21 C 5582 (N.D. Ill. Apr. 2, 2026). See also, Policyholder’s Motion for Partial Summary Judgment, and Insurer’s Motion for Summary Judgment.
