Depending on the nature of the loss and damages to property involved in insurance claims, the damage investigation can be expert intensive. Engineers or other structural experts can play a necessary and vital role in proving the cause of some types of damage. Having a qualified expert to give an opinion as to cause and origin of damages in certain claims is a corner that cannot be shortcut on behalf of the policyholder to achieve the recovery they are entitled to. The insurance industry certainly does not cut that corner as a recent case demonstrates.1

The case from New York involved a claim from Tropical Storm Irene. The policyholder submitted a claim for damages to the insurer, it refused to pay, and the lawsuit followed. In the court case, the insurance carrier contended that the damages claimed existed long before Tropical Storm Irene and the damages were not covered by the policy. The insurance carrier filed a motion with the judge requesting that he enter a summary judgment in its favor; essentially arguing it was undisputed the damages pre-existed Tropical Storm Irene and the policyholder could not point to factual evidence to the contrary that would require a jury trial.

The insurance carrier had the following information in support of its position in the case:

  • a complaint received by the town before Tropical Storm Irene of a huge crack on the outside of the building; an affidavit from an employee that worked in the building;
  • an independent insurance adjuster’s affidavit;
  • an affidavit from an engineer; and
  • an interview of the policyholder’s principal where he admitted that he had not performed any exterior repairs to the building in twenty years.

In response to the insurance carrier’s arguments, the policyholder presented an affidavit of its attorney and its managing member which stated that the building sustained wind damage from Tropical Storm Irene and that the building was maintained before and after the loss. The Court noted there was no affidavit or information submitted by the policyholder from an expert.

The Court said the evidence by the policyholder is insufficient to raise an issue of fact about the cause of damages to get to a trial. When the moving party presents expert evidence in support of its position that the damages were not caused by the loss event, the non-moving party has to lay out their proof in evidentiary form showing the issues that are necessary to be tried as issues of fact. For example, the disagreement between the sets of experts as to the cause of the damages could be an issue of fact that would warrant a trial and prevent the case from being decided at summary judgment by a judge.

The Court granted the insurance carrier’s motion holding that there were no issues requiring a trial by the jury. The point of this harsh story for policyholders is to have the necessary experts in place to give opinions on the cause of damage, particularly if the other side has these experts and there is a dispute about the cause of the damage. Bill Parcells once said about winning in football:

Just get to the dance and see what happens.

Don’t miss the “dance” in the context of the damages in insurance claim cases by short-cutting this corner and making the wrong turn.

1 181 South Franklin Associates, Inc. v. Great American Ins. Co. of New York, 2013 NY Slip Op 51534(U), 2013 WL 5226398 (N.Y. Supp. July, 17, 2013).