Background
Dora Doss Thompson sued State Farm Lloyds for failing to pay a claim for hail damage to her roof in Cypress, Texas. Thompson had insured the home since 2007, with annual renewals. After a contractor reported damage from a September 2021 storm, State Farm inspected the property and found no hail damage to the roof, estimating covered damage well below Thompson’s deductible. Thompson invoked the appraisal process, which resulted in a higher valuation, but State Farm maintained that the loss did not exceed the deductible and was not covered. Thompson filed suit in state court, which State Farm removed to federal court. The district court granted summary judgment to State Farm, and Thompson appealed.
The court’s reasoning
The court reviewed the summary judgment de novo and agreed with the district court that Thompson failed to meet her burden under Texas law. The court explained that renewing an insurance policy creates a new, separate contract for each one-year period unless the parties clearly intend otherwise. Because Thompson could not identify which specific policy period the loss occurred under, and the record lacked direct evidence tying the damage to a specific storm within a covered period, she failed to establish a covered loss. The court noted that while hail damage can be difficult to date, the fact of damage alone is insufficient without evidence linking it to a covered time period. Additionally, the court held that Thompson’s extra-contractual claims for bad faith failed because she had not alleged an independent injury beyond the breach of contract claim.
What it means going forward
This ruling reinforces the requirement for insureds to provide specific evidence linking damage to a covered policy period, even when damage is discovered later. It clarifies that annual renewals create distinct contracts, preventing insureds from treating a long history of coverage as a single continuous policy to satisfy timing requirements.
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