Refusal to Buy Coverage Defeats Suit
Barry Zalma
Sep 29, 2023
Read the full article at https://lnkd.in/gHganPZT and see the full video at https://lnkd.in/gH_FQVyZ and at https://lnkd.in/geWvCzk6 and https://zalma.com/blog plus more than 4600 posts.
In Texas Windstorm Insurance Association v. Kevin Kelly and Tiffany Kelly, No. 09-22-00173-CV, Court of Appeals of Texas (September 21, 2023) the Texas Windstorm Insurance Association’s (TWIA) appealed from an order granting Plaintiffs’ summary judgment and denying TWIA’s summary judgment motion.
THE STATUTE
Section 2210.208 of the Texas Insurance Code requires an offer of Windstorm and Hail Insurance policies issued by TWIA to include coverage for wind-driven rain. Coverage may be made available through an endorsement that requires the insured to pay an additional premium to the carrier to compensate the carrier for insuring against the additional risk of covering the property against the casualty of being damaged by wind-driven rain.
BACKGROUND
The Kellys live in Port Arthur, Texas. In 2017, the Kellys purchased a windstorm and hail insurance policy from TWIA through their insurance agent to cover their residential property. The policy insures the property against direct loss resulting from the perils of Windstorm and Hail only. The policy specifically excluded the following loss to the covered property: “6. Rain. We do not cover loss or damage caused by or resulting from rain, whether driven by wind or not, unless direct force of wind or hail makes an opening in a roof or wall and rain enters through this opening and causes the damage.”
The Kellys’ home was damaged by Hurricane Harvey on or about August 29, 2017. On September 1, the Kellys’ filed a notice of claim with TWIA. The adjuster hired by TWIA made the following findings:
1 the Kellys’ property sustained covered damage to the garage door tracks,
2 damage to the roof was not caused by wind or hail, and
water damage to the interior of the property did not result from a wind or hail created opening in the roof or walls, as required for coverage under the policy.
TWIA issued a Notice of Claim Acceptance in Part and Denial in Part, accepting coverage for damage to the tracks on the detached garage but denying coverage from rainwater intrusion.
TWIA filed an unsuccessful motion for summary judgment.
The dispute centered on whether the “must include coverage for” clause is satisfied by TWIA’s offering their insureds the opportunity to purchase a Department of Insurance approved endorsement, which extends the basic coverage in TWIA’s windstorm and hail policy to damages caused by wind-driven rain.
The trial court found that the TWIA policy issued to the Kellys improperly and ineffectively omits coverage for wind driven rain damage.
ANALYSIS
The Court of Appeal construes statutory language to determine and give effect to the Legislature’s intent. The Court must not interpret the statute in a manner that renders any part of the statute meaningless or superfluous.
TWIA argued that it complied with the Act by offering to cover losses caused by wind-driven rain through an endorsement to the basic windstorm and hail policy that it issued to the Kellys, an endorsement the Kellys did not obtain.
The Act imposes no non-compliance penalty on TWIA but instead allows it to comply with the statute by offering its insureds the opportunity to obtain an endorsement that covers damage caused by wind-driven rain by paying an additional premium approved by the commissioner when purchasing a windstorm and hail policy.
The Court of Appeals’ reading of the statute supports the policy that led to the enactment of the windstorm statute. Under well-established rules of statutory interpretation, an appellate court may not interpret one portion of a statute so as to render another portion of the statute meaningless.
Accordingly, the Court of Appeals concluded that TWIA complied with the requirements of the statute by offering the Kellys the opportunity to obtain coverage for damage caused by wind-driven rain through the purchase of an endorsement that, if purchased, would have provided coverage for losses caused by wind-driven rain.
The Court of Appeals reversed the trial court’s Order granting summary judgment in favor of the Kellys and reversed the trial court’s Order denying TWIA’s summary judgment.
ZALMA OPINION
Statutes requiring insurers to provide various types of insurance must be read in a manner to provide the desires of the Legislature and not provide less or more than that required by the statute. TWIA followed the statute by offering an endorsement providing wind driven rain coverage, which it offered to the Kellys’ only to have them refuse the coverage and then, when damaged by wind driven rain, attempted to cure their error by litigation misinterpreting the statute. They received the coverage they paid for and did not receive the additional coverage for which they refused to pay.
(c) 2023 Barry Zalma & ClaimSchool, Inc.
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Subscribe to Excellence in Claims Handling at locals.com at https://zalmaoninsurance.locals.com/subscribe or at substack at https://barryzalma.substack.com/publish/post/107007808
Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01
Follow me on LinkedIn: http://www.linkedin.com/comm/mynetwork/discovery-see-all...
Daily articles are published at https://zalma.substack.com.
Go to the podcast Zalma On Insurance at https://podcasters.spotify.com/pod/show/barry-zalma/support; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – http://zalma.com/blog/insurance-claims-library/
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Subscribe to substack at https://lnkd.in/gcZKhG6g
Go to Rumble.com at https://lnkd.in/gV9QJYH; Go to Barry Zalma on YouTube- https://lnkd.in/g2hGv88; Go to the Insurance Claims Library – https://lnkd.in/gYq44VM
Policy Limits Demand Accepted Settles Claim
Post 5434
Posted on August 26, 2026 by Barry Zalma
See the full video at https://lnkd.in/g-ZtsSgK and at https://lnkd.in/ghMBdYWR
A Contingent Offer Accepted Ends the Dispute
In Farmers Insurance Exchange, a California Reciprocal Insurance Exchange, The Superior Court For The County Of San Bernardino, Kathleen Ann Wood, E087128, California Court of Appeals, (July 9, 2026) Farmers Insurance Exchange insured Doyle Archer under an automobile policy with bodily injury limits of $15,000 per person and $30,000 per accident.
FACTUAL BACKGROUND
Archer rear-ended Kathleen Ann Wood at a red light, causing Wood to assert a bodily injury claim against him. Wood’s counsel sent Farmers a pre-litigation settlement demand offering to resolve Wood’s claim for the available policy limits, stating that if the $100,000 demand exceeded the policy, the offer was for the policy limits.
Farmers timely responded in writing, agreed to pay Wood the $15,000 per-person policy limit, and provided the requested ...
Policy Limits Demand Accepted Settles Claim
Post 5434
Posted on August 26, 2026 by Barry Zalma
See the full video at https://lnkd.in/g-ZtsSgK and at https://lnkd.in/ghMBdYWR
A Contingent Offer Accepted Ends the Dispute
In Farmers Insurance Exchange, a California Reciprocal Insurance Exchange, The Superior Court For The County Of San Bernardino, Kathleen Ann Wood, E087128, California Court of Appeals, (July 9, 2026) Farmers Insurance Exchange insured Doyle Archer under an automobile policy with bodily injury limits of $15,000 per person and $30,000 per accident.
FACTUAL BACKGROUND
Archer rear-ended Kathleen Ann Wood at a red light, causing Wood to assert a bodily injury claim against him. Wood’s counsel sent Farmers a pre-litigation settlement demand offering to resolve Wood’s claim for the available policy limits, stating that if the $100,000 demand exceeded the policy, the offer was for the policy limits.
Farmers timely responded in writing, agreed to pay Wood the $15,000 per-person policy limit, and provided the requested ...
The Largest Residential Burglary of All Time
Post 5407
Fraud & the Fear of Bad Faith Suits
Posted on July 22, 2026 by Barry Zalma
See the full video at https://lnkd.in/gWQQEySW and at https://lnkd.in/gyhdK6wv
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection designed to help to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime.
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection designed to help to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime.
After ...
Insurance Requires Fortuity to be an Insured Risk
Post 5485
Posted on September 8, 2026 by Barry Zalma
In Industrial Park Center, LLC, doing business as Mainspring Capital Group v. Great Northern Insurance Company, a foreign insurer, No. CV-25-0330-CQ, Supreme Court of Arizona (September 1, 2026).
The United States Court of Appeals for the Ninth Circuit certified the following question to this Court:
"Is damage to property a “fortuitous” loss when, based on the insured’s knowledge at the time the insurance policy issued, it was reasonably foreseeable that such damage was almost certain to occur if certain preventative measures were not taken?"
FACTUAL BACKGROUND
Mainspring owned commercial property leased to Star Fisheries for decades. Star Fisheries’ use of water and salt allegedly caused structural damage over time. In 2010, Mainspring learned of damage and made some repairs but did not implement all recommended preventive measures. In 2021–2022, additional similar structural damage was discovered, and ...
Qui Tam Relators are not officers of the United States
Posted on September 4, 2026 by Barry Zalma
Attempt to use Constitution to Stop a Qui Tam False Claims Act Case
Post 5486
FCA’s Qui Tam Provisions do not Violate the Appointments Clause.
In United States Of America, Clarissa Zafirov, ex rel; Dr. v. Florida Medical Associates, LLC, d.b.a. Vipcare, Physician Partners, LLC, Anion Technologies, LLC, Freedom Health, Inc., Optimum Healthcare, Inc., Physician Partners Specialty Services, LLC, et al., No. 24-13581, United States Court of Appeals, Eleventh Circuit (September 1, 2026).
The False Claims Act (“FCA”) allows the Attorney General to bring civil suits against perpetrators of fraud against the government. This case involves another portion of the FCA-the qui tam provisions-which allow people, called relators, who have knowledge about fraud against the government to pursue a case against the perpetrator of the fraud.
Dr. Clarissa Zafirov filed a qui tam action under the False Claims Act on behalf of...
Posted on September 3, 2026 by Barry Zalma
You Only Get One Chance to Sue
Post 5484
In David Cromp v. Johnny Harkrider, Monique Harkrider, and their Marital Community, dba Able Plumbing Plus, No. 61678-5-II, Court of Appeals of Washington, Division 2 (August 25, 2026) David Cromp hired Able Plumbing Plus in 2018 to install plumbing, including two toilets, at his residence. In 2019, both toilets allegedly leaked, causing damage. Insurance claims were submitted through Able’s contractor policy, but the insurer eventually denied the claims.
Cromp sued Able in 2022 for breach of contract based on the allegedly defective toilet installation. During that case, Cromp attempted to add claims related to Able’s conduct during the insurance claim process, including fraud, bad faith, tortious conduct, and bond-related claims, but the superior court denied leave to amend. The 2022 breach-of-contract claim was later dismissed with prejudice on summary judgment as time-barred.
On the same day the 2022 case was dismissed, Cromp filed a ...
