Hail Roof Damage Claim Denied After Allstate Points To 'Cosmetic Exclusion' Amendment; Homeowners Win In Court
SAN ANTONIO (CBSDFW.COM) - After a major hail storm in 2016, Peter and Nancy Reininger figured their homeowners insurance would cover the cost to replace their damaged roof.
The larger than three inch hailstones left dents, scrapes, and damaged the protective finish on their roof.
"This is why you have insurance," said Nancy Reininger. "You're paying your premiums so you think everything is going to be covered."
But Allstate denied their claim pointing to an amendment in their policy that the Reiningers said was never disclosed to them.
Like many Texas homeowners with a metal roof, the Reiningers have a "metal roof surface cosmetic damage exclusion endorsement" in their policy. The endorsement states "cosmetic damage cause by hail to a metal roof surface" is not covered.
"I was flabbergasted," Peter Reininger said when he was told about his policy's exclusion. "I couldn't believe it. I couldn't believe it."
The Reiningers sued Allstate for fraud claiming the insurance company deliberately failed to disclose the cosmetic roof exclusion on their policy before selling it to them.
In March, a Bexar County jury reached a $1.5 million verdict in favor of the Reiningers.
When the jury was asked, 'Did Allstate commit fraud?' According to court records, the jury answered 'yes'.
According to the lawsuit, when the Reiningers signed up for homeowners insurance with Allstate, their insurance agent sent them an email with an attached document labeled "home policy".
The Reiningers said they thought this was their policy. The document listed the policy's coverages which included their metal roof. Nowhere in the document is any mention of the roof cosmetic exclusion.
Peter said. "I spoke with the agent and asked, 'Do I have hail damage for the metal roof?' He said, 'yes.'"
The Reiningers paid their premium only later discovering the document they said their agent referred to as their "home policy" was not their full official policy.
Their 60-page official policy Allstate posted online after the Reiningers paid their premium.
On page 39 of the official policy is the metal roof cosmetic coverage exclusion.
The Reiningers said the exclusion was never disclosed to them in their insurance quotes or application.
"They slipped the exclusion in there after we paid our premium," Peter Reininger said.
During a court deposition, an Allstate representative testified the Reiningers at any time could have accessed their policy online and could have seen the coverage exclusion.
When the CBS 11 I-Team reached out to Allstate, the insurance company said it could not answer any our questions.
In a written statements, a company spokesperson wrote, "At Allstate, we're committed to handling all claims in a timely and fair manner, including Mr. Reininger's claim. At this time, we cannot comment on the specific details of this case, as litigation is still ongoing."
The Reiningers' attorney, David Bergen, said, "This was a scheme that was set up from the very beginning to make sure these people had no idea what they were buying."
Bergen and fellow attorney James Willis from the firm Daly and Black said they believe this is not an isolated case. They have other clients with similar cases.
Plus, there's been formal complaints filed with Texas Department of Insurance from other Allstate policy holders writing they too were not told about the cosmetic exclusion.
Willis said, "Our concern is that this can happen to any Texas homeowner and they don't even know it's about to happen to them until after storm and long after they've paid their premium to Allstate."
What the Reiningers said is especially frustrating is they said the damage to their roof is far more than just cosmetic. They said the hail caused their roof to rust and now when it rains, it leaks.
"We wanted our roof fixed," said Peter Reininger. "That's all we wanted."
Despite the $1.5 million verdict, the Texas couple has not yet received any money to repair their roof.
Allstate would not say if it plans to appeal the verdict.