Court Orders Appraisal Process in Hail Damage Dispute
Charter Oak Fire Insurance Co., a subsidiary of Travelers Cos. Inc., is embroiled in a breach of contract lawsuit stemming from its denial of a claim for hail damage. After an independent assessment, the damage was estimated at $10.5 million. The case, filed in the U.S. District Court for the Western District of Tennessee, alleges that the commercial policyholder promptly submitted a claim following a 2023 hailstorm that struck its property.
Charter Oak initially acknowledged the claim and assigned it a claim number. The company conducted an inspection of the property before ultimately denying coverage, according to the lawsuit. Following the denial, the policyholder provided a third-party estimate that totaled $10.5 million. This figure included costs for repairs, remediation, construction, mitigation, and cleaning services. The suit contests the denial, claiming it was inconsistent with the policy language, which provides an option for either party to request an appraisal.
The plaintiff is now requesting the court to mandate that Charter Oak enter into the appraisal process. The lawsuit also seeks compensatory damages, with the specific amount to be determined at trial.
Recent Legal Challenges for Travelers
Travelers has faced multiple legal challenges and lawsuits recently. In November of last year, a Missouri state court jury ruled that Travelers must pay $37.9 million for refusing to cover an $11 million wrongful conviction settlement. This case involved Ryan Ferguson, who was wrongly convicted of murder. Ferguson later sued the city of Columbia and its police officers. Travelers, which insured the city, declined to cover the settlement, resulting in the verdict against the company.
Also in November, the state of New York fined the company $1.55 million. The fine was for cybersecurity deficiencies that led to a data breach, impacting approximately 4,000 individuals. The data breach stemmed from hackers exploiting vulnerabilities in Travelers’ online quoting tool, giving them access to sensitive personal information. Travelers has since committed to strengthening its cybersecurity measures.
