The Claim Attorney - Blog #Insurance Claims

Wear and Tear Denials in Texas Property Insurance Claims

Thu, 05 Sep 2024 21:09:09 +0000

📘 The Policyholder’s Playbook: Wear and Tear in Real Claims

An insurance policy is a contract, and every word in it matters. Texas courts read ambiguous exclusions in the policyholder’s favor. Knowing how the “wear and tear” exclusion actually works is the first step to challenging a denial that relies on it.

What “wear and tear” actually means

Most Texas homeowners and commercial property policies exclude loss caused by wear and tear, deterioration, and similar gradual conditions. In plain English, that is the normal aging of a building:

Paint fading over time
Minor settlement cracks
Roof shingles gradually shedding granules

That exclusion is legitimate. Insurance is not a maintenance contract. But property policies are written to cover sudden, accidental physical loss. When hail bruises shingles, wind lifts and creases them, or a supply line suddenly fails, that is new damage, even if the building is not new.

How the exclusion gets stretched

Before becoming a lawyer, I worked as a public adjuster and contractor. In that work I saw “wear and tear” used to explain away damage that had a clear storm-related cause, including:

Wind-creased shingles attributed to “improper nailing”
Fresh hail impacts described as “granule loss” or “age-related deterioration”
Storm-broken windows blamed on “thermal stress” or a “pre-existing weakness”

Not every denial is wrong. But a denial letter is the insurer’s position, not the final word.

Phrases to watch for in a denial letter

“Normal wear and tear”
“Wear, tear, marring, or deterioration”
“Long-term seepage or leakage”
“No storm-created opening”
“Pre-existing damage”

Each of these signals that the carrier is relying on an exclusion or limitation rather than disputing that a loss happened. Under Texas law, that distinction matters.

Who has to prove what in Texas

Texas uses a burden-shifting framework. The policyholder first shows that the loss falls within the policy’s coverage. The insurer then has the burden to prove that an exclusion applies; Texas Insurance Code § 554.002 treats exclusion language as an avoidance or affirmative defense that the insurer must prove. If the insurer carries that burden, the policyholder can still show that an exception to the exclusion restores coverage.

The catch is segregation. When covered damage (for example, hail) and excluded damage (for example, wear and tear) are both present, Texas courts generally require the policyholder to show how much of the damage the covered event caused. Failing to separate the two can defeat an otherwise valid claim, which is why careful, early documentation matters so much.

Steps policyholders should take

Document everything. Keep photos, video, dates, weather data, and prior repair or maintenance records.
Get the decision in writing. Texas law requires an insurer that rejects a claim to give its reasons.
Get an independent inspection. A qualified roofer, engineer, or licensed public adjuster can distinguish storm damage from aging and describe the difference in writing.
Read your actual policy. Request a complete copy, including every endorsement. Exclusions, exceptions, and anti-concurrent-causation wording vary from form to form.
Watch your deadlines. Many policies shorten the time to sue (Texas does not allow a contractual period shorter than two years), and Texas generally requires written notice at least 61 days before suit is filed on weather-related property claims.

⚖️ Legal Corner: Lessons on Wear and Tear

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⚖️ Legal Corner: Texas authority on exclusions and mixed causes

Tex. Ins. Code § 554.002. In a suit on an insurance contract, the insurer bears the burden of proof on any avoidance or affirmative defense, and “[l]anguage of exclusion in the contract or an exception to coverage claimed by the insurer … constitutes an avoidance or an affirmative defense.”

Gilbert Texas Construction, L.P. v. Underwriters at Lloyd’s London, 327 S.W.3d 118 (Tex. 2010). The insured must first establish coverage; the insurer must then prove that the loss falls within an exclusion; the burden then shifts back to the insured to prove an exception to the exclusion.

National Union Fire Insurance Co. of Pittsburgh, Pa. v. Hudson Energy Co., 811 S.W.2d 552 (Tex. 1991). Exceptions and limitations on liability are strictly construed against the insurer, and the insured’s reasonable reading of an exclusion controls even if the insurer’s reading appears more reasonable.

Balandran v. Safeco Insurance Co. of America, 972 S.W.2d 738 (Tex. 1998). Construing an ambiguous exclusion in the Texas HO-B homeowners form, the Supreme Court of Texas adopted the insureds’ reasonable reading and held that foundation damage caused by a plumbing leak was covered.

Wallis v. United Services Automobile Ass’n, 2 S.W.3d 300 (Tex. App.—San Antonio 1999, pet. denied). Covered plumbing leaks and excluded settling both contributed to foundation damage. The insureds lost because they offered no evidence segregating the damage caused solely by the covered leaks.

JAW The Pointe, L.L.C. v. Lexington Insurance Co., 460 S.W.3d 597 (Tex. 2015). The policy’s anti-concurrent-causation language barred coverage for costs caused concurrently by covered wind and excluded flood, which shows why the exact wording of your policy matters.

Advanced Indicator & Manufacturing, Inc. v. Acadia Insurance Co., 50 F.4th 469 (5th Cir. 2022). Applying Texas law to a commercial wind claim, the Fifth Circuit reversed summary judgment for the insurer because a jury could reasonably find that all of the loss came from covered wind rather than excluded wear, tear, and deterioration.

👉 Final Takeaway

Carriers sometimes use “wear and tear” to deny damage that a storm or other sudden event actually caused. Under Texas law:

The insurer must prove that an exclusion applies.
Ambiguous exclusions are read in the policyholder’s favor.
When covered and excluded causes combine, you need evidence that separates the covered damage, so document early.
Anti-concurrent-causation wording in your policy can change the result.

If your Texas property claim was denied or reduced because of “wear and tear,” contact The Claim Attorney for a free case review.

This article is general information, not legal advice, and reading it does not create an attorney-client relationship. Results depend on the facts of each case and the language of each policy. Michael P. Bowman is licensed to practice law in Texas and Alabama.

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Estimating Building Permit Costs in Texas Insurance Claims

Thu, 05 Sep 2024 21:09:09 +0000

What “permit costs” usually include

Every Texas city sets its own fee schedule, so always check the local schedule for the project address. Common components include:

Building permit fee for the primary work.
Plan review fee, where the jurisdiction reviews drawings before issuing the permit.
Trade permits for electrical, plumbing, mechanical, or gas work, unless the city bundles them.
Re-inspection fees when an inspection fails or the site is not ready.
Other local requirements, such as floodplain development permits, on-site sewage facility (septic) permits, or fire code permits.

Texas laws that shape residential permit fees

Cities may not price residential permits by value. Under Texas Local Government Code § 214.907, when a city sets a building permit or inspection fee for a residential dwelling, it may not consider the value of the dwelling or the cost of constructing or improving it. A city also may not require disclosure of that value or cost as a condition of the permit, except as required by FEMA for participation in the National Flood Insurance Program. The statute applies to residential dwellings; commercial fee schedules may still use valuation, so check the local rules.

Cities face a decision deadline. Local Government Code § 214.904 generally requires a city to grant or deny a covered building permit within 45 days of the application (or give written notice explaining why it cannot, or agree to a different deadline). If the city then misses that extended or agreed deadline, the statute bars it from collecting permit fees and requires it to refund fees already collected. Review the statute’s conditions before relying on it.

Residential code baseline. Local Government Code § 214.212 adopts the International Residential Code as the municipal residential building code, and cities may adopt local amendments and later editions. Knowing which edition and amendments a city has adopted matters when pricing code-required work.

Limits on local product bans. Texas Government Code § 3000.002 generally prohibits a governmental entity from banning a building product, material, or method allowed by a national model code published within the last three code cycles, subject to listed exceptions, including standards tied to windstorm insurance eligibility.

Counties are different

Texas counties generally do not have broad authority to require building permits for homes in unincorporated areas. Under Local Government Code chapter 233, subchapter F, a qualifying county that opts in may require new single-family homes and duplexes to meet the International Residential Code and to be inspected by qualified private inspectors, but the county’s ability to charge fees for that program is limited. A rural project may therefore have no county building permit fee, yet still need floodplain, septic, or fire code approvals and private inspection costs.

Coastal projects: windstorm certification

For property in the Texas Windstorm Insurance Association’s designated catastrophe area, Texas Insurance Code § 2210.251 generally requires construction, alterations, and repairs, including re-roofs, to comply with the applicable building standards for the structure to be insurable through TWIA. The Texas Department of Insurance issues the Certificate of Compliance (Form WPI-8-E) for completed work. Engineering and inspection costs to obtain that certificate belong in coastal estimates.

New construction vs. repairs

New construction typically involves more fee categories than a repair, including plan review, multiple trade permits, and utility or development charges. Repairs and replacements may need only a single permit, or none, depending on the city and the scope. Many Texas cities require a permit for a full roof replacement, but requirements vary, so confirm with the building department before assuming either way.

Common estimating mistakes

Leaving out trade permits or re-inspection fees.
Using an outdated fee schedule.
Applying a valuation-based formula to residential work in a city where § 214.907 prohibits it.
Assuming a rural project needs no approvals at all.
Forgetting windstorm inspection and certification costs on the coast.

Permit costs in insurance claims

When a covered repair legally requires a permit, replacement-cost estimates commonly include the permit fee as a line item. Whether permit fees and code-upgrade costs are paid, and in what amount, depends on the policy language, including any ordinance-or-law coverage and its limits. Wording matters: in JAW The Pointe, L.L.C. v. Lexington Insurance Co., 460 S.W.3d 597 (Tex. 2015), the Supreme Court of Texas held that anti-concurrent-causation language barred coverage for code-upgrade costs where excluded flood contributed to the loss along with covered wind.

Practical tips: print or save the city’s permit requirement for the scope of work, keep the permit application and receipt, list permit and inspection fees as separate estimate line items, and keep copies of the adopted code provisions that drive any upgrade costs.

Bottom line

Permit costs vary by city, county, and scope, and several Texas statutes limit how local governments can charge them. Check the local schedule for every project, document it, and carry it through the estimate.