San Bernardino Sisters Win $18 Million Verdict Against Insurer

Two sisters from San Bernardino, California, were awarded an $18 million verdict against American Reliable insurance company for failing to pay for flood damage repairs to their home. The jury sided with the sisters, awarding them emotional and punitive damages after a six-week trial.

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San Bernardino Sisters Win $18 Million Verdict Against Insurer

San Bernardino Sisters Win $18 Million Verdict Against Insurer

Jennifer Garnier and Angela Toft, two sisters from San Bernardino, California, have been awarded an $18 million verdict against American Reliable insurance company for its failure to pay for flood damage repairs to their Piñon Hills home. The sisters' prefabricated home suffered extensive damage from rainwater flooding in February 2019, with repairs estimated to exceed $100,000.

Why this matters: This case highlights the ongoing struggles between insurance companies and policyholders in California, where climate change is expected to worsen flooding and other natural disasters. As insurance companies increasingly withdraw from the state, this verdict may have significant implications for the future of insurance coverage in high-risk areas.

Despite the significant damage to the heating and air conditioning ducts, electrical system, and other parts of the house, American Reliable initially offered the sisters a mere $5,000 to cover the repairs. Unsatisfied with the low offer, Garnier and Toft filed a lawsuit against the company in September 2020, alleging breach of contract and claiming that the adjuster had not properly inspected the home.

After a six-week trial, a San Bernardino County jury sided with the sisters, awarding them $3 million each for emotional damages, $2 million in punitive damages from American Reliable, and an additional $10 million in punitive damages from the insurer's parent company, Global Indemnity Group. The sisters' attorney, Michael Hernandez, argued that the insurance company had long been aware of the home's conditions but only decided to pay the claim when faced with a jury trial. "We argued that they had known about those conditions for a long time, but they made the decision to pay my clients because they knew that they would be facing a jury," Hernandez stated.

In its defense, American Reliable contended that the sisters had delayed the inspection of their home and were slow to respond to requests from the company's legal team. However, just before the trial in October 2023, the insurer offered Garnier and Toft $140,000, citing an oversight on their part.

The substantial verdict in favor of the San Bernardino sisters comes at a time when many insurance companies are leaving California, citing challenges in providing coverage to homes threatened by wildfires and other natural disasters. As climate change is expected to worsen flooding in the state in the coming years, this case highlights the ongoing tensions between insurers and policyholders in California's increasingly risk-prone environment.