In El Dueno, LLC v. Mid-Century Insurance coverage Firm (2025 WL 1540329) (tenth Cir. 2025)), the Tenth Circuit Courtroom of Appeals affirmed abstract judgement on behalf of the insurer on the premise that the insurer didn’t act in unhealthy religion when it denied the insured’s declare based mostly on an engineering report that contradicted an adjuster’s preliminary findings.
Factual Overview
This insurance coverage protection dispute arose from alleged roof injury attributable to a hailstorm. The topic insurance coverage coverage coated direct bodily loss attributable to hail. After receiving the declare, the insurer assigned a declare adjuster to research the roof . The adjuster concluded that the roof was, in truth, broken by hail. Based mostly on the adjuster’s restore estimate, the insurer paid the declare.
Subsequently, the insured employed a contractor who offered an estimate that vastly exceeded the estimate initially ready by the insurer’s adjuster. In response, the insurer then reassigned the declare to a large-loss adjuster. The massive-loss adjuster reinspected the property and employed an engineer to help. The engineer concluded that the roof injury was not attributable to hail however was preexisting or as a consequence of different causes. Based mostly on the engineer’s report, the insurer denied protection for the roof repairs, however didn’t search to recoup the beforehand disbursed funds.
Consequently, the insured commenced swimsuit, alleging, partly, that the insurer unreasonably delayed or denied protection.
Courtroom’s Authorized Evaluation
When the insurer decided that its coverage didn’t cowl the insured’s roof repairs, it had earlier than it the unique adjuster’s report concluding hail injury, and the engineer’s report concluding that hail didn’t injury the roof. The insured argued that the conflicting data demonstrated that the insurer acted unreasonably in denying protection. Beneath Colorado regulation, insurers are prohibited from unreasonably delaying or denying fee of claims for advantages owed to first-party claimants. An insurer’s actions are deemed unreasonable in the event that they lack an inexpensive foundation.
In rejecting the insured’s argument and discovering for the insurer, the Courtroom acknowledged that “an insurance coverage firm doesn’t act unreasonably in figuring out the scope and worth of a declare by counting on a report generated by an impartial engineer, even when that report conflicts with an insurance coverage adjuster’s preliminary evaluation.” With out proof of an trade commonplace suggesting in any other case, the Courtroom concluded that the insured’s arguments mirrored a mere disagreement, which was inadequate to ascertain a foul religion declare.
Conclusion
El Dueno underscores the precept that, not less than in sure jurisdictions, an insurer’s reliance on a certified, impartial knowledgeable’s report—regardless of extra conflicting assessments—doesn’t routinely represent unhealthy religion. A disagreement over the trigger or extent of harm, with out proof of extra unreasonable conduct or delay, is inadequate. For policyholders and insurers alike, this resolution highlights the significance of substantiating claims with credible and expert-backed evaluations.
About The Authors
