In El Dueno, LLC v. Mid-Century Insurance coverage Firm (2025 WL 1540329) (tenth Cir. 2025)), the Tenth Circuit Court docket of Appeals affirmed abstract judgement on behalf of the insurer on the idea that the insurer didn’t act in unhealthy religion when it denied the insured’s declare primarily based on an engineering report that contradicted an adjuster’s preliminary findings.
Factual Overview
This insurance coverage protection dispute arose from alleged roof harm brought on by a hailstorm. The topic insurance coverage coverage lined direct bodily loss brought on by hail. After receiving the declare, the insurer assigned a declare adjuster to analyze the roof . The adjuster concluded that the roof was, actually, broken by hail. Primarily based 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 harm was not brought on by hail however was preexisting or as a consequence of different causes. Primarily based on the engineer’s report, the insurer denied protection for the roof repairs, however didn’t search to recoup the beforehand disbursed funds.
Because of this, the insured commenced swimsuit, alleging, partially, that the insurer unreasonably delayed or denied protection.
Court docket’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 harm, and the engineer’s report concluding that hail didn’t harm the roof. The insured argued that the conflicting info demonstrated that the insurer acted unreasonably in denying protection. Below Colorado regulation, insurers are prohibited from unreasonably delaying or denying cost 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 Court docket said 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 normal suggesting in any other case, the Court docket concluded that the insured’s arguments mirrored a mere disagreement, which was inadequate to determine a foul religion declare.
Conclusion
The proprietor underscores the precept that, no less than in sure jurisdictions, an insurer’s reliance on a certified, impartial skilled’s report—regardless of extra conflicting assessments—doesn’t mechanically represent unhealthy religion. A disagreement over the trigger or extent of injury, with out proof of extra unreasonable conduct or delay, is inadequate. For policyholders and insurers alike, this choice highlights the significance of substantiating claims with credible and expert-backed evaluations.
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