SAN ANTONIO (CBSDFW.COM) – After a major hail storm in 2016, Peter and Nancy Reininger figured their homeowners insurance would cover the cost to replace their damaged roof.

The larger than three inch hailstones left dents, scrapes, and damaged the protective finish on their roof.

“This is why you have insurance,” said Nancy Reininger. “You’re paying your premiums so you think everything is going to be covered.”

But Allstate denied their claim pointing to an amendment in their policy that the Reiningers said was never disclosed to them.

Peter and Nancy Reininger (CBS 11)

Like many Texas homeowners with a metal roof, the Reiningers have a “metal roof surface cosmetic damage exclusion endorsement” in their policy. The endorsement states “cosmetic damage cause by hail to a metal roof surface” is not covered.

“I was flabbergasted,” Peter Reininger said when he was told about his policy’s exclusion. “I couldn’t believe it. I couldn’t believe it.”

The Reiningers sued Allstate for fraud claiming the insurance company deliberately failed to disclose the cosmetic roof exclusion on their policy before selling it to them.

In March, a Bexar County jury reached a $1.5 million verdict in favor of the Reiningers.

When the jury was asked, ‘Did Allstate commit fraud?’ According to court records, the jury answered ‘yes’.

According to the lawsuit, when the Reiningers signed up for homeowners insurance with Allstate, their insurance agent sent them an email with an attached document labeled “home policy”.

The Reiningers said they thought this was their policy. The document listed the policy’s coverages which included their metal roof. Nowhere in the document is any mention of the roof cosmetic exclusion.

Peter said. “I spoke with the agent and asked, ‘Do I have hail damage for the metal roof?’ He said, ‘yes.’”

The Reiningers paid their premium only later discovering the document they said their agent referred to as their “home policy” was not their full official policy.

Their 60-page official policy Allstate posted online after the Reiningers paid their premium.

On page 39 of the official policy is the metal roof cosmetic coverage exclusion.

The Reiningers said the exclusion was never disclosed to them in their insurance quotes or application.

“They slipped the exclusion in there after we paid our premium,” Peter Reininger said.

During a court deposition, an Allstate representative testified the Reiningers at any time could have accessed their policy online and could have seen the coverage exclusion.

When the CBS 11 I-Team reached out to Allstate, the insurance company said it could not answer any our questions.

In a written statements, a company spokesperson wrote, “At Allstate, we’re committed to handling all claims in a timely and fair manner, including Mr. Reininger’s claim. At this time, we cannot comment on the specific details of this case, as litigation is still ongoing.”

The Reiningers’ attorney, David Bergen, said, “This was a scheme that was set up from the very beginning to make sure these people had no idea what they were buying.”

Bergen and fellow attorney James Willis from the firm Daly and Black said they believe this is not an isolated case. They have other clients with similar cases.

Plus, there’s been formal complaints filed with Texas Department of Insurance from other Allstate policy holders writing they too were not told about the cosmetic exclusion.

Willis said, “Our concern is that this can happen to any Texas homeowner and they don’t even know it’s about to happen to them until after storm and long after they’ve paid their premium to Allstate.”

What the Reiningers said is especially frustrating is they said the damage to their roof is far more than just cosmetic. They said the hail caused their roof to rust and now when it rains, it leaks.

“We wanted our roof fixed,” said Peter Reininger. “That’s all we wanted.”

Despite the $1.5 million verdict, the Texas couple has not yet received any money to repair their roof.

Allstate would not say if it plans to appeal the verdict.

Comments (4)
  1. Kim High-Allcorn says:

    I have been an adjuster for 20+ yrs and am disappointed in the way you presented this article. You did not offer explanations from both sides which is unfortunate. You knew full well that Allstate could not comment on an ongoing case in litigation, yet you chose to move forward with the story. Let me preface this by saying I do not work for Allstate and have never worked for Allstate.

    You basically indicated Allstate committed fraud. Not true….EVERY endorsement on EVERY policy is listed on the 1st page (dec page). It might only show Roof exclusion or cosmetic damage wording but it is there. The full endorsement is not “buried” in the back of the policy, it is in a specific order behind the policy and other endorsements added to the policy. The homeowner’s agent was correct, the homeowner does have coverage for hail DAMAGE to his roof but, damage according to engineers is a puncture in the metal roof. If his roof did not have punctures, the cosmetic damage endorsement becomes effective. In all the years of handling claims never once has an insured, if they are truthful, been unaware that they have this endorsement. This is because, with most carriers, the endorsement LOWERS their premiums and they opt to add it to their policy. Most insureds decide they can “live” with the denting, then when a hail storm happens they change their mind stating they had “no idea” they had the endorsement and start suing. The insurance companies are in the wrong no matter what they do. They are always the “bad” company trying to take advantage of the insured and attorneys take advantage of that by asking for jury trials. Of course the general public will side with the insured and award an obscene amount, they do not understand the contract (policy) and DON’T CARE. This is a vicious cycle. The homeowner does not get what they want so they sue. The insurance company has to settle even though they do not owe for the claim. Then we all get higher premiums to compensate for all the erroneous law suits. The insurance company begins to offer ways to lower premiums, insured’s add to policy and here we go again…..

    Now with that being said, I did not inspect this roof so I have no way of knowing if this particular roof was physically damaged by engineering standards. I am speaking in general with the experience I have from the carriers I work through.

    As an adjuster this article seemed very biased and did not offer the entire story.

    1. Jeff Drake says:

      Kim High-Allcorn – The jury declared that Allstate was guilty of committing fraud, not the journalist. Go ahead and defend your profession, but get Your facts straight.
      Reading Is Fundamental.

  2. Bill Tassin says:

    I agree with both Mr. Alcorn & Mr. Drake’s comments regarding fraud. I also feel the journalist’s article was biased. Doesn’t the insurance agent have a duty to furnish the correct specimen policy to the Reininger’s or provide an endorsement that substantially changes coverage such as the hail/cosmetic damage endorsement. If this endorsement was not provided by the agent then there may have been a valid E&O claim against the agent’s professional liability insurance carrier.

    Having been an adjuster, superviser, litigation manager for >40 years I can attest to Allstate not being the good hands people all of the time. (In 1994 an ambitious Allstate supervisor in the Northridge Earthquake liked one engineer’s recommendation for repairing a dwelling so much that the superviser instructed the adjuster’s to use that particular engineer on future claims and as a result the company ended up in serious trouble. And what about Texas… their plaintiff bar is controlled by one Democratic law firm, their Legislature and judicial system does not do what is necessary to provide a level playing field for insurance companies as well as policyholders.

    No doubt this was a biased article. Courts need to address what separates cosmetic damage from structural damage similar to what was done with the “lifted shingles” claims.

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