Two San Bernardino sisters who sued their insurance company for failing to pay to repair flood damage to their home are now $18 million richer after a jury ruled in their favor and imposed emotional and punitive damages to the insurance company.
The $18 million verdict announced April 18 by a San Bernardino County jury was a far cry from the $5,000 an insurance adjuster had initially offered the women.
Jennifer Garnier and Angela Toft's home in Piñon Hills was flooded by rainwater in February 2019. The muddy water damaged their home, including their heating and air conditioning ducts. The rainwater also damaged the electrical system of his manufactured home, according to his attorney, Michael Hernández.
The sisters estimated they needed more than $100,000 to repair the damage, but when they filed a claim with their insurance company, American Reliable, an insurance adjuster offered Garnier and Toft only $5,000, Hernandez said.
The sisters sued American Reliable in September 2020 for breach of contract, alleging the appraiser failed to conduct a proper inspection of the home. The house was uninhabitable, according to their lawsuit, but Garnier and Toft continued to live there because they had nowhere else to go.
Arizona-based American Reliable and its parent company, Pennsylvania-based Global Indemnity Group, did not respond to requests for comment.
But in court papers, American Reliable argued that Garnier and Toft repeatedly delayed inspecting their home and, after filing their lawsuit, were slow to respond to requests made by the company's legal team. The women also repeatedly asked that all communications from the insurance company be made in writing, Hernandez said.
More than four years after they filed their claim, American Reliable said an oversight was made on their part and they offered the sisters $140,000 in October 2023, just months before the trial was to begin. The company explained to Garnier and Toft that they learned about the sisters' living conditions while deliberating evidence at trial, Hernandez said.
“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 they would face a jury,” Hernandez said.
Garnier and Toft moved forward with the trial and received estimates to repair their home, but they postponed the repairs until the trial was over because they would be forced to relocate during construction, according to Hernandez.
After a six-week trial, a jury ruled in favor of the women and awarded them each $3 million in emotional damages. They received $2 million in punitive damages from American Reliable and $10 million in punitive damages from Global Indemnity Group, according to court documents.
The verdict comes during a tumultuous time in California, as insurance companies flee the Golden State, saying they cannot provide insurance to homes under threat from wildfires and other natural disasters.
While climate change-related liability coverage did not overtly factor into Garnier and Toft's case, their home was damaged by flooding from a storm in Southern California. Forecasts show that climate change will exacerbate flooding in California in the coming years.
In March, State Farm announced it would not renew policies for 72,000 homeowners statewide, citing high inflation, catastrophe exposure, reinsurance costs and limited decades-old insurance regulations as reasons for reducing policies. .
The California Department of Insurance announced a new strategy in September to streamline the rate approval process for insurers in the homeowners, auto and other markets. That process was last changed in 1988.
