• Atlanta
• Boston
• Dallas
• Ft. Lauderdale
• London
• Minneapolis
• New York
• Oakland
• Philadelphia
• Washington, DC

by Shannon O'Malley

If you attended our recent 2026 What the Hail? conference, you may have seen me discuss Texas concurrent causation and its real-world implications. The presentation addressed what the insurer and its consultants should consider when analyzing damage caused both by covered and non-covered causes of loss. This week, another Federal Court in Texas looked to concurrent causation and analyzed the reliability of an insured’s expert in segregating covered from non-covered (here pre-existing) damage.

In Nguyen v. Allstate Vehicle and Prop. Ins. Co., No. 2:24-CV-186-Z-BR, 2026 WL 497400, at *1 (N.D. Tex. Feb. 23, 2026), the court analyzed whether an insured and his experts met their burden to show that non-cosmetic damage occurred on May 1, 2022, the specified date of loss.

The policy here included a robust cosmetic damage endorsement, which stated:

Cosmetic damage caused by hail to the surface of a metal roof, including but not limited to, indentations, dents, distortions, scratches, or marks, that change the appearance of the surface of a metal roof.

This exclusion applies to all of the components of the surface of a metal roof, including but not limited to, panels, shingles, flashing, caps, vents, drip edges, finials, eave and gable trim and snow guards, coatings and other finishing materials.

We will not apply this exclusion to sudden and accidental direct physical damage to the surface of a metal roof caused by hail that results in water leaking through the surface of a metal roof.

The insurer argued that the exclusion precluded coverage for cosmetic damage caused by hail to the surface of the roof unless it results in water leaking through the roof surface. The insurer determined that there was hail damage but concluded the only “damage” was to the appearance of the roof and no water leaked due to the hail.

The insured disagreed and eventually brought suit arguing that because water was leaking into his garage, the roof was damaged and required replacement. The parties litigated and exchanged expert reports.

Notably, the insured’s expert report did not specifically connect the alleged damage to the claimed date of loss – or even any other storm that occurred during the policy period. Instead, the expert report only noted that there were clear signs of a previous severe hailstorm and there were multiple areas of impact damage. The court noted that the report included a weather report that showed a hailstorm occurred near the property on the claimed date of loss. But that same report also showed eleven other hailstorms that impacted the property in the years before the policy’s coverage period. The report also failed to consider and rule out other possible causes including wear and tear, deterioration, and faulty workmanship. Finally, the insured’s expert report did not present any information about the condition of the roof before the claimed date of loss.

The insured conceded the missing information in the report but argued that the insurer had already confirmed that May 1, 2022 was the operative date of loss. The court rejected that argument, though, noting that it was the insured who reported the date of loss and it is the insured’s burden to establish that the May 1, 2022 storm actually caused the damage that resulted in the leak in the insured’s roof:

Stated differently, because the Cosmetic Damage Endorsement in Plaintiff’s policy excludes coverage for merely superficial damages, the jury in this case would be asked to decide the cause of any non-cosmetic damage to Plaintiff’s roof. Because Rhynhart’s report does not tie any non-cosmetic damage he observed to the May 1 storm, and in fact fails to date any damages at all, it would not aid the jury in that task. Accordingly, his opinions about whether the May 1 storm damaged Plaintiff’s roof must be excluded.

Id. at *4.

Because the court excluded the insured’s expert opinion “that the May 1, 2022 storm caused damage to Plaintiff’s roof or other parts of Plaintiff’s property,” the court determined that the insured could not meet its burden to show its claim was covered and granted summary judgment.

The insured attempted to avoid summary judgment by arguing that the insurer’s experts identified deterioration and faulty installation of the flashing as the causes of the leaking. Specifically, because the insurer presented at least two different explanations for the cause of the water intrusion, it cannot meet its burden to show the Cosmetic Damage Endorsement applies. But the court rejected this argument, too, holding that it “is not incumbent upon Allstate to prove that a single cause other than the May 1 storm is the reason for the leak in the Plaintiff’s garage. Rather, to trigger application of the Endorsement, Allstate must show only that the May 1 storm was not the cause of the leak, even if Plaintiffs roof bears signs of hail-related cosmetic damage.” Id. at *7.

The court rejected the insured’s attempt to create a further fact issue by testifying that the roof began leaking after the storm because the insured was not qualified as an expert to opine on causation. And because the insured’s causation expert opinion was excluded, he could not provide competent evidence that a covered cause of loss (hail damage) caused the water leaking due to the storm occurring during the policy period. Accordingly, the court granted summary judgment on the breach of contract claim. And because there was no coverage under the policy, the court also granted summary judgment on the remaining bad faith and extra contractual claims.

The Lowdown: This case demonstrates that courts, at least at the Federal level, recognize the importance requiring the insured to meet his burden to establish causation in determining whether an exception may apply to an exclusion. Broad statements unsupported by real data or testimony attempting to tie damage to an amorphous event do not meet the insured’s burden to show covered damage occurred during the policy period.

Further, this is one of the first cases to address a more robust cosmetic damage endorsement that does not tie coverage to “functional damage” or reduced life. Instead, the exclusion limits coverage to when the hail immediately allows the intrusion of water. Insurers concerned about hail dents and dings to metal roofs may want to consider adopting this more robust cosmetic damage language moving forward. 

_________________________________

The opinions expressed are those of the authors and do not necessarily reflect the views of the firm or its clients. This article is for general information purposes and is not intended to be and should not be taken as legal advice.