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by Claire Fialcowitz

Last month, the Houston Division of the Southern District of Texas reminded policyholders that total reliance upon contractors’ estimates is not sufficient evidence to demonstrate coverage for claimed damage. In Villegas v. State Farm Lloyds, United States Magistrate Judge Dena Hanovice Palermo recommended summary judgment in favor of State Farm Lloyds (“State Farm”) on the insureds’ claims for breach of contract, breach of the duty of good faith and fair dealing, and violations of the Texas Insurance Code. No. 4:25-cv-1644, 2026 WL 2754159, at *1 (S.D. Tex. Aug. 27, 2026).

The insureds’ homeowners policy covered accidental direct physical loss caused by wind or hail, subject to a $4,264.00 wind/hail deductible. See id. After Hurricane Beryl struck Houston on July 8, 2024, the insureds reported that shingles had blown off their roof and that water had leaked into their residence. See id. State Farm’s adjuster inspected the property and observed limited wind damage to the roof’s front and back slopes, the roof’s right hip/ridge, and the patio’s oriented strand board sheathing. See id. The State Farm adjuster also noted pre-existing damage to the metal soffits and wood rot on the fascia board. See id. Based on her investigation, the State Farm adjuster estimated the cost to repair the wind damage at $2,099.26. See id. As the cost to repair the amount of covered damage fell below the policy’s applicable deductible, State Farm explained that no payment was owed to the insureds at that time. See id. at *1.

On December 5, 2024, State Farm received a demand from the insureds’ counsel for $13,820.74 in damages, plus statutory interest and attorneys’ fees. See id. In response, State Farm reiterated that the claimed damage fell below the policy’s applicable deductible and denied the insureds’ demand. See id. The insureds filed suit in state court, alleging that State Farm conducted a bad-faith inspection that resulted in a lowball estimate. See id. at *2. State Farm removed the case to federal court and filed its motion for summary judgment on the insureds’ contractual and extracontractual claims. See id.

To support its motion for summary judgment, State Farm relied upon its adjuster’s estimate and its expert’s engineering report, which provided that no shingles were creased, torn, displaced, or missing in a manner consistent with wind pressure. See id. at *3. Rather, the engineer determined the observed damage to shingles was caused by tree limbs that, based on historical aerial and Google Street View imagery, had been brushing against the roof for several years before Hurricane Beryl. See id. The engineer further determined that the wind speeds at the property on the date of loss were below the speed at which laminated shingles are typically rated to withstand. See id.

In response, the insureds offered the following evidence:

• One contractor’s estimate consisting “of a few line-item pages that tally up to $26,468.69 in repair costs; seventy caption-less pictures of [the insureds’] roof shingles and fence; images and diagrams from Eagleview…; and pictures of [the insureds’] damaged washer, countertop microwave and refrigerator”;
• A second contractor’s estimate consisting of “three line-item pages totaling $12,460 in repairs, along with two unexplained pictures of shingles from Lowes’ website,”; and
• A one-page narrative “expert report” from James Wesselski of WesGroup Consulting, LLC (“WesGroup”), explaining that someone from WesGroup inspected the insureds’ home on November 25, 2025 and reviewed both the insureds’ and State Farm’s estimates, and estimating the damage to total $34,218.23.

The Court emphasized that “’[t]he insured bears the burden of proving they suffered a loss and that the loss is covered by the relevant insurance policy.’” Id. (quoting Matter of New York Inn, Inc., No. 24-10338, 2025 WL 999084, at *4 (5th Cir. Apr. 3, 2025)). Highlighting the fact that neither of the contractors’ estimates included a narrative or any causation analysis, the Court noted that the contractors “may have simply inspected [the insureds’] property for any damage and calculated what it would cost to fix.” Id. at *4. Because the only damages at issue were those caused by wind on July 8, 2024, the Court explained that “[e]stimates that do not account for or allocate those damages separately are useless.” Id.

The insureds’ expert report fared no better. Although the report’s one-page narrative stated that the damage was caused by a wind loss on the date of loss, the expert abandoned that position at his deposition, testifying that he was not an expert on wind dynamics, had not investigated when wind caused the damage he identified, and did not intend to serve as a causation expert. See id.

Based on the evidence, or lack thereof, the Court explained that the parties’ competing figures did not actually conflict—it may well cost $34,218.23 to repair all of the damage observed by the insureds’ consultants at the property, but only $2,099.26 of that damage was caused by wind on the date of loss. See id. As the insureds offered no evidence segregating covered damage from non-covered damage, the Court recommended that State Farm be granted summary judgment on the insureds’ breach of contract claim. See id.

Turning to the insureds’ extracontractual claims, the Court applied the well-settled Texas rule that “‘[w]hen the issue of coverage is resolved in the insurer’s favor, extracontractual claims do not survive.’” Id. at *5 (quoting State Farm Lloyds v. Page, 315 S.W.3d 525, 532 (Tex. 2010)). Having found that the insureds’ extracontractual claims were predicated entirely on State Farm’s determination that the covered wind damage did not exceed the deductible, and that the insureds offered no evidence of any injury independent of their right to policy benefits, the Court recommended that those claims also failed as a matter of law. See id.

The Southern District of Texas’ reinforcement of the insured’s burden to present competent evidence segregating covered damage serves as a useful reminder. When you ask your insureds for their causation analysis and/or expert, remind them that “my contractor said so” is not an answer.

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.