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Sisters awarded $18 million in San Bernardino County flood damage lawsuit

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 found 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. Muddy water damaged their home, including heating and air conditioning ducts. Rainwater also damaged their manufactured home’s electrical system, according to their attorney, Michael Hernandez.

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 adjuster only offered Garnier and Toft that $5,000, Hernandez said.

The sisters sued American Reliable in September 2020 for breach of contract, claiming the adjuster 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 filings, American Reliable argued that Garnier and Toft repeatedly delayed their home inspection and, after filing their lawsuit, were slow to respond to requests made by the the company’s legal team. The women also repeatedly requested that all communications from the insurance company be in writing, Hernandez said.

More than four years after filing their lawsuit, American Reliable said a mistake was made on their part and they offered the sisters $140,000 in October 2023, just months before the trial was scheduled to begin. The company explained to Garnier and Toft that they learned about the sisters’ living conditions when reviewing evidence at trial, Hernandez said.

“We argued that they knew about these conditions for a long time, but made the decision to pay my clients because they knew they would face a jury,” Hernandez said.

Garnier and Toft continued with the lawsuit and received estimates to repair their home, but postponed repairs until after the trial because they would be forced to move during construction, according to Hernandez.

After a six-week trial, a jury found in favor of the women and awarded them each $3 million for moral damages. According to court documents, they received $2 million in punitive damages from American Reliable and $10 million in punitive damages from Global Indemnity Group.

The verdict comes during a tumultuous time in California as insurance companies flee the Golden State, saying they are unable to provide insurance to homes threatened by wildfires and other natural disasters.

Although climate change liability coverage was not overtly considered in Garnier and Toft’s case, their home was damaged by floodwaters caused by a rainstorm in Southern California. Predictions show that climate change will worsen flooding in California in the coming years.

In March, State Farm announced it would not renew the policies of 72,000 homeowners across the state, citing high inflation, catastrophe risk, reinsurance costs and limitations in years-old insurance regulations. several decades as reasons to scale back policies.

The California Department of Insurance announced a new strategy in September to streamline the rate approval process for insurers in the home, auto and other markets. This process was last modified in 1988.