Charter Oak Fire Insurance Co, a subsidiary of Travelers Cos. Inc, is facing a breach of contract lawsuit over its denial of a hail damage claim that was later estimated at $10.5 million during an independent assessment.
The lawsuit, filed in the US District Court for the Western District of Tennessee, alleges that the commercial policyholder submitted a claim promptly after a 2023 hailstorm caused damage to its property.
Charter Oak acknowledged the claim, assigned a claim number, and conducted an inspection of the property before ultimately denying coverage.
After the denial, the policyholder provided a third-party estimate totaling $10.5 million, which included costs for repair, remediation, construction, mitigation, and cleaning services, according to the complaint.
The suit claims that Charter Oak’s denial was not consistent with the policy language, which allows either party to request an appraisal. The plaintiff is asking the court to compel Charter Oak to enter the appraisal process and to award compensatory damages, with the amount to be determined at trial.
Travelers faced several legal challenges and lawsuits in recent months. In November, a Missouri state court jury ordered Travelers to pay $37.9 million for refusing to cover an $11 million wrongful conviction settlement.
The case involved Ryan Ferguson, who was wrongfully convicted of murder and later sued the city of Columbia and its police officers. Travelers, which insured the city, declined to cover the settlement, leading to this verdict.
In the same month, New York State also fined the company $1.55 million for cybersecurity deficiencies that led to a data breach affecting approximately 4,000 individuals.
Hackers exploited vulnerabilities in Travelers' online quoting tool, accessing sensitive personal information. The company has since committed to enhancing its cybersecurity measures.
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