$18 million was awarded to California Sisters after the insurance company only offered $5,000 for storm damage.

Two sisters from San Bernardino, California, were granted an incredible $18 million in a precedent-setting case that highlights the difficulties many homeowners have when filing insurance claims. Their insurance company had neglected to fairly reimburse them for flood damage to their home. In a historic decision in their favor, Jennifer Garnier and Angela Toft defeated American Reliable, a major insurance company, in court.

The story started back in February 2019, when rains flooded Garnier and Toft’s Piñon Hills house, seriously damaging the electrical system, air conditioning and heating ducts, and other parts of their property. The sisters were horrified to learn that an insurance adjuster had only given them $5,000 to cover the damages, even though they had estimated that the repairs would cost over $100,000.

Garnier and Toft, feeling unfairly treated, made the decision to sue American Reliable, claiming that the business had broken their insurance agreement by neglecting to properly check their house. The sisters stayed in their damaged house since they had nowhere else to live as the conditions became unlivable.

But American Reliable refuted the accusations, claiming that Garnier and Toft were reluctant in answering the company’s legal team’s questions and had delayed the inspection process. The insurance company’s position exacerbated the legal battle, which lasted for more than four years until a momentous development.

Unexpectedly, American Reliable admitted their mistake and extended a belated offer of $140,000 to the sisters, only months before the trial was scheduled to start. Nevertheless, Garnier and Toft decided to move forward with the trial in order to receive justice for the suffering they had gone through, and this last-minute compromise had little effect on them.

A San Bernardino County jury found in favor of Garnier and Toft after a six-week trial, giving them emotional damages awards of $3 million apiece. Additionally, the jury awarded American Reliable $2 million in punitive damages and Global Indemnity Group, the company’s parent, an astounding $10 million.

The decision, which was made public on April 18, 2024, represents a major victory for homeowners resolving insurance issues, especially in light of the increasingly unstable environment in California. The sisters’ case emphasizes the difficulties caused by natural catastrophes like floods that are made worse by climate change, even though it is not directly related to liability coverage for climate change.

Given the rush of insurance firms leaving California due to fears of wildfires and other natural calamities, the timing of the decision is especially poignant. The recent decision by State Farm to not renew coverage for 72,000 property owners highlights the growing difficulties that the state’s insurers are facing.

The California Department of Insurance presented a new plan in September that aims to streamline the rate approval procedure for insurers in response to the changing market conditions. With the need for adaptable actions in the face of growing climate-related threats, this project aims to update legislation that have mostly not changed since 1988.

The verdict in the lawsuit involving Garnier and Toft is a potent reminder of how crucial it is to hold insurance firms responsible and fight for policyholders’ rights. As California struggles with the effects of climate change, it is more important than ever to make sure homeowners have proper protection and assistance in order to preserve their communities from future hazards.