2 sisters sued their insurer after it offered $5,000 to fix their wrecked home after a storm. They won $18 million.

A stock image shows somebody mopping up water in a house damaged by a storm.
A stock image shows somebody mopping up water in a house flooded by a storm.Petra Richli/Getty Images
  • A jury awarded sisters $18 million in damages from an insurance company after their home was flooded.

  • The sisters sued American Reliable after being offered just $5,000 for repairs.

  • According to their attorney, the house was unliveable, with the heating system destroyed.

The home of two California sisters was badly flooded during a February 2019 rainstorm but when they filed a claim with their insurance company, American Reliable, they were offered just $5,000 for repairs.

Last month, a jury awarded the pair $18 million, after they took the company to court.

According to a ruling in the Superior Court of San Bernardino County, Jennifer Garnier and Angela Toft were awarded $6 million for pain and suffering and $12 million in punitive damages in a verdict reached by a jury on April 18, following a six-week trial.

The lawsuit said that the sisters' home in Pinon Hills was damaged during a large rainstorm on February 15, 2019, rendering it unliveable, as detailed in various news reports.

In a statement posted on Instagram, their attorney, Michael Hernandez of HHJ Trial Attorneys, said the damages caused electrical faults and destroyed the heating system.

Small cracks had started to form throughout, the defendants also claimed in the lawsuit.

The Los Angeles Times, citing Hernandez, reported that the sisters estimated they needed more than $100,000 to fix the damage.

However, according to the ruling, an insurance adjuster offered just $5,000 for repairs, not including payouts for alternative living arrangements and personal property.

According to court documents reviewed by the Times, the plaintiffs argued that American Reliable delayed their home inspection.

The Times also reported that American Reliable admitted to an oversight in October 2023 and offered the sisters $140,000.

However, Garnier and Toft decided to proceed with the trial, which ultimately resulted in a jury finding in their favor.

"We argued that when you knowingly put a family in an uninhabitable home, you can't come back later and say you are not responsible for the consequences," Hernandez said in the Instagram post.

According to the ruling, the company claimed to Garnier and Toft that it only learned about the full extent of the home's damage while deliberating evidence for the trial.

The Times reported that Garnier and Toft were awarded $3 million each for emotional damages, $2 million in punitive damages from American Reliable, and $10 million in punitive damages from Global Indemnity, American Reliable's parent company.

Global Indemnity and American Reliable did not immediately respond to Business Insider's requests for comment. Hernandez directed BI to the write-up of the ruling.

Last year, Business Insider reported that insurance companies are finding new ways to make money, often at their clients' expense.

The feature, written by Jathan Sadowski, a senior research fellow at Monash University, highlighted how algorithmic systems are being crafted to optimize insurance companies' profits, leveraging AI's opacity to give them plausible deniability.

Tuesday, May 14, 2024: This article has been updated with additional details from the ruling.

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