Hunton Insurance Recovery Blog

In a recent decision, the US Court of Appeals for the Fifth Circuit affirmed summary judgment for a commercial property insurer in a dispute involving the timing of notice for a hail damage claim. In Gann v. Depositors Insurance Co., No. 25-11291 (5th Cir. Oct. 5, 2026), the policyholder reported a claim after discovering interior water damage in 2022, but its consultant later attributed all of the claimed roof damage to a hailstorm that occurred in 2018. The court concluded that the delay in identifying and reporting the 2018 loss was unreasonable and prejudiced the insurer’s ability to investigate the circumstances of the loss in a timely manner. The decision is an important reminder for policyholders of the need for timely notice under property insurance policies. Such issues can arise, as they did in Gann, even where damage is not immediately apparent, its cause is not initially known, or the cause of loss may implicate a different policy period than the one under which the claim was first made.

The Dispute

The dispute arose from hail damage to the roof of a commercial property in Irving, Texas. After discovering interior water damage, the policyholder reported a claim to the insurer in September 2022, specifying August 9, 2022, as the date of loss. The insurer inspected the property and determined that a portion of the roof had sustained hail-related damage and issued payment.

The late notice issue arose later. The policyholder had retained a consultant to evaluate the property for hail damage, and the consultant ultimately concluded that the entire roof, which consisted of three separate sections, required replacement based on an earlier weather event that took place on June 5, 2018. The consultant’s report was not provided to the insurer until October 2023. Thus, the case did not involve a policyholder that initially identified a 2018 hail loss and then waited years to notify its insurer. Rather, the policyholder reported the claim after discovering water damage in 2022, and the earlier 2018 storm emerged later as the cause of the broader roof damage.

The Fifth Circuit Finds the Delay Unreasonable and Prejudicial to the Insurer

Despite these facts, the Fifth Circuit held that, even assuming the claim could be made under the policy in effect in 2018, notice of the 2018 loss was untimely as a matter of law. The court emphasized that the claim was not submitted until more than four years after the June 2018 storm and that the 2018 date of loss was not identified until more than five years after the storm. The policyholder maintained that it acted promptly once it discovered the interior water damage, but the court noted that it offered no excuse for why the roof damage had not been discoverable earlier. The court relied in part on its earlier decision in Ridglea Est. Condo. Ass’n v. Lexington Ins. Co., 415 F.3d 474, 479 (5th Cir. 2005), where the Fifth Circuit concluded that a six-year delay in providing notice of alleged hail damage was unreasonable as a matter of law, explaining that “no rational finder of fact could conclude that [the plaintiff’s] notice, which came six years after the alleged date of the hail damage, was given within a reasonable time.”

The court also held that the insurer established prejudice because the delay impaired its ability to promptly investigate the circumstances of the loss while the matter was fresh. The court accordingly affirmed summary judgment on the policyholder’s breach-of-contract claim. It also affirmed summary judgment on the extra-contractual claims, because they lacked any injury independent of their insurance claim.

Takeaway

For policyholders, the practical lesson of Gann is not simply that “late notice defeats coverage.” The policyholder here acted promptly once it discovered interior water damage, but the claim was made under the 2022 policy, and the earlier 2018 cause of loss did not surface until more than a year later. By then, notice under the 2018 policy was more than five years late, and the court found no explanation for why the roof damage had not been discoverable earlier.

When property damage is discovered, policyholders should consider promptly investigating both the scope and the potential causes of the loss, including whether the cause may fall in an earlier policy period, and giving notice under each potentially applicable policy. Where the timing, cause, or applicable policy period is uncertain, experienced coverage counsel and insurance brokers can help policyholders assess notice obligations and preserve available coverage.