“Forces of Nature” Encompasses Weather Events
By J. Richard Harmon, Linda S. Ressetar, Ann Parrish • Mar 17, 2021
The February 2021 winter storm in Texas implicates numerous insurance-related issues. One of the threshold issues is whether Texas Insurance Code Section 542A applies to the insurance claims presented as a result of this winter storm.
Texas Insurance Code Section 542A.001(2) defines “Claim” as a first-party claim that:
- is made by an insured under an insurance policy providing coverage for real property or improvements to real property;
- must be paid by the insurer directly to the insured; and
- arises from damage to or loss of covered property caused, wholly or partly, by forces of nature, including an earthquake or earth tremor, wildfire, flood, tornado, lightning, hurricane, hail, windstorm, or rainstorm. (emphasis added)
There is very little in the way of case law that provides guidance in defining the term “forces of nature.” The limited authority, however, clarifies that “forces of nature” refer to weather-related events. See, e.g., Jada Restaurant Group, LLC, v. Acadia Ins., Co., No. SA-20-CV-00807-XR, 2020 WL 5362071 (W.D. Tex. Sept. 8, 2020). In Jada, on receipt of the insured’s pre-suit notice, the insurer, Acadia, promptly elected to accept responsibility for the adjuster under Chapter 542A. Id at *1. When Acadia was sued, it removed the suit to federal court, arguing that the adjuster must be dismissed under Texas Insurance Code §542A.006 because of its pre-suit election to accept responsibility for the adjuster. Id at *2. The court remanded the case to state court, finding that a virus is not a “force of nature” for purposes of Chapter 542A. Id. In reaching this decision, the court applied the canon of noscitur a sociis, or “a word may be known by the company it keeps.” Id. Stated differently, “words in a statute must be interpreted in the context of associated words.” Id. Thus, it found that because all the examples of perils listed in the statute are classic examples of forces of nature – i.e., those involving forces of earth, wind, wildfire, and water–the statute must have intended weather to be the limit of its scope. Id. The application of the statute was not, however, limited by the doctrine of ejusdem generis to apply only to the listed perils. The court further noted that although “the court need not look to legislative history given the plain language of the statute,” its legislative history showed that the legislature was concerned with weather-related claims when it enacted 542A, not infectious disease claims. Id.; see also, Lousi G. Orsatti, DDS. P.C. v. Allstate Ins. Co. 5-20-CV-00840-FB-RBF, 2020 WL 5948269, at 5 (W.D. Tex., Oct. 7, 2020) (adopting the rationale in Jada and finding that Chapter 542A only applied to weather-related events).
We anticipate Texas courts, if asked, will find the freezing weather would be considered a “force of nature.” Therefore, claims for loss or damage as a result of those freezing temperatures – water damage due to bursting pipes – should be considered a “Claim” under Section 542A.001(2)(C). Notably, the statute’s definition of “Claim” provides that the loss or damage can be caused wholly or partly by forces of nature. Accordingly, evidence of cause of the loss or damage not solely attributable to the freezing weather should not preclude application of Chapter 542A.