In Mankoff v. Privilege Underwriters Reciprocal Exchange (2024 WL 322297 (Tex. App.—Dallas Jan. 29, 2024)), the Court determined that the term “windstorm” was ambiguous as utilized in the subject insurance policy.

The insureds suffered property damage caused by a tornado and subsequently submitted a claim to their insurer.  The insurer paid only a portion of the claim because it maintained that the tornado that struck and damaged the property was a “windstorm” and, therefore, the claim was subject to the policy’s “Windstorm or Hail Deductible.”  That provision stated:

5.  Deductible

Unless otherwise noted in this policy, the base deductible or one of the special deductibles shown on your Declarations or by endorsement is the amount of a covered loss you will pay.

Windstorm or Hail Deductible

In the event of direct physical loss to property covered under this policy caused directly or indirectly by windstorm or hail, the Windstorm or Hail deductible listed on your Declarations is the amount of the covered loss for dwelling, other structures and contents that you will pay.  The Windstorm or Hail deductible does not apply to coverage under 7. Loss of Use.  The Windstorm or Hail deductible applies regardless of any other cause or event contributing concurrently or in any sequence.

The policy also included a base deductible which was waived for covered losses other than those caused by a windstorm, hail, or earthquake:

Waiver of Deductible

For a covered loss caused by a peril other than windstorm or hail or earthquake that is greater than $50,000, we will waive the base deductible.  This waiver of deductible only applies if the base deductible shown on your Declarations is $25,000 or less.

This waiver of deductible does not apply to special deductibles for windstorm or hail or earthquake.  This waiver of deductible also does not apply to a special construction deductible.

Consequently, the insureds sued to recover the withheld deductible arguing that the tornado that caused the damage was not a windstorm and, as a result, their deductible was waived.

In construing the term “windstorm,” the Court noted that its primary concern was to ascertain the parties’ intentions as expressed in the policy.  As the policy did not define “windstorm,” the Court considered its common, ordinary meaning while reading the term “in context and in light of the rules of grammar and common usage.”  This also included the use of dictionaries and its usage in other authorities.

On the one hand, in support of their position, the insureds provided the following examples:

• Definition  of “windstorm” from Encyclopedia Britannica: “a wind that is strong enough to cause at least light damage to trees and buildings and may or may not be accompanied by precipitation.  Wind speeds during a Windstorm typically exceed 55 km (34 miles) per hour.  Wind damage can be attributed to gusts (short bursts of high-speed winds) or longer periods of stronger sustained winds.  Although tornadoes and tropical cyclones also produce wind damage, they are usually classified separately…”
• Expert testimony from a certified meteorologist who stated that tornadoes and windstorms are materially different in the way they are measured, classified, warned about, and defined within the meteorological profession.  In his report, the meteorologist stated that the National Weather Service does not issue any alerts or warnings for windstorms as it does for tornadoes.  He further stated that the American Meteorological Society’s Glossary of Terms (“AMS Glossary”) does not define a tornado as a windstorm, nor does it mention a tornado in the definition of a windstorm.  The definition of tornado in the AMS Glossary also indicates that other weather events involving swirling winds, such as gustnadoes and dust devils, are classified differently than a tornado.
• Media coverage of weather events in Dallas as evidence that the two are classified separately.  For example, in June 2019, a windstorm with straight-line winds hit Dallas.  The Dallas Morning News described that event as a windstorm, not a tornado.
• Several statutes refer to windstorms and tornadoes as distinct risks: Tex. Ins. Code § 252.003 (insurers are permitted to sell separate policies for tornadoes and windstorms and are taxed accordingly); Tex. Ins. Code. § 1806.102(b)(12)(A) (stating subchapter C of chapter 1806 of the Code does not apply to the writing of “insurance coverage for any of the following conditions or risks: (A) weather or climatic conditions, including lightning, tornado, windstorm, hail, cyclone, rain, or frost and freeze”); Tex. Prop. Code. § 92.0562 (a landlord may delay repairs “if the landlord’s failure to repair is caused by a general shortage of labor or materials for repair following a natural disaster such as a hurricane, tornado, flood, extended freeze, or widespread windstorm.”); Tex. Ins. Code § 542A.001(2)(C) (defining “claim” as a first-party claim arising “from damage to or loss of covered property caused, wholly or partly, by forces of nature, including an earthquake or earth tremor, a wildfire, a flood, a tornado, lightning, a hurricane, hail, wind, a snowstorm, or a rainstorm.”); Tex. Ins. Code § 2002.006 (referring to tornadoes, windstorms, hail, cyclones, rain, frost, freeze, and lightning as separate “weather or climatic conditions”).

On the other hand, the insurer made the following arguments in support of its contention that a tornado is a type of windstorm and that the deductible “unambiguously applies to damage caused by a tornado”:

• In Fireman’s Ins. Co. of Newark, N.J. v. Weatherman (193 S.W.2d 247 (Tex. App.—Eastland 1946)), on appeal, the Court concluded that the trial court sufficiently defined “windstorm” as: “something more than an ordinary gust of wind, no matter how prolonged, and though the whirling features which usually accompany tornadoes and cyclones need not be present, it must assume the aspect of a storm.”

In Mankoff, the insurer asserted that the definition of “windstorm” approved in Weatherman had been consistently adopted in Texas cases and, thus, the term was not ambiguous.  However, the Court noted that neither Weatherman nor any of the other cases cited by the insurer determined whether the term “windstorm” was an unambiguous term as a matter of law or whether “tornado” was encompassed in the term “windstorm.”

• Texas cases have uniformly applied windstorm coverage to damage caused by tornadoes.  Nevertheless, the Court explained that in those cases, the parties did not dispute an insured’s claim for tornado damage in policies covering windstorm damage, and the courts did not analyze the definition of windstorm or determine if the term was ambiguous.
• Various dictionary definitions of “tornado” describing it as a violent storm with whirling winds or a violently rotating column of air, and, in two definitions, describing a tornado as “a localized, violently destructive windstorm occurring over land” and “a highly localized, violent windstorm occurring over land.” 
• One thesaurus, which included “windstorm” as one of ten synonyms of a tornado.
• The National Weather Service categorizes tornados based on wind speed.

In light of these positions, the Court held that the term “windstorm” as used in the policy was reasonably susceptible to more than one meaning, and that it was therefore ambiguous.  It explained that the parties “cite[d] authorities defining ‘windstorm’ in different ways,” and “definitions provided by those authorities were facially reasonable but conflicting.”  The Court also concluded that because the insureds’ interpretation of the term was reasonable, it was required to construe the deductible in their favor.

Conclusion

As demonstrated in Mankoff, lines can be drawn to distinguish otherwise seemingly congruous terms.  For that reason, insurers are advised to incorporate explicit definitions in all policy forms.  Failure to do so could open the door to conflicting interpretations and findings of ambiguities.  While terms may appear plain on their face, insurers and their underwriters should consult with industry experts as a prudent approach to mitigate litigation exposure.