Church Mutual was hit with a $1.75 million jury verdict after a court found it mishandled a storm damage claim by a Georgia church.
The dispute began after Central Baptist Church of Albany, Georgia, suffered roof damage during a 2014 storm. The church was insured under an “all-risks” commercial property policy with Church Mutual Insurance Company. Following the storm, the church submitted a claim, and the insurer’s adjuster estimated repairs would cost $2,300. Church Mutual paid $1,302.99, accounting for a $1,000 deductible.
The church disagreed with the insurer’s assessment and obtained its own evaluations. MidSouth Construction estimated the damage at $1,377,131.03, and The Howarth Group at $1,480,310.71. Both firms concluded that the damage warranted full replacement of the asbestos tile roofs and identified slate as a suitable substitute. The church relied on a clause in the policy requiring that repairs be of “comparable kind and quality.”
In December 2016, the church sued Church Mutual for breach of contract in the US District Court for the Middle District of Georgia. It sought to recover $1,420,536.61 for roof replacement. The bad faith claim was bifurcated and set aside for later proceedings.
Then, in October 2018, Hurricane Michael struck, damaging the property again. This time, the church was insured by AmTrust North America. It filed a claim and obtained an estimate from Strategic Roofing totaling $718,469.20. Unlike the prior estimates, this figure didn’t account for replacing the original asbestos tiles with like materials. The church didn’t tell Church Mutual about this second claim or the new estimate.
When Church Mutual found out, it tried to argue that the lack of disclosure amounted to a material misrepresentation that voided coverage. But the trial court disagreed, ruling that there wasn’t enough evidence for a jury to reasonably find that a misrepresentation occurred.
At trial, the insurer then formally withdrew its affirmative defenses - including fraud - when questioned by the judge. The church presented evidence showing increased construction costs over time due to delayed payment. Church Mutual did not object to the testimony and agreed to a jury instruction defining “replacement cost” as the cost of replacing the property with comparable materials, without reference to the time of loss.
The jury awarded $1.75 million in damages. Church Mutual challenged the verdict under Rule 59, arguing that the award was speculative, contradicted the policy language, and amounted to double recovery when combined with prejudgment interest. The district court rejected these arguments, and on July 21, 2025, the Eleventh Circuit affirmed.
The appellate court held that the insurer had waived its misrepresentation defense and agreed to the jury instructions that permitted consideration of increased construction costs. It also found no double recovery, reasoning that interest and price inflation compensated for separate harms - the delay in payment and the rise in rebuilding costs.
The case offers a sharp reminder to insurers: failing to preserve key defenses or object to jury instructions can prove costly, especially in large-scale commercial property disputes.
