A Colorado homeowners' association is suing QBE Insurance Corporation, claiming the insurer withheld more than $2 million in benefits after a 2023 hailstorm.
Precedent at Stony Creek Homeowners Association filed the lawsuit in Denver County District Court on February 24, 2026. The case was later removed to the US District Court for the District of Colorado. The suit accuses QBE of breach of contract, statutory bad faith, and common law bad faith in its handling of a large-scale property damage claim.
According to the court filing, the trouble began on June 22, 2023, when a significant wind and hailstorm struck the Littleton, Colorado area. The storm brought winds of 55 to 60 miles per hour and hailstones up to two inches in diameter. A tornado reportedly touched down approximately twelve miles away. The HOA says all thirty buildings in its community sustained catastrophic damage to roofs, siding, gutters, windows, screens, and garage doors.
The HOA reported the loss to QBE within days. A QBE adjuster inspected the property in mid-July 2023 and, according to the filing, verbally confirmed that every roof in the community was "totaled". By October 2023, QBE had agreed to pay more than $2.1 million in replacement cost for roof and gutter damage.
But the dispute centers on what came next - or rather, what didn't.
The filing alleges that QBE failed to address damage beyond the roofs for months. When it finally responded in May 2024, it offered $126,313.19 to cover the additional exterior elevation damage, including siding, window screens, and other damages. The HOA's contractor had estimated siding and trim repairs alone at approximately $739,000. A more comprehensive estimate submitted in October 2024, covering all non-roof repairs, came in at over $1 million.
QBE allegedly stopped communicating after that submission, not responding until January 2025 - and only after the HOA filed a complaint with the Insurance Commission. When QBE did respond, it issued a reservation-of-rights letter questioning whether the supplemental damage was even caused by hail.
QBE later issued an additional payment of roughly $494,891 in May 2025, but the HOA contends that was still far short of what was owed. The filing also claims QBE has not released approximately $400,000 in recoverable depreciation for roof repairs that have already been completed. In total, the HOA says it has documented at least $2,265,459.41 in withheld benefits.
The HOA is seeking compensatory damages, statutory penalties under Colorado's bad faith statutes - which allow for up to two times the withheld benefits - along with attorneys' fees and costs. A jury trial has been demanded.
It is worth noting that the case is still in its earliest stages. No court determination has been made on the merits, and the allegations reflect only one side of the dispute. QBE has not yet responded in court filings included in the record.
For the insurance industry, the case is another entry in Colorado's active bad faith litigation landscape - particularly around hailstorm claims, where statutory penalties can significantly amplify exposure for carriers.
The case is Precedent at Stony Creek Homeowners Association, Inc. v. QBE Insurance Corporation, Case No. 1:26-cv-01154, in the U.S. District Court for the District of Colorado.
