A Mississippi property manager says its insurer slashed a fire claim using a renovation endorsement - on a property never undergoing renovation.
Hagan Property Management LLC filed suit on March 16, 2026, in the US District Court for the Southern District of Mississippi against Fortegra Specialty Insurance Company, docketed as No. 3:26-cv-00176, alleging the insurer substantially underpaid a fire loss by misapplying a policy endorsement designed for properties under active renovation.
According to the lawsuit, Hagan owned a two-story rental home with multiple units in Meridian, Mississippi, insured under a Fortegra policy with coverage limits of $461,840. On or about March 17, 2025, a fire damaged the property and, according to the filing, substantially destroyed the structure.
Hagan reported the loss, and Fortegra acknowledged the claim and initially provided coverage. But the payment that followed - $56,210.12 - came in at a fraction of the policy limit.
The reason, according to the lawsuit, was a policy endorsement titled "Modified Vacancy Extension for Renovation." That provision, as quoted in the filing, states that for "all locations reported as undergoing renovation," claim payments "will be limited to invested capital only." The endorsement defines invested capital as the actual purchase price of the property, minus the land value, plus "verifiable cost of improvements completed prior to the loss."
Here is where things get interesting for insurance professionals.
Hagan alleges the property was not undergoing any renovation at the time of the fire. No construction, no repairs, no renovation work of any kind. The property had been vacant for less than 30 days.
Yet Fortegra, according to the filing, took the position that the endorsement applied and capped the payout accordingly. In a January 16, 2026 letter, the insurer reportedly stood firm, stating that no further amounts were owed because Hagan had not provided documentation of "verifiable costs of improvements" completed before the fire.
The lawsuit calls this position internally inconsistent. Hagan argues the insurer cannot simultaneously maintain that the property was not renovated while relying on an endorsement that, by its own language, applies only to properties undergoing renovation. Reading it any other way, Hagan contends, would stretch the endorsement beyond its plain terms and let the insurer cap payments on any claim - whether or not renovation was actually happening.
The case puts a practical question in front of underwriters, claims handlers, and policy drafters: when exactly does a renovation endorsement kick in, and can it be used to limit a claim on a property where no renovation is taking place?
Hagan has brought claims for breach of contract, negligence and gross negligence, and bad faith, and is seeking compensatory damages, punitive damages, and attorney's fees, among other relief. A jury trial has been demanded. No determination on the merits has been made.
