An Indiana appeals court reversed key parts of a summary judgment for Nationwide, sending coverage and bad-faith claims back toward trial.
The Court of Appeals of Indiana on September 10, 2026 delivered a mixed ruling in a dispute over Nationwide's handling of a homeowners storm claim that has been in litigation since 2021.
The loss occurred in June 2019, when high winds from a nearby tornado dropped a large tree onto a couple's Indiana home. Their Nationwide policy carried a $451,400 dwelling limit and a replacement-cost endorsement that extended coverage up to 150 percent of that limit. The endorsement distinguished between an actual-cash-value payment and a further replacement-cost payment, but the parties disagreed over whether the actual-cash-value component was owed before the homeowners completed repairs.
Nationwide's initial adjustment excluded foundation damage and valued the loss at $226,447.19. The couple challenged the assessment, and an appraisal panel later set the dwelling replacement cost at $557,106.51 - roughly $330,000 higher. Nationwide paid to the base policy limit but withheld a $16,777.40 actual-cash-value amount tied to the endorsement. It also paid a $12,780.46 inflation-protection amount only in May 2023, more than two years late, after the issue surfaced in discovery.
The homeowners never rebuilt. Nationwide issued the demolition payment three days past the policy's post-appraisal deadline, denied a six-month extension request, and maintained the couple had missed the endorsement's two-year completion window.
The court affirmed judgment for Nationwide on three breach theories: the low initial estimate, the three-day demolition delay and the cured inflation-protection shortfall. None, it held, amounted to a material breach once later payments had made the couple whole.
It reversed on the rest. The endorsement's language on when the $16,777.40 was payable was ambiguous, the court found, noting that Nationwide's own adjuster testified she could not identify a reason the amount had not been paid. The court also found genuine factual disputes over whether the insurer's own claims-handling conduct - instructions not to repair without approval, an 18-month delay in approving foundation work, and a resulting window of fewer than 90 days to demolish and rebuild during documented pandemic shortages - excused the couple from the rebuild deadline.
It reversed summary judgment on the bad-faith claim as well, including the couple's request for punitive damages, finding designated evidence bearing on all four categories of insurer bad faith recognized under Indiana law. It also reversed the wholesale striking of the couple's claims-handling expert, calling the ruling overbroad. The case returns to the trial court for further proceedings.
