A Chattanooga steelmaker alleges its insurer paid less than 3% of a $574,500 hail claim, leaning on an engineering report to dispute the rest.
The lawsuit, filed on May 4, 2026 in the US District Court for the Eastern District of Tennessee, pits Gentry Steel Inc. against Motorists Commercial Mutual Insurance Company - the carrier that does business as Motorists Insurance and belongs to the Encova Mutual Insurance Group. Gentry is pressing two claims: breach of its commercial property policy and bad-faith refusal to pay under Tennessee's insurance statute.
The story Gentry tells in its filing is a familiar one in commercial property circles. The company says it runs a structural steel fabrication business out of a site on East 28th Street in Chattanooga, with an office building alongside manufacturing and warehouse structures. Its Encova policy, in force from June 15, 2024 through June 15, 2025, covered "direct physical loss or damage to the Property caused by covered perils, including hail and windstorm."
On or about May 8, 2025, according to the filing, a hailstorm rolled through and caused extensive damage and water intrusion at the property. Gentry says it brought in T.U. Parks Construction Company and JDH Company, Inc. to assess the harm. Their conclusion, as described in the complaint: the roofs of two buildings needed full replacement, and a third was damaged beyond repair. Total estimated cost - $574,500.
Encova's response, the filing says, was a partial payment of $16,735.07 issued on August 5, 2025. According to Gentry, that check covered only the office building. The much larger manufacturing and warehouse roofs, the company alleges, got nothing.
The carrier's reasoning, according to the complaint, leaned on an inspection by EFI Global, Inc. on June 23, 2025. That report allegedly concluded hail damage was confined to the entry awning, skylights, and translucent panels between two bays. The broader roof problems, Encova said, were the product of "age-related wear, long-term deterioration, prior repairs, coating failure, and installation-related issues."
Gentry isn't buying it. The company says the close timing between the hailstorm and the roof failures tells a different story, and that the wear-and-tear explanation is a pretext for ducking a covered loss.
After Gentry sent a statutory demand letter on March 17, 2026, Encova replied on April 7, 2026, saying it "disagrees with the assertion that additional payment in the amount demanded is owed" and that the claim was "properly investigated, fairly evaluated, and appropriately paid." That refusal, Gentry argues, opens the door to a statutory penalty of up to 25% of the carrier's policy liability, plus attorneys' fees.
For claims professionals watching from the sidelines, the case is a reminder of how a causation dispute - hail versus wear and tear, contractor estimate versus engineering report - can escalate into a bad-faith fight, particularly under state statutes that put insurers on a clock to respond.
The allegations have not been tested in court. Encova has not yet filed a response, no judge has ruled.
