A Nashville gas station owner is taking Erie Insurance Company to federal court, accusing the insurer of underpaying a tornado damage claim after a December 2023 storm.
Yellowbird Oil & Gas, Inc., which operates a gas station and convenience store at 3740 Dickerson Pike, alleges that an EF2 tornado struck the Nashville area on December 9, 2023, with winds reaching up to 80 miles per hour. The filing states that flying debris from the storm punctured the building’s EPDM rubber roof, allowing rainwater to enter and damage the substructure and equipment inside.
Yellowbird, which held a commercial property insurance policy with Erie Insurance, asserts that it paid all premiums and complied with policy terms. The policy, according to the document, covered two buildings on the property, including the gas station and a canopy, and insured against “direct physical loss” unless specifically excluded. Windstorm and hail were listed as covered risks, subject to a separate deductible.
After the storm, Yellowbird engaged Premier Claims, LLC to assess the damage. Their estimate placed the total repair cost at $141,095.86, citing extensive roof damage and water intrusion. Erie Insurance, in turn, hired an engineer who concluded that while the tornado had damaged the roof, the “majority of the water infiltration and water intrusion” did not result from the tornado. The insurer offered to cover only isolated patch repairs, valuing the work at $3,204.77, and after applying a $2,500 deductible, calculated its payment at $704.77.
Yellowbird contends that Erie Insurance ignored evidence, including infrared imaging and documentation indicating moisture saturation in the roof’s substructure. The company also claims that patching over saturated areas would violate state and federal building codes. Despite these concerns, Erie Insurance and its engineer allegedly discounted the additional evidence and did not conduct further moisture testing.
The business further alleges that Erie Insurance’s handling of the claim was a breach of contract and “vexatious and unreasonable,” which could subject the insurer to statutory penalties and attorney fees under Tennessee law. Yellowbird is seeking damages up to the policy limits, a statutory penalty of 25 percent of the amount owed, attorney fees, and punitive damages, arguing that the denial was intentional and reckless.
No final determination has been made, and the case remains at the early stages in federal court. The dispute highlights the issues that can arise for insurers and commercial policyholders when severe weather causes property damage, especially as policy language and claims handling practices are challenged in court.
