Appeals Court Reverses Landslide Insurance Ruling

A Texas appeals court overturned a summary judgment favoring two Travis County homeowners whose backyards collapsed into a creek.

Updated on Nov. 1, 2026 in Insurance

Appeals Court Reverses Landslide Insurance Ruling

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The Third Court of Appeal in Austin reversed a Travis County district court's summary judgment against Privilege Underwriters Reciprocal Exchange, which had denied claims from homeowners whose backyards collapsed down an 80-foot slope. The case has been sent back to the 250th District Court of Travis County for further hearings and evidence.

Why it matters

The ruling turns on whether a landslide exclusion in a homeowners policy applies when natural and human-related causes combine. For policyholders in Texas, it signals that exclusion clauses will be read strictly against insurers.

The appeals court reversed a summary judgment and an award of statutory interest under the Texas Prompt Payment of Claims Act for two Travis County homeowners. Expert geotechnical reports from Terrance Zich and Andrew Davidoff did not agree on whether human activity contributed to the collapse.

The players

Privilege Underwriters Reciprocal Exchange (PURE)

PURE is the Texas-based insurer that denied the landslide claims under its earth movement exclusion and was found by the appeals court not to have excluded combined natural and human-caused landslides.

The details

Michael MacDougall and the estate of George S. Heyer Jr. filed claims under high-end homeowners policies after their backyards collapsed toward a local creek, leaving both homes unsafe. PURE denied the claims under its standard earth movement and landslide exclusion, prompting suits for breach of contract and late payment.

October 30, 2026: The Third Court of Appeal issued its ruling overturning the summary judgment.

Roadmap

Texas homeowners insurance disputes over exclusion language have increasingly turned on whether a loss stems from natural or human causes. This ruling aligns with a strict-construction approach that places the burden of clearly stating exclusions on the insurer.

Homeowners with earth movement or landslide exclusions should review whether their policies address combined natural and human-caused losses. Policyholders facing denied claims may have grounds to pursue breach of contract and prompt payment claims under Texas law.

The takeaway

Homeowners should read their policy's exclusion language carefully and document any pre-loss site conditions. Claimants denied coverage should keep records of their insurer's communications, since late payment can carry statutory interest under Texas law.