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Court Addresses Damages Under Homeowners Insurance Policy

Court Addresses Expert and Lay Testimony of Damages Under Homeowners Insurance Policy

Woodrum v. Georgia Farm Bureau Mutual Insurance Company, 347 Ga. App. 89 (2018)


During a storm, a tree landed on a homeowner’s house causing damage to the home’s foundation.  The homeowners filed a claim on their homeowners insurance policy to recover the resulting damages.  After the insurance company paid some of the damages, the homeowners filed suit to recover the remaining damages.

The homeowners presented an affidavit and testimony of a contractor regarding the extent of damage and the resulting loss of value.  The contractor testified that the home lost 25 percent of its value as a direct result of the damage to the home’s foundation.  The insurance company sought to exclude the contractor’s testimony, arguing he was not qualified to testify as to diminution of value as an either expert or lay witness.  The trial court agreed with the insurance company and excluded the testimony of the contractor.  Because it struck the homeowners’ sole evidence of damages, the court dismissed their claim, and the homeowners appealed

The Court of Appeals agreed that the contractor did not use appropriate methodology to present expert opinion as to diminution in value.  However, the trial court erred in excluding the contractor’s testimony as a lay witness.  The court explained that under O.C.G.A. § 24-7-701(b), lay-witness testimony is permitted concerning value.  In other words, one need not be an expert to give an opinion on the value or diminution in value.

Under O.C.G.A. § 24-7-701(a), lay witness testimony is permitted if it is rationally based on the perception of the witness; helpful to the determination of a fact in issue; and not based on scientific, technical, or other specialized knowledge requiring expert testimony.  With respect to lay testimony of value, the court agreed that the witness need not be an expert or dealer to form a reasonable opinion.

The court concluded that contractor’s lay opinion was admissible based on a number of factors.  These included, for example, the contractor was licensed, he had experience in home building and remodeling, he had constructed and repaired many homes, he was familiar with the cost of construction and the valuation of homes based on his professional experience, he reviewed the specific damage in this case, he witnessed the damage to the slab foundation, he witnessed the impact of such damage to the structural integrity of the house, he was familiar with the impact of structural damage to the value of a home, and other important factors.

In short, the court agreed with the insurance company that the contractor could not testify as an expert on the value of the home.  Nevertheless, based on his experience and observations, he was suited to testify as a lay witness concerning the house’s diminution in value.  As a result, the trial court should have allowed the opinion testimony of the contractor in support of the homeowners’ claims.

NOTE: This opinion is subject to the physical precedent rule, Georgia Court of Appeals Rule 33.2.