Legal Action Against Chubb Insurance: ALE Coverage and Homeowner Claims
A couple in Minnesota, Mohammad and Mona Sabri, has initiated legal action against Chubb Indemnity Insurance Company over unresolved issues related to an appraisal award and the termination of living-expense coverage. They have filed a lawsuit in the US District Court for the District of Minnesota, alleging that Chubb has not fully compensated their fire-related loss and is unwilling to extend Additional Living Expenses (ALE), which they attribute to insurer delays.
The case documents reveal that the Sabris' Edina residence became uninhabitable after a fire on March 25, 2024. Under Chubb's Masterpiece homeowner's plan, their policy featured a dwelling limit of $5,262,000. Following disputes over repair costs, the couple invoked the policy's appraisal clause in February 2025.
On December 10, 2025, the appointed appraisal umpire determined a dwelling loss valuation, proposing a "Base Award Total" of $3,050,000 plus an additional $610,000 for General Contractor Overhead and Profit, specified as "Paid When Incurred." Chubb has paid the initial reconstruction amount, but the Sabris claim the $610,000 remains unpaid. They argue Chubb's demand for a "properly executed and notarized general contractor agreement" conflicts with policy or appraisal terms since the "Paid When Incurred" clause only requires substantiating incurred costs.
The dispute also centers around ALE coverage. Chubb's policy specifies ALE from the loss date until options like "up to two years from the date of loss," or property habitability, whichever is later. With the two-year mark approaching on March 25, 2026, Chubb claims ALE will cease. The Sabris argue their home is still uninhabitable, and necessary restoration time remains.
Reconstruction delays, including disagreements over a fire-damaged steel beam necessitating an engineering plan, are blamed on Chubb's actions. A separate federal lawsuit by Chubb, filed in August 2025 and later dismissed, allegedly extended the timeline five months by attempting to halt the appraisal process.
The Sabris' claims include breach of contract for unpaid funds, ALE extension failure, a declaratory judgment on Chubb obligations, and emotional distress claims. They seek $610,000, continuation of ALE payments (estimated at $12,000–$13,000 monthly), and at least $5 million for emotional distress.
Chubb has yet to respond in court, and no legal verdicts have been reached. The insurance industry watches this case closely for interpretations of "Paid When Incurred" requirements and the impact of insurer-related delays on ALE coverage durations.