Danny M. Howell, Esq.
Howell & Rowlett PLLC
June 10, 2024
An all-too-common scenario following major hailstorm damage to a large asphalt shingle roof of a church, commercial building or large home is this: the church or owner engages a public adjuster, who documents extensive hail damage to the roof, requiring roof replacement due to the degree to which the roof’s ability to prevent water intrusion has been compromised, and confirms that such damage is covered under the owner’s building property insurance coverage. (Major hailstorm cases often involve churches as they tend to be very large structures with shingle roofs.) The public adjuster brings in a structural engineer to confirm the extensive damage to the roof, that it was caused by the hailstorm, and that it was not due to wear and tear, defective construction, or a prior storm. After the owner submits a proof of loss, the insurer hires its own structural engineer, who inspects the roof and produces a report asserting that the roof was not damages at all by the hail, and attributes any damage to the shingles to one of the potential causes that the owner’s engineer has ruled out – or, alternatively, acknowledging the hail damage but claiming it is inly cosmetic and doesn’t impact the roof’s function or reduce the roof’s useful life. The insurer denies the claim, forcing the church or owner to sue to establish coverage.
Insurers deny hailstorm claims by relying on policy provisions limiting coverage to damage that causes “loss of use” or “loss of use or damage”, with those terms usually being undefined in the policy, or relying on exclusions for cosmetic damage or wear and tear.
A growing number of reported cases from around the country reject the insurer’s reasons for denying hailstorm and windstorm claims. Here are a few:
* Holder v. State Farm Fire & Cas. Co., 2021 U.S. Dist. LEXIS 202999 (S.D. Miss. Oct. 21, 2021)
State Farm's policy provides coverage for "accidental direct physical loss" from wind and hail but does not define "accidental direct physical loss" or any of the individual terms, and, as far as the court has found, does not otherwise purport to limit coverage to "damage" that "has measurably reduced the integrity or functionality of the overall shingle," nor does it purport to limit coverage "to damage" to a roof (or shingles) that is "sound" or at a certain stage of its useful life. The policy is at least ambiguous and would appear to cover any physical damage, irrespective of the prior age or condition of the roof.
* Excel Constr. Grp. v. GuideOne Mut. Ins. Co., 2023 U.S. Dist. LEXIS 46613 (D. Colo. Mar. 20, 2023)
The insurer’s “experts will not be permitted to offer opinions about cosmetic or functional damage in this case. It is undisputed that the Policy does not contain an exclusion for ‘cosmetic’ damage, a requirement that damage be ‘functional’ in order to be covered, or any similar provision. Accordingly, any expert opinions regarding purely ‘cosmetic’ damage here are irrelevant and have considerable potential to confuse and unfairly prejudice the jury.
* Kaw Drive v. Secura Ins., 2020 U.S. Dist. LEXIS 193435 (D. Kan. Oct. 19, 2020)
The court prohibited an insurer’s expert from referring specifically in his testimony to "damage" to the roof where his opinion was based on engineering definition of functional damage to mean a roof's diminished water-shedding capability or life expectancy but policy did not limit coverage to functional damage and instead was conceded to cover even cosmetic, non-functional damage, such as a dent);
* Lead GHR Enters. v. Am. States Ins. Co., 2014 U.S. Dist. LEXIS 138864 (D.S.D. May 15, 2014)
It seems axiomatic that a dented roof is worth incrementally less than an undented roof. Not only has the aesthetic value of the roof been reduced, but so too has the hotel's potential resale value. To hold otherwise would require the court to ignore common sense. Moreover, the court is incredulous that American States would have ordered Mr. Shopshear to prepare a repair estimate for twenty-five percent of the left upper slope of the roof, the gable and trim, and the air conditioning condenser unit fins if it in fact believed that no damage had occurred. American States has not presented evidence to the court indicating that the condition of the roof was so bad prior to the hailstorm that it could not be further damaged as a result of the hailstorm.
* Advance Cable Co., LLC v. Cincinnati Ins. Co., LLC, 788 F.3d 743, 747 (7th Cir. 2015)
Advance is not asking for coverage of intangible damage. Rather, it is claiming that hail caused visible indentations to the surface of its roof. This denting changes the physical characteristics of the roof and thus satisfies that language of the policy.
Our firm is available to represent policyholders in disputes involving hail and wind damage to roofs. This article is not intended to provide legal advice. Instead, your entitlement to insurance coverage is dependent on the facts of your case, the terms of your policy, and the law in your jurisdiction governing the policy and the claim.
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