After a storm, a warehouse roof seems to leak more often, and a manager notices some water pooling on the edge. The adjuster's inspection reveals only minor dents, and the policy has a cosmetic damage exclusion. The manager argues the damage is not cosmetic.
Notable Timestamps
[ 00:19 ] - The manager even hires an expert to contest coverage.
[ 01:25 ] - Tim and Mike discuss the leaks in the PLRB offices.
[ 02:46 ] - See prior episode "That Damage is Just Cosmetic!" for the version of this scenario with no exclusion.
[ 03:50 ] - When cosmetic damage exclusions first debuted, many courts found the clause ambiguous.
[ 05:13 ] - Let's say there's no leak, just pooling. In Dragoo v. Allstate Veh. and Prop. Ins. Co., No. 4:16-CV-984-O, 2018 WL 1536639 (N.D. Tex. 1/05/18), cosmetic damage was read as damage that "only changes its appearance."
[ 06:30 ] - If the damage increased the likelihood of future damage, that may not be considered cosmetic.
[ 07:20 ] - In Fisher v. Am. Fam. Mut. Ins. Co., No. 17-CV-01949-MEH, 2019 WL 142204 (D. Colo. 1/09/19), the exclusion applied to components that would not "(1) prevent water from entering the building; or (2) perform any other intended function." The second clause was found to potentially include aesthetics.
[ 08:00 ] - In Valleyview Church of Nazarene v. Church Mut. Ins. Co., No. 2:20-CV-222-Z-BR, 2023 WL 4504595 (N.D. Tex. 6/13/2023), the policy read "cosmetic damage means that the wind and/or hail caused marring, pitting or
other superficial damage that altered the appearance of the roof surfacing, but such damage does not prevent the roof from continuing to function as a barrier to entrance of the elements to the same extent as it did before." This was found to be not ambiguous.
[ 09:11 ] - In J&S Welding, Inc. v. Liberty Mut. Ins. Co., No. 1:22-cv-01122-STA-jay, 2023 WL 6150730 (W.D. Tenn. Sept. 20, 2023), the court said that testimony about the functionality of a metal roof qualified as a matter of scientific, technical, or other specialized knowledge.
[ 12:07 ] - Check for Cosmetic Damage Regulatory Bulletins, e.g. https://www.plrb.org/documents/2017-regulatory-cosmetic-damage-exclusions-wy/ or https://portal.ct.gov/cid/-/media/cid/1_protertycasualty/aerial-imagery-notice.pdf
[ 14:30 ] - Jeff provides a recap of the scenario and the points above.
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Music: "Piece of Future" by Keyframe_Audio. Pixabay. Pixabay License.
Font: Metropolis by Chris Simpson. SIL OFL 1.1.
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