One day a hailstorm hits a bike manufacturer's warehouse, and the property owner is overwhelmed by the loud sounds of the hail hitting the metal roof. But when the adjuster gets up on the roof, the dents turn out to be minor, arguably cosmetic.
Notable Timestamps
[ 00:18 ] - Despite the dents appearing to be cosmetic, the insured requests a new roof.
[ 01:08 ] - Jeff and Mike compete for the best "dad joke."
[ 01:53 ] - The hail was "direct" and "physical", but was it a "loss"? If the roof is now leaking, that would qualify as damage because it is a loss of functionality. Without a leak, it's a harder question.
[ 04:05 ] - Another claim is that the dents lessened the life expectancy of the roof. That becomes a fact question.
[ 06:40 ] - The "ugly" factor? Another claim is that the dents lessened the eventual sale price of the building. Many loss in value claims fall under the deductible, but others can qualify as a direct physical loss.
[ 09:50 ] - If the dent is hard to see, that can impact the loss in value claim, but not necessarily defeat it.
[ 10:40 ] - A third argument for coverage would be that the dents invalidated the insured's warranty on the roof, and that loss should be considered a "loss" as in "direct physical loss".
[ 14:00 ] - Some insurers have argued that it's wasteful to replace a roof that is not functionally impacted, but this argument is unlikely to be successful.
[ 15:40 ] - Replacement Cost may be significantly higher than Actual Cash Value in a scenario like this.
[ 16:16 ] - Jeff provides a recap of the scenario and the points above.
[ 18:35 ] - We'd like to shout out "The Future of Insurance," PLRB CEO Bryan Falchuk's podcast.
Your PLRB Resources
Is Hail Splatter a Direct Physical Loss? – PCQ.2019.09.26.jch.a - https://www.plrb.org/documents/is-hail-splatter-a-direct-physical-loss-pcq-2019-09-26-jch-a/?search=cosmetic
Webinar: Coverage Challenges with Common Endorsements (Includes discussion of Cosmetic Damage) - https://www.plrb.org/courses/coverage-challenges-with-common-property-endorsements/
Annotation - Cosmetic Damage HO 06 43 & HO 06 44 (HO16E) - https://www.plrb.org/documents/cosmetic-damage-ho-06-43-ho-06-44-ho16e/
Employees of member companies also have access to a searchable legal database, hundreds of hours of video trainings, building code materials, weather data, and even the ability to have your coverage questions answered by our team of attorneys (https://www.plrb.org/ask-plrb/) at no additional charge to you or your company.
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The views and opinions expressed in this resource are those of the individual speaker and not necessarily those of the Property & Liability Resource Bureau (PLRB), its membership, or any organization with which the presenter is employed or affiliated. The information, ideas, and opinions are presented as information only and not as legal advice or offers of representation. Individual policy language and state laws vary, and listeners should rely on guidance from their companies and counsel as appropriate.
Music: "Piece of Future" by Keyframe_Audio. Pixabay. Pixabay License.
Font: Metropolis by Chris Simpson. SIL OFL 1.1.
Icons: FontAwesome (SIL OFL 1.1) and Noun Project (royalty-free licenses purchased via subscription).
Sound Effects: Pixabay (Pixabay License) and Freesound.org (CC0).
Hail Sounds: Buckine. Freesound.org. https://freesound.org/people/Buckine/sounds/574928/
