Friday, January 9, 2009

Hailstorms: Matching Roofing and Siding Strategies

Hailstorms can happen anywhere that thunderstorms occur. Thunderstorms have the potential to produce hail the size of a BB or the size of a grapefruit. Severe hailstorms can cause more damage than tornadoes, simply because the area of a hailstorm can be much greater than that of a tornado. Hail can damage everything it strikes, whereas a tornado can flatten one dwelling while the house next door doesn’t lose a shingle.

We are just around the corner from Spring, when hailstorms begin to pop up with regularity. You can be ready by following the strategy in this article.

Nearly every time there is a big hailstorm that causes widespread damage to cars, homes and businesses, the issue of “matching” rears its ugly head. But there is a way that you can solve the “matching” disputes between you and your insurance company and get paid all you are entitled to collect.

Typically, when a hailstorm occurs, it strikes property at an angle. So, while one side of your roof might get pounded, the opposite side may have no damage at all. The hailstones might hit one slope of the roof really hard, while just skipping across the other slope. The same is true with exterior siding.

So, your insurance company adjuster may inspect your damage, and replace the damaged roofing or siding. But, that might cause an additional problem:

What if the new roofing or siding doesn’t match the old roofing or siding? Many times this occurs when the old material has been discontinued by the manufacturer. The new material might be of a different color or different dimension than the old material. For example, you might have 4” lap vinyl siding, but the manufacturer now produces 4” lap siding with a slightly different color or texture. It does not match.

You, the policyholder, now have an additional loss, which is the value of your home. If the siding or roofing doesn’t match, it diminishes the value of the home. But this part of the loss is indirect damage. The policy states that it only pays for direct damage to property. Many times, adjusters and insurers will rely on a strict interpretation of the policy wording, and state that they do not owe you any additional funds simply because of a matching problem.

However, there is a clause in the Homeowners policy that deals with indirect damage, and can be brought into a “matching” dispute to solve the problem

That clause is found in the Section I – Conditions – D. Loss to a Pair or Set. It says:

In case of loss to a pair or set we may elect to:

1. Repair or replace any part to restore the pair or set to its value before the loss; or

2. Pay the difference between actual cash value of the property before and after the loss.

Not only does this clause cover the direct loss of an item that is a part of a pair or set, but also covers the indirect loss sustained because of the diminished value of the remaining item(s) of the pair or set.

Your adjuster might disagree with this interpretation. He may tell you that this clause only pertains to personal property, such as when a person has one crystal candlestick stolen from a pair, or two plates from a rare set of 12 get broken.

But look carefully in your policy. NOWHERE in the policy does it say that the clause only applies to personal property.

For example, let’s use hail damage to siding. Two sides of the house sustain damage to 12” white aluminum siding with a textured finish. The manufacturer ceased making this siding and now only makes 8” aluminum siding without texture. It clearly does not match. The adjuster wrote an estimate to replace only the damaged siding for $10,000. But replacing all four sides of siding would cost $20,000. We are assuming a replacement cost policy, no depreciation applied.

The insured gets an appraisal of his dwelling, and finds that the dwelling’s pre-loss value was $100,000. After the storm, the dwelling appraises at $95,000. So you can see here that the “set” value of the undamaged siding decreased the home value by $5,000.

To be equitable to the insured, the insurance company should pay the $20,000 to replace all four sides of the home. That settlement process might take a little longer if you have to get an appraisal to prove the diminished value, but you’ll be properly compensated for your loss.

Finally, you the policyholder have legal precedent on your side. On October 12, 2000 in a Minnesota District Court, a judge ruled against American Family Mutual Insurance Company and ordered it to pay claims where there were matching disputes after a hailstorm. (see Min. Stat. {72A.201, Subd. 5(8) (1998)}).

1 comment:

Chris said...

Top article! I loved it completely, brilliant the way you have covered the points, I have really become a big fan of yours! Keep posting this way always, thanks.

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