Hail and Coverage Exclusions Which Do Not Apply | Property Insurance Coverage Law Blog

Hail damage is a topic of discussion at the Rocky Mountain Association of Public Insurance Adjusters (RAPIA) fall seminar. Mike Poli gave a speech, Traps for the unwaryand pointed to an Arizona insurance ruling,¹ which contains an excellent discussion of how wear and tear, improper maintenance, and concomitant cause exclusions operate in the context of hail loss.

The court said this about the usury exclusion:

Normal wear.

The relevant section of the policy states:

[I.]B. Exclusions

…

2. We will not pay for any loss or damage caused by or resulting from any of the following:

…

L. Other types of losses (1) Wear and tear;

…

But if an excluded cause of loss listed in paragraphs (1) to (7) above results in a “specified cause of loss” or broken building glass, we will pay for the loss or damage caused by that “specified cause of loss” of specified loss”. ” or broken building windows.

The policy clearly and unambiguously excludes warranty when wear and tear is the sole cause of the damage. The last sentence quoted above, however, makes it clear that the coverage exclusion in section IB2.1 does not apply — in other words, the policy provides coverage — when an “excluded cause of loss” results in a “specified cause of loss”. ‘The term “specified cause of loss” is defined in section IH11 to include “hail”. Therefore, by replacing “excluded cause of loss” with “normal wear and tear” and “specified cause of loss” with “loss due to hail”, the clause reads as follows: “if [wear and tear] results in [loss from hail]we will pay for the loss or damage caused by this [hail].’ Therefore, when wear and tear contributes to hail damage, the contract provides coverage for hail damage. Additionally, the policy covers any damage resulting from hail, such as water entering the roof as a result of hail.

Regarding the exclusion for insufficient maintenance, the court noted the following:

Insufficient maintenance.

The relevant section of the policy states:

[I.]B.Exceptions…

3. We will not pay for any loss or damage caused by or resulting from any of the following paragraphs a to c. But [i]If an excluded cause of loss listed in paragraphs a through c results in a covered cause of loss, we will pay for the loss or damage caused by that covered cause of loss.

…

vs. Negligent work

Faulty, inadequate or defective… Maintenance;

For the purposes of this question, the “excluded cause of loss” can be defined as “inadequate maintenance.” The “covered cause of loss” may be stated as “hail” or “hail loss” because hail presents a “risk of physical loss” and is not excluded by the policy. Using these substitutes, the key provision reads: “if [inadequate maintenance] results in [loss from hail]we will pay for the loss or damage caused by [the hail].’ This produces the same result as excluding wear and tear discussed above. So, when improper maintenance leads to hail damage, the policy provides coverage for hail damage.

The court then drew this very simple conclusion regarding the damage caused by the hail:

The policy provides coverage against damage caused by hail, whether the damage is the sole or partial cause of the loss. The policy does not provide coverage when hail is not responsible for the loss.

Insurance companies and their adjusters often abuse the wear and tear exclusion as a basis for denial, as noted in Why is the carrier so quick to assert the wear and tear exclusion? I strongly encourage those who have questionable denials due to attrition to read the Insurance Journal article by Bill Wilson, Wear Exclusions Worn and torn.

Thought of the day

Nothing is permanent in this wicked world, not even our problems.