It makes sense that damage from wear and tear is excluded; insurance is not intended to cover general maintenance items. When the shingles are old and need replacing, that is the responsibility of the insured, the same way they are responsible for repainting the walls or replacing wall-to-wall carpet that has outlived its usefulness.

Hidden From View

There is other wording in the policy though that is important to the discussion at hand, and that is for damage hidden from view. In the homeowners policy, part of the covered perils for collapse includes the following:

"(2) Decay, of a building or any part of a building, that is hidden from view, unless the presence of such decay is known to an "insured" prior to collapse; (3) Insect or vermin damage, to a building or any part of a building, that is hidden from view, unless the presence of such damage is known to an "insured" prior to collapse;"

Similar language is also found under the exclusion for mold as an exception: "However, we do insure for loss caused by mold, fungus or wet rot that is hidden within the walls or ceilings or beneath the floors or above the ceilings of a structure if such loss results from the accidental discharge or overflow of water or steam from within:…"

And again under Accidental Discharge or Overflow of Water or Steam: "(4) Caused by mold, fungus or wet rot unless hidden within the walls or ceilings or beneath the floors or above the ceilings of a structure."

The commercial property policy has similar wording under the collapse coverage as follows: "a. Building decay that is hidden from view, unless the presence of such decay is known to an insured prior to collapse; b. Insect or vermin damage that is hidden from view, unless the presence of such damage is known to an insured prior to collapse;"

What is not covered under the commercial policy is "Rust or other corrosion, decay, deterioration, hidden or latent defect or any quality in property that causes it to damage or destroy itself" and "wear and tear".

With these exceptions, the insurer is acknowledging that it is unreasonable to penalize the insured for being unaware of damage that is hidden from view and not readily discoverable. It is one thing to notice water pooling on the bathroom floor and ignore it; it is another to know of some sort of decay hidden behind the walls. It is unreasonable to expect insureds to remove drywall or shingles in order to inspect pipes and decking when there is no obvious sign of damage elsewhere to the building. While no such wording exists for decking to roofs, it is easy to see where your average insured would assume a similar exception should apply to roof decking.

It's important to look closely at the wording in the exclusions. For example, some carriers will deny coverage for wear and tear when an insured could have had no knowledge of such wear and tear had there been no damage to the shingles. The exclusion accurately reads that loss or damage will not be paid if caused by or resulting from … wear and tear. Even though the wear and tear may not have been caused by the hail or wind damage, it most certainly was discovered as a result of the hail or wind damage. Wear and tear that an insured is or has been made aware of previously, such as when extra tarp is laid in weak areas or underlayment was added previously and now has been exposed to additional wear are examples of where the wear and tear exclusion would be appropriate in connection with a newly damaged roof.

An insured cannot be expected to remove the roof in order to check for wear and tear in the decking or other parts not readily observable. But for the damage to the roof from a covered peril, the insured would not be making a claim for damages to the newly exposed areas.

However, when there is no knowledge or previous attempts to add support to a weak roof system there really is no issue of wear and tear until the wind or hail damages the shingles that were protecting the roof surface and those shingles are removed. At that time, the wear and tear becomes known as a result of the covered cause of loss and thus its replacement should be part of the loss settlement in the repair process. The only time this would not be the case is when the wear and tear exclusion is preceded by the anticoncurrent language.

Anticoncurrent Causation

The anticoncurrent causation language reads as follows: "We do not insure for loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss." If the wear and tear exclusion is after this language, then regardless of whether or not there was damage to the roof itself that resulted in the insured discovering that the decking or underlayment was worn and damaged, there would be no coverage for that worn decking.

The anticoncurrent causation language was developed in order to ensure that certain perils were excluded, regardless of what else happened at the same time. The perils that frequently follow such language include earth movement, water, nuclear hazard, war, intentional loss and other perils that insurers do not wish to provide coverage for.

When the wear and tear language is not preceded by the anticoncurrent causation language, an argument can be made that since the damage to the roof is covered, that the decking, which needs to be replaced in order to make repairs to the roof, should be replaced as well.

Case studies

Question Can you weigh in on the coverage for the repairs to the deteriorated roof deck? Roof repairs were covered due to the sustained hail damage. After the tear off, sections of the roof deck were replaced because the existing substrate was compromised. The insurance company refused to pay for the roof deck repairs because it was damaged by wear/tear.

Answer Hail is the covered cause of loss that led to the wear and tear being discovered when the damaged roof was removed for repair. In your policy, the wear and tear language is preceded by the anticoncurrent causation language, which excludes such losses even if a covered cause of loss contributes to the excluded damage. There is an exception to the wear and tear exclusion if the damage is caused by water or steam not otherwise excluded. Unless the damage to the underlayment was caused by water or steam, the anticoncurrent causation clause will preclude coverage for the underlayment, even though the underlayment must be fixed before the roof can be repaired.

This question highlights the importance of where in the policy the exclusion for wear and tear appears. In this situation, the exclusion for wear and tear appears after the anticoncurrent causation language. Therefore, even though the damage to the roof was from a covered cause of loss, the worn decking is excluded because of the anticoncurrent causation language that precedes the exclusion for wear and tear.

Question Nationwide has allotted a new roof. However, the new roofing system will not sustain the fasteners required to secure the roof membrane and insulation to the deck. See below the engineer's conclusions. The full engineer report is attached.

Conclusions

Based on our inspection and the information discussed above, we have reached the following conclusions:

1. The steel decking was very corroded; the decking, including the base steel, had been thinned by progressive, long-term corrosion. The corrosion occurred progressively over the long service life of the metal and was advanced before installation of the existing PVC overlay membranes.

2. The steel decking would not be suitable for application of new roofing. The metal would not provide sufficient anchorage for new mechanical fasteners in many places and might not be a safe working surface during re-roofing procedures.

The carrier extended coverage for the full replacement of the fully adhered PVC membrane and insulation board that is attached to the deck via fasteners. However, the new roof covering will need a suitable surface for the fasteners to be able to secure the insulation board. Currently that is not possible with the deteriorated condition of the metal decking. This is similar to a residential style roof where they must have nailable surface to attach shingles. Without the suitable metal surface to attach the new roof system, the insured will never be made whole with the repairs allotted by the carrier adjuster. The PVC membrane, insulation and metal deck are all integral parts that make up the roof system of the building.

Below is a photo showing the many fasteners required to attach the insulation board to the metal decking. After the insulation has been installed over the decking, the membrane roof is attached over the insulation board using adhesive.

Answer

While in most cases, if the underlying roofing material needs to be replaced to complete the roof repairs, it would be part of the loss settlement of the claim. However, in this loss situation, there was known and visible prior corrosion of the decking prior to the hail damage. This is just one excerpt of the engineer's report that confirms this: "…At some point, the roofing was coated with asphalt sealant, presumably to address progressive corrosion and/or leakage. At a later date, the roofing was converted to decking by applying a layer of insulation and single-ply, PVC roofing. Numerous large holes were covered with sheet metal prior to application of the single-ply roofing system, evidence that the deterioration was well progressed prior to the single-ply roofing application…. " Because of the portions of the decking that were noted as being visible from the underside/interior of the roof with noted corrosion, and the prior attempts to cover over the progressive corrosion, we are in agreement with the carrier's position on this claim.

In this case the insured was aware of the deterioration of the roof and had failed to make adequate repairs. Seeing as the roof was in poor condition before the covered cause of loss, all that is required of the insurer in this instance is to provide coverage for what was damaged by the covered peril.

Question

Insured has a Business Owners – BOP Basic Plus policy. The roof sustained wind damage. When the shingles were removed, it was discovered that there was 3-4 inch spacing between the sheathing on the roof deck. Shingles could not be installed without covering the sheathing with plywood to provide a solid substrate. Would the costs of installing the plywood be covered as the shingles could not be installed on the roof without it? The policy is ACV only and does not have Building Code/Law Coverage on the declarations supplement BU0403 1207. This would have not been an issue if the roof did not sustain wind damage.

Answer

If the plywood has to be added before the roof can be replaced, then it is part of the repair process of the wind damage claim. It would not be excluded, as it is part of the repair process of the wind damage claim and the insured would otherwise have no visible signs or knowledge of the spacing being an issue.

This example clearly shows that but for the loss to the roof, the insured would not be making a claim for plywood to cover the sheathing. It's only because of the covered cause of loss that this is an issue. In situations where a claim would not be filed but for damage from a covered cause of loss that exposes another issue hidden from view, that the hidden damage should be considered part of the loss, and not a separate claim for wear and tear.

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