Yesterday’s post, Physical Damage is Needed to Collect for Loss of Warranty, may lead some to think that property insurance policies require “structural” or a “functional” destruction before coverage is not afforded. This simply is not true. Alterations to the physical appearance of a structure or personal property are covered so long as the cause is a covered peril.

Indeed, this issue does not get raised just by insurance adjusters. My experience is that when insurance defense counsel hire engineers, the engineering report repeatedly notes the lack of “structural” damage to a building. A noted example of this is with roof claims. HAAG engineers often repeat in their reports and at seminars that there is no structural or functional damage to shingles or parts of the roof. The result is insurance company attorneys saying that they are not paying for anything unless there is proof of “structural damage.”

I am going to provide just one example to show how absurd this position is. The FC&S Bulletins discuss the issue and use the same example of vandalism that I usually provide. Interestingly, the question posed involved a roof with cosmetic damage, and I bet the insurance company had a roofing expert say there was no functional or structural damage to the roof:

Direct Physical Loss and Cosmetic Loss

Hail stones have created dents to a copper roof. The section of roofing is located over a second story bay window. It does not appear that the hail has compromised the life span of the roof’s surface or otherwise affected or decreased its useful lifespan.

Our HO policy provides coverage for direct physical loss. If the roof’s integrity was not compromised by the hail stone impact, has a physical loss occurred?

We believe that some carriers view this type of damage as cosmetic and do not provide coverage for replacement of the copper roof. Does FC & S have an opinion?


Whether or not the dents are cosmetic or affect the roof structure, they are still direct physical loss. The policy doesn’t define damage so standard practice is to go to a desk reference. Merriam Webster Online defines damage as loss or harm resulting from injury to property, person, or reputation. The roof now has dents where it didn’t before; that’s direct damage. The policy doesn’t exclude cosmetic damage, so direct damage, even if it is cosmetic, is covered. It’s the same as if vandals had painted the side of the house purple. While cosmetic, it’s damage, and is covered. The principle of indemnity is to restore the insured to what they had before the loss, and this insured had a roof with no dents.

I am raising this issue in part because there are so many Hurricane Ike disputes where the insurers are not paying for roof damage. One of the arguments is that they do not pay for “cosmetic damage” which is wrong. The vandalism example made by the editors of the FC&S Bulletin clearly shows that the property policy covers for damages to the appearance of structure or property so long as it is by a covered peril.

  • Luis Arencibia

    What about matching of the roof tiles or shingles?

    The new ones are always going to be different. But, the insurance companies are not paying for the entire roof.

    In this case the purpose of insurance of “to put the insured in the same position they were before the loss” is not true as long as the insurance companies continue to pay part of the roof.

    Your opinion, please.

    Thank you

  • Greg Roth

    Not to mention the fact that the whole point of the policy is to indemnify the insured for their loss.

    If the roof is left in a disfigured cosmetic condition, this will cause a loss of value to the property, thereby compromising the insured’s financial position. A prospective buyer will most certainly want to pay less then market if they are faced with the prospect that they will have to replace the roof to make the property aesthetically pleasing.

    The principle of indemnity to to return the insured to the same financial position they were in before the loss occurred.

    This goes for mismatched roof tiles or shingles as well. Exactly the same concept. I’ve always been at a loss to understand why insurers routinely pay to match floor tile, but make a distinction when it comes to roof tile.

  • If the argument is that aesthetics is part of the function of the item then it would be just as true for composition shingle roofs as for the copper roof panel example. The base color of shingles is always the same, black asphalt, the color comes from the granules; therefore granule loss is equal to color loss.

    If color loss is equal to aesthetic loss then granule loss and the resulting color loss is a loss of function.

    Or, am I reading this all wrong?

  • shirley heflin

    Sounds right to me, Dr. Phelps. So much of it depends on who the carrier is as to who is going to have the “matching roof” on the block…sad but true (i.e., reality anyway).

    Finally, I believe Messrs. Arencibia & Roth correctly point out that providing an insured with the SAME ROOF that existed pre-loss is the insurance company’s duty in making its insured “whole” post-loss. They’re not asking for a Picasso – just something as close as possible to what they had pre-loss.


  • Greg and Matt,

    Read my September 15 Post. I think prior posts answer your questions.

    Thanks for asking and sharing.

  • jeff

    While this may be true in some instances, it is not true in others. It depends on the statute that is in effect.

    This statute specifically refers to only “structural damage” resulting in a “loss”, not mere physical damage. If there is no structural damage, a sinkhole loss did not occur, and coverage would not apply, unless the specific policy provides coverage for physical damage.

  • Israel Trevino

    Recently, I read your article on Cosmetic Damage. You stated that cosmetic damage is a “Direct Physical Loss” and is covered by the property insurance policy. In my case, the Texas Windstorm Insurance Association Policy. Most often, the insurance adjuster will draw a 10′ x 10′ square to see how many hail marks or hits are visible within the square. When hail damage occurs on a composition roof, is it mandatory that hail marks be visible and can be counted within the square or can a composition roof be considered cosmetically damaged without the hail marks?

  • Rose

    It may be true that the insurance company has to pay for the damage done but if the policy is ACV they only have to for the value lost or the cost to repair what was damaged less depreciation.

    Cosmetic damage is defined as superficial damage and does not effect the roof from doing what it is intended on doing and that is creating a barrier from the elements. If a person is choosing to put a steel roof on a home and lives in an area that is potential to storms they may want to think twice about doing steel if they think they are going to get paid for every dent or scratch that happens to it because it will and they will be looking for a new insurance company.

    Branches rubbing on the roof will also cause cosmetic damage and wind blows branches and wind is a covered peril so do they get a new roof. Won’t happen.

    More and more companies are now adding the cosmetic damage endorsement and are doing higher wind deductibles due to likelihood of damage and especially with the metal roofs. Can’t live with a dent to put steel on because insurance has changed due to the cosmetic claims that have happened in the last 5 years

  • Damage is damage.

  • Maria Lamego

    I tried to open the link for The FC&S Bulletins but it seems to be a broken link. Can anyone send those to me? I would love to read them. Great post

    Thank you


  • Jim Moore

    I need to read the “No Match Law” for Illinois. Where would I go to find it so I can read what it says. I have an insurance adjuster that is saying that he doesn’t have to replace the upper kitchen cabinets because they didn’t get damaged in a flood. The bottom cabinets are water damaged. The cabinets are no longer made, so he’s going to pay for the ones damaged and not the upper cabinets, because of the “No Match Law”. What’s the ruling on that? Some how that really doesn’t seem fair.

  • Dan Hayes

    This is in response to Jim Moore’s post.
    I’m a public adjuster here in Illinois, and unfortunately we are a “No Match State”. However we do maintain a right to argue “Line of sight”.
    Simply put, anything that has a clear visual association to the damaged area, you should be able to appeal for and have compensated.
    Secondly get several estimates that include total replacement of all the cabinets, and repeatedly present them as “your estimate” on replacement from the loss. The Insurance carrier will have to accept an estimate and settle eventually and its better to be ready and insist on the one that you want from the beginning. They can’t force you to go with an estimate from a company of their choosing and especially not a settlement of their choosing. You are the insured, you paid your premium. The Insurance carrier accepted your premium, thus they owe you.

  • Patrick Faurot

    I live in Texas and my roof received hail damage in April. The insurance company declined due to the “cosmetic damage waiver.” This waiver did not appear on the policy but was sent several months later. The roof leaked and damaged three bedrooms on the second floor. What can I do to make the insurance company honor my claim.

  • Kurt Samson

    I have a similar situation as the copper roof example. The roof in question is a metal building in Pueblo, CO; and consists of a “Pro-Panel” (exposed fastener system similar to corrugated) on the front (smaller) section, and a Mechanically Seamed Standing Seam Roof System (no exposed fasteners and no way to separate without damaging) on the rear (larger) section. The insurance company is paying to replace the fiberglass “skylight” panels on the standing seam roof (due to serious hail damage punching holes straight through and creating leaks that will damage the sprayed on insulation under the panels on the interior) as well as an elastomeric roof coating on the balance of the roof structure. Basically a repair. Their contention is that the damage is cosmetic. The damage to the roof is obvious and widespread. My solution is to install a retrofit TPO roof system by Firestone Building products, in which the metal roof panels are covered with OSB Sheeting and becomes the roof decking. Once the decking is in place we will install a TPO roof system using the OSB as the decking. This solution would actually save the insurance a lot of money compared to replacing the existing panels and insulation with an equivalent product. I want to have some “ammo” when I next speak to the adjuster, and telling them their plan is not Legal is as good of an “ammo” as any. Have there been any changes to this law since the original post? Am I correct in my understanding that they are responsible to pay for the replacement of the roof by Colorado Law? Thank you for your help.
    Kurt Samson
    Estimator/Project Manager
    Central States Roofing Company

  • Kurt Samson

    I have a similar situation as the original posting. The adjuster is claiming cosmetic damage on a metal roof system. The existing roof is a combination of Pro-Panel and Standing Seam Mechanically Seamed (Pro-Panel on the addition at the front of the building, and Standing Seam on the rest). I just want to make sure that I am reading the above posts correctly and that no new laws have changed anything. So the damage that is referred to as “Cosmetic” is in fact classified as physical damage and is therefor covered under the insurance policy for full replacement.

  • Stephanie

    I live in eastern Washington, my roof sustained damages to the south side and on the ridge during the recent wind storm. My insurance company is willing to replace this part only. Someone told me to ask about the No Match rule..I am curious is this governed by insurance policy or by state regulation? Are there other such regulations and policy I should be aware of?

    Thank you,