Insurance company law firm Matthiessen, Wickert & Lehrer have updated a thorough discussion of the adjustment issue of matching in an article, ”Matching Regulations” And Laws Affecting Homeowners’ Property Claims In All 50 States. From their view, they noted the current state of affairs regarding matching:

It remains one of the most difficult issues to deal with in the world of property insurance. Homeowners’ insurance policies usually contain a provision obligating the carrier to repair or replace an insured’s damaged property with ‘material of like kind and quality’ or with ‘similar material.’ They cover property damage resulting from ‘sudden and accidental’ losses. When damage caused by fire, smoke, water, hail, or other causes results in a small portion of a home or building being damaged (e.g., shingles, siding, carpet, cabinets, etc.), whether and when a carrier must replace non-damaged portions of a building in order for there to be a perfect match remains a point of contention. It is a matter of great importance to insurance companies because ‘matching’ problems with a slightly damaged section of roof or flooring can lead to a domino effect of tear out and replacement costs of many items which are not damaged. The problem of partial replacement is especially troubling where the damaged siding or shingles have been discontinued, making it virtually impossible to properly match. To replace only the damaged portion would result in an obvious aesthetic deficit due to a clear difference in the appearance of the replaced portion of the building from the portion that remains undamaged.

Would the entire structure need to be re-sided or the entire roof re-shingled? Or is it sufficient to replace just one wall of siding or just a few shingles? Whether or not the insurance company must pay to replace entire sections of the structure in order to bring the property back to its previous uniformity and aesthetics can bring various state insurance laws and regulations into play. On the one hand, many pundits claim that the terms of the insurance policy require the carrier to pay the cost to ‘repair or replace with similar construction for the same use on the premises.’ They argue that ‘similar’ doesn’t mean matching exactly. Others argue that coverage for ‘matching’ and ‘uniformity’ under a homeowner’s policy doesn’t exist without a specific endorsement. The truth lies somewhere in between and can vary greatly from state to state.

In the Merlin Law Group Condominium Law Blog, I noted a recent case denying the costs of matching in, Associations Which Require Uniform Appearance Should Not Be Sold Policies With Anti-Matching Language. There, a policy was sold to a townhome owners association with an endorsement that excluded matching:

9. Undamaged material. We will not pay to repair or replace undamaged material due to mismatch between undamaged material and new material used to repair or replace damaged material. We do not cover the loss in value to any property due to mismatch between undamaged material and new material used to repair or replace damaged material.

Why an insurance agent would ever sell an insurance policy to an association with anti-matching language is beyond me. I find it ironic that Wikipedia lists both “insurance” and “appearance standards” as benefits for owners in associations. The uniform appearance standards often found in association regulations simply make it negligent for agents to sell anti-matching policies to associations who are supposed to purchase insurance that meets the requirements of the association. Agents should read the by-laws for all associations as a matter of necessary action before selling any association policy to ensure that the people relying upon the agent are purchasing what is required.

The National Association of Insurance Commissioners lists the flowing as an unfair claims practice in its model act:

When a covered loss for real property requires the replacement of or items and the replacement items do not match in quality, color or size, the insurer shall replace items in the area so as to conform to a reasonably uniform appearance. This applies to interior and exterior losses. The insured shall not bear any cost over the applicable deductible, if any.

Insurance regulators have noted that not matching is a coverage gap problem to such a degree they have deemed it an unfair claims practice when it happens. Having recognized this as an unfair claim practice, they should not then allow insurers to include language excluding matching. Alternatively, they should severely prevent the selling of such insurance products without mortgagee approval and significant warnings given to the policyholder of the potential negative impact of such language.

Thought For The Day

I like things matching. I have an upright bass, a drum kit and a grand piano that’s the same color. I tend to overthink things.
—Penn Jillette

  • I lost a third of the shutters on my house in 2013 due to a tornado. They were custom shutters and replacements couldn’t match. I invoked this clause in my HO policy:

    Loss To A Pair Or Set
    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.

    In addition, the carrier had a broadening endorsement with replacement cost, rather than, ACV. I got 18 new shutters.

    The adjuster said no one had ever invoked that clause for shutters. I told him I had recommended that it be cited for all kinds of “set” claims, including shingles and siding.

  • Charles Miller

    I just read your blog on matching and this occurs to me. Would it be possible to advance an argument that the insurer cannot interpret or change the policy to take away coverage for matching because it would be unconscionable? The insurance industry has long paid for matching (as it has for cosmetic damage). Because of this they may be estopped from their new interpretation on matching or cosmetic damage, but maybe more importantly it is unconscionable for the insurer to change an age old policy upon which insureds have been relying for decades to provide certain types of coverage.

    Of course, if the insurer changes the policy and reduces coverage without notice to the insured commonly the changed coverage is not enforceable. But my suggestion goes beyond that–that is the insurer is acting unconscionably because it is acting contrary to the reasonable expectations of the insured based on decades of coverage for the exact damage that the insurer is now trying to take away.

    Of course, this does not even get to the issue of whether the insurer reduced the premium when it took away matching. Also, in some states, such as California, a form of matching is required. In those states such regulations may also be used to show that the insurers actions are unconscionable.

    I am thinking about this because I just read an interesting opinion out of Pennsylvania where a State Farm policy provision was overturned based on unconscionability. Of course, there are possibly some unique facts in that decision but the opinion does discuss the underpinning of this concept.

    In any case, and as always, I look forward to your thoughts.

    Best regards

  • In NJ, there are 3 carriers who exclude matching, by way of policy language in their standard HO-3 policy. NJM, Cumberland, and now the Farmers Mutual Groups.

    What is odd, is not that they have this language in their policies, however that the NJDOBI allowed this to occur.

    • Chip Merlin


      Great to hear from you.

      You, Les Knox, Jesse Sipe and other leaders of the PPAANJ are also to be congratulated for raising this issue with the NJ DOI. I was part of a meeting where we raised this issue of insurance gaps being caused by this very manner with the NJ DOI. Hopefully, through your efforts with the PPAANJ and others we can prevent this type of language from causing future hardship.

      On another topic, congratulations to your son and family on his recent Division I football scholarship! That is quite an achievement, and I am certain you are a very proud father.