If you have questions on insurance coverage, I have answers. A public Comment and a few private questions to yesterday’s post, Matching of Property Damage is Statutory in Florida, were enough cause to provide some general case examples and one significant suggestion.

Remember, every jurisdiction is different. Case law and regulations need to be checked. Read the policy to see if it has restrictions on matching because we are seeing more policies that exclude payment for costs associated with matching damaged portions of real or personal property. Coverage may be provided for "pairs" or "sets." Again, the policy is the first place to start any analysis of coverage.

The Suggestion:

Get as much proof from experts indicating that to fix the "damaged" property and not be worse off than before, you have to match the property. And, you must show that it is impossible to somehow "patch" the damaged area so it will match. Get experts to back you on the claim and many insurance adjusters will pay.

Two Good Case Examples

In Holloway v. Liberty Mut. Fire Ins. Co., 290 So. 2d 791, 793-794 (La.App. 1 Cir. 1974), the discussion helps show what type of proof is needed: 

Kenneth McKay, plaintiffs’ interior decorator, was qualified as an expert in the field of interior design. He testified that, since the color and pattern of the carpeting originally used in plaintiffs’ house had been discontinued, it was impossible to replace the damaged carpeting without replacing all of the carpeting in the bedroom wing of the house. Even if the same color and texture of carpeting could be obtained, to replace only the damaged portions of the carpet, would result in unsightly seams at the juncture point, according to Mr. McKay, and contrast between the old and the new carpeting would be readily apparent and would have an adverse effect on the overall market value of the house. Mr. McKay likened the replacement of the damaged carpet to the effect of replacing a sleeve in a suit with other than the same material with which the whole suit had been tailored originally. He also testified that it was the general practice in Baton Rouge in houses of the type of plaintiffs to use one kind of carpeting and one color in all of the bedrooms, and that to do otherwise would depreciate the value of the house. Mr. McKay testified further that he had been consulted by 50 – 100 homeowners in Baton Rouge who had sustained water damage to their carpeting, and that he always recommended replacement of the carpet in the entire bedroom wing, if the damage had been in any part of that area.

W. W. Wilkinson, a qualified realtor, also testified that if carpeting of the same texture and color is not used in the entire bedroom wing of houses such as the Holloways’ house, it diminishes the value of the house by $1,000 to $2,000.

In the light of the testimony of the expert witnesses in this case we find no error in the judgment of the trial judge in awarding plaintiffs the cost of the replacement of the carpeting in the entire bedroom wing of their house." (emphasis added)

An Ohio case stands for the proposition that an insurer must not only match, but pay for undamaged covered property if it is necessarily damaged as a result of fixing the damage initially caused by an insured peril. In Mastin v. Sandy & Beaver Ins. Co., 10 Ohio Misc. 2d 22, 23 (Ohio County Ct. 1983) the court noted and found:

The floor was damaged when a hole was cut in it to gain access to the plumbing system in the house. Evidently, there is no basement or crawl space otherwise accessible. It was uncontroverted that plaintiff’s home was in fact damaged by the storm and that it was truly necessary to go through the kitchen floor to repair the damage. Defendants, however, wish only to pay for the floor to be patched, and not replaced. The floor is of vinyl covering such as is purchased in a roll. It is not tile.

Plaintiff’s insurance agreement states defendant company is obliged to repair or replace damaged property. The court finds that vinyl flooring cannot be said to be repaired if an obvious patch is left, and that the whole floor ought to have been replaced.

One Case to Learn From

A case which could be read for an insured being "unreasonable" without sufficient proof is St. Paul Fire & Marine Ins. Co. v. Darlak Motor Inns, Inc., 3:97-CV-1559-TIV, 1999 U.S. Dist. LEXIS 23283 (M.D. Pa. Mar. 9, 1999). The assertion by the policyholder was set out by the Court:

Darlak asserts that St. Paul must pay for redecorating the non-damaged rooms because it was necessary to replace the wallpaper and carpet in all of the rooms in order to maintain the continuous decor of the third floor of the hotel… "The rooms that did not suffer physical damage as a result of the fire are also considered damaged property under the policy since the undamaged rooms must look the same as the rest of the rooms on the floor." …Darlak further contends that "failing to match constitutes successive damage and fails to place the insured in a pre-loss condition."

This situation is quite common in hotels and motels where there are requirements that the rooms have to match. In those situations, it is important to get the franchise inspector to testify about why this is an important aspect of hotel and motel management and leads to a devalued property. Many commercial insurers will pay for this. Obviously, St. Paul does not pay for matching.

The finding was based on a lack of evidence and better proof offered by St. Paul:

Here, Darlak has not provided any proof of loss to the undamaged rooms n7 other than the general assertion that it "would be in worse position subsequent to the loss if the premises looked different in one place than in the other." However, Darlak offers no evidence that it cannot match the damaged rooms to that of the undamaged rooms. Darlak’s contention that a failure to redecorate the entire third floor would amount to the creation of an ‘eyesore" ignores common sense. Logic dictates that the damaged rooms can be decorated to match the undamaged rooms.

n7 St. Paul persuasively notes that because of sophisticated paint matching’ techniques and the widespread availability of carpeting, wallpaper and drapes, Darlak should be able to match the decor of the damaged and undamaged rooms.

We are currently representing a number of hotels and motels with similar issues. You can bet we will provide proof to back up our clients’ claims, and I suggest you do the same. Sometimes, there are matching techniques which make the issue moot. However, some insurers will not pay the additional costs of those repair techniques since they claim they do not pay for matching or the "additional" cost of matching.

And, some wonder why we have to file lawsuits over insurance claims.