When Applying the Limitation for Wind-Driven Rain, What Constitutes a "Roof"?
December 2001
In this article, Doug Berry summarizes the
insurance law cases addressing the question of what is and is not a roof under
property insurance policies.
by Doug
Berry
Butler Pappas
Increasingly, insurers are being asked to pay for water damage to the interior
of buildings following major storms. This damage is often to carpets, wallpaper,
drywall, and occasionally electrical and heating, ventilating, and air conditioning
(HVAC) systems. In adjusting claims that include a component for such damage,
insurers typically refer to policy limitations such as the following.
C. LIMITATIONS
The following limitations apply to all policy forms and endorsements,
unless otherwise stated.
We will not pay for loss of or damage to property, as described and limited
in this section. In addition, we will not pay for any loss that is a consequence
of loss or damage as described and limited in this section.
* * *
c. The interior of any building or structure, or to personal property
in the building or structure, caused by or resulting from rain, snow,
sleet, ice, sand or dust, whether driven by wind or not, unless:
1) The building or structure first sustains damage by a Covered
Cause of Loss to its roof or walls through which the rain, snow,
sleet, ice, sand or dust enters;
* * *
Source: ISO Form CP 10 30 06
95 (1994)
This article will address the question "what constitutes a "roof" for purposes
of this limitation.
Are These Provisions Ambiguous?
Provisions such as these are generally found not to be ambiguous. See Camden
Fire Insurance Association v New Buena Vista Hotel Co., 24 S2d 848 (Miss 1946),
and will therefore be applied. When its application is considered, there are
three points that must be borne in mind.
- It must be determined whether there was damage (an opening) to the roof
or walls through which the rain entered which was caused by a covered cause
of loss.
- Inherent in the first question is the question of whether any opening
identified was of sufficient size to permit entry of enough water to cause
the damage claimed.
- It may be necessary to determine what constitutes a "roof" or "wall"
for purposes of this limitation.
Ultimately, the first and second issues, and sometimes the third, will be
issues of fact, not law. The policy does not define the terms "roof" or "walls,"
so it is necessary to look to definitions provided by the courts or other sources
when reviewing this provision.
What Is a Roof?
Although at first glance, the inquiry appears simple, the determination of
what constitutes a "roof" is complicated in some circumstances. The situation
that commonly prompts this inquiry arises when structures are undergoing repairs
or renovations, or during the construction of a new structure. In these situations,
the building is commonly covered by a tarp or some other type of temporary covering
during the construction or renovation process. The tarp or other covering is
blown off by the wind or is insufficient to prevent rain from entering the interior
of the structure and interior rain damage results.
Several courts have directly addressed this issue and found that a temporary
roof covering during construction is not considered a "roof" under the meaning
of the policy. In Diep v California Fair Plan Association, 19 Cal Rptr 2d 591 (Cal App 1993), the insured contracted to have his roof repaired.
The workmen removed part of the roof and covered the opening with plastic sheeting.
During a rainstorm, the plastic sheeting blew open, and rain entered the interior,
causing damage to the insured's personal property.
The insured sued the insurer, seeking coverage for the loss. The insurer
moved for summary judgment based on the policy limitation excluding interior
rain damage from coverage unless the roof or walls sustained "actual damage"
caused by wind or hail. The court held that there was no coverage available
to the insured because the opening to the interior of the building was not caused
by wind or hail but rather by the workmen.
The court further summarized the many different meanings of the term "roof
" and stated a "roof is commonly considered to be a permanent part of the structure
it covers." The court further stated that the term "roof" was not vague or ambiguous
and could not reasonably be construed by the parties to include a temporary
cover of plastic sheeting.
The Diep court relied on the holdings in Camden Fire Insurance Association v New Buena Vista
Hotel Co., 24 S2d 848 (Miss 1949), and New Hampshire
Ins. Co. v Carter, 359 S2d 52 (Fla 3d DCA 1978). The Camden court held
that the felt and tarpaper placed over the structure did not constitute a roof
as contemplated by the policy, which stated as follows.
In order to be, or become, a roof, its construction or reconstruction
must have reached the point where a reasonably prudent householder would
consider it, if left in that condition for a month or months, or longer,
as adequate against all risks of wind and rain which could be reasonably
anticipated as likely to happen according to the general and recurrent experiences
of the past, but not including any extraordinary or unprecedented eventuality.
The Carter court relied on Camden's reasoning in deciding that the claimed
loss for interior rain damage was not covered under the policy but did not specifically
analyze whether the temporary covering in that case constituted a "roof." The Camden and Carter cases are discussed in greater detail below.
Further, in Charter Oak Fire Insurance Company v
Carteret County Board of Commissioners, No. 95-28581996 U.S. App. LEXIS 17122 (4th Cir July 12, 1996) (per curiam),
the court, relying on the holdings in Diep, Carter, and Camden, held that plywood sheeting and roofing
felt covering the structure did not constitute a permanent roof as contemplated
by the policy. Therefore, no coverage was afforded under the policy.
What Constitutes Damage to a Roof?
In Carter, supra, the insureds were repairing the roof on their residence. As part of the repair
process, the shingles were removed from the roof. The wooden deck of the roof
was partially covered with tarpaper when a rainstorm occurred. During the storm,
water leaked under the tarpaper and damaged the interior of the residence and
its contents.
The insureds made a claim under their homeowners policy for coverage for
the damage. New Hampshire refused to pay for the damages to the personal property,
relying on the following policy limitation excluding loss:
caused by rain, snow, sand or dust, ... unless the building containing
the property covered shall first sustain actual damage to roof or walls
by the direct force of the wind or hail....
The court reversed the partial summary judgment granted in favor of the insureds
and remanded with directions to grant summary judgment in favor of New Hampshire
based on the limitation. The court held that since the insureds did not allege
that the dwelling sustained any "actual damage" to its roof or walls by the
direct action of the wind and that the rain leaked through the roof solely because
the insureds had removed the protective covering of the shingles, there would
be no coverage under the policy.
In reaching its holding, the Carter court
relied on the reasoning in Camden Fire Insurance Association,
supra. In Camden, the insureds operated a hotel that was undergoing roof
repairs. During the repairs, the workmen made a hole in the roof. A storm occurred,
and rainwater leaked through the hole, causing damage to the interior of the
hotel and its contents.
The insureds made a claim under their property policy, and the insurer denied
coverage based on the same limitation referred to in the Carter case. The insurer's position was that
the hole in the roof was not made by wind, therefore, the limitation applied.
The court reversed the finding of coverage in favor of the insureds made by
the lower court because the hole in the roof was clearly made by the workmen,
not the wind, and the policy unambiguously provided that the roof first must
maintain "actual damage" caused by wind before coverage was available.
Two Courts Find Coverage
However, at least two courts have rejected the contention that a temporary
plastic cover is not a roof for purposes of recovery under the policy for interior
rain damage caused when the plastic covering blew off of the structure. For
example, in Victory Peach Group, Inc., v Greater New
York Mutual Insurance Company, 707 A2d 1383 (NJ Super 1998), the roof of the insured building was being repaired,
and the workmen covered the roof with tarps at the end of the workday. During
the night, a storm occurred which ripped the tarps off the roof and allowed
rain to enter the interior of the building, causing damage to the insured's
personal property.
The insured sought coverage for the loss. The insurer filed a declaratory
judgment action seeking a determination of coverage. The insurer relied on the
limitation excluding damage to the interior of the building by rain unless the
building sustained damage by a covered cause of loss to its roof or walls. The
court found that the entry of the rain through the unfinished repairs was a
"risk of direct physical loss" and therefore was a covered cause of loss to
which the policy applied. The court also stated that it did not accept the factual
premise that the repairs to the roof made the roof "something other than a roof."
The Victory Peachcourt
distinguished the holdings in Diep, Carter and Camden, supra, by stating that the policy language in those cases required "actual damage"
to the roof or walls by "direct action of the wind" whereas the policy limitation
in Victory Peach only required that the roof
or walls sustain damage by a covered cause of loss. The Victory Peach court further reasoned that in
those cases, the "direct action" of the wind did not make the opening. Rather,
the opening was made by construction workers. The court stated that since the
policy only required damage by a covered cause of loss, the result was different.
The court in Sloan v Allstate Insurance Company,
977 SW2d 72 (Mo App 1998) also addressed this issue. In that case, the insured
contracted for repairs to be done to his roof. The workmen removed the tarpaper
from one section of the roof and covered it with a tarp at the end of the day.
During the night, a storm occurred, causing water damage to the insured's home
and its contents.
The insured sued Allstate for the loss. Allstate moved for a summary judgment
based on the limitation contained in the insured's policy that excluded loss
to the interior of the building or covered property inside caused by rain unless
wind or hail first damaged the roof or walls. The lower court granted Allstate's
motion for summary judgment and the insured appealed. The appellate court reversed,
stating that the statement contained in the insured's affidavit that the storm
damaged the "temporary roof" was sufficient to create a material issue of fact
to preclude summary judgment.
Recent Case Applies the Exclusion
Most recently, the Tenth Circuit Court of Appeals, applying Oklahoma law,
in Interior Shutters, Inc. v Valiant Insurance Company, 242 F3d 389; 2000 U.S. App LEXIS 36815, opinion at 2000 U.S. App LEXIS 33816,
followed the former line of cases in this relatively common fact situation,
and applied the exclusion. In this case, one-half of the roof had been removed
by a commercial roofer, and the opening covered with "a heavy, plastic visqueen
material and tarpaper, held down along the edges by new roofing materials" when
a storm loosened the plastic covering and rainwater damaged property inside
the building.
The court discussed both lines of cases and stated:
We will follow the well-reasoned authorities of Diep, Carter, and New Buena Vista and conclude that the term "roof" as used in the
policy is unambiguous, and does not include the plastic sheeting that blew
off Interior's building.
Summary judgment in favor of the insurer in the district court was affirmed.
Thus the Tenth Circuit becomes the highest court, albeit in a non-reported decision,
to find a temporary plastic covering does not constitute a "roof" for purposes
of this limitation.
Conclusion
Based on the above case law, it appears that the majority of courts have
found that a temporary "roof" does not qualify as a "roof" for purposes of the
limitation. However, at least two courts have found coverage in situations involving
temporary roofs and roof repairs, but those decisions may be distinguishable.
The reasoning in the Victory Peach case did
not turn on the issue of whether the roof was temporary or permanent. In the Sloan case, the court simply found that the issue
of whether a temporary roof is a "roof" within the meaning of the policy is
an issue of fact for the jury sufficient to withstand summary judgment. Therefore,
it is likely that in light of the majority view, a temporary roof would not
be considered a "roof" within the meaning of the policy.
The foregoing discussion relates to claims under the insured's first-party
property insurance. Importantly, the policies at issue in these cases did not
involve "builders risk" insurance which might produce a different result. Further,
the cases and discussion should not be relied on to construe the liability policies
of the roofers doing the work that led to the losses.
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