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.

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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;

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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.

1. 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.
2. 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.
3. 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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