Another spectacular and unusual win for policyholders!

Seventh Circuit Holds Insured Entitled to a New Roof for Purely Cosmetic Hail Damage

by Dick Bennett

The Seventh Circuit is becoming a difficult venue for insurers. In November we reported that the Court of Appeals had held that the phrase "continuous or repeated exposure" in definition of occurrence meant that a continuous trigger theory applied, leaving the carrier exposed to a claim for 11 years of

gradual water damage that was first reported 5 years after the last insurance policy expired. Last month, in Advance Cable Co. v. Cincinnati Ins. Co., 2015 WL 3630699, 2015 U.S. App. LEXIS 9805 (7th Cir., Jun. 11, 2015), the same court held that cosmetic hail damage to a roof that had no affect on the structure's functionality or life expectancy nonetheless constituted "direct physical loss" and required the insurer to pay for a replacement.[shutterstock_88109659]Advance Cable had a building in Middleton, Wisconsin that sustained hail damage on April 3, 2011. The insurer's claim representative inspected the roof and observed no damage. Six months later, the policyholder was contemplating a sale, and the buyer had the structure looked at. Its inspector stated that there was "definitely hail damage," and the insured asked the carrier to reopen its claim. The resulting report by the insurer's representative found hail dents up to 1" in diameter but concluded that these neither "affect[ed] the performance of the [roof] panels" nor "detract[ed] from the panels' life expectancy." There was no evidence of record to the contrary. READ ARTICLE HERE