https://sites.google.com/site/metropolitanforensics/loss-of-integrity-or-functionality-v-cosmetic-damage
Many insureds have been complaining because the insurance carrier will not cover a certain hail or wind damage on the basis that it was cosmetic in nature. Because this is a recurring issue, this blog provides a very brief explanation of the cosmetic and the functional damage to building components.
Figure 1: Hail damaged dwelling
What standard applies?The standard the carrier is permitted to apply is based on the terms of the contractual agreement between the parties, i.e.,the insurance policy. If the policyholder paid a premium for direct physical loss to his or her structure, then cosmetic damage is covered and the carrier must meet its obligation to indemnify the insured and restore the property to its pre-loss condition.
What has Changed?
Property and casualty insurance companies, especially smaller regional companies that insure homes in areas prone to storms, have been hit hard by storm losses over the past decade. As an alternative to raising premiums on everyone, the American Association of Insurance Services (AAIS), an organization that develops policy forms used by more than 700 property and casualty insurance companies, recently created a "Cosmetic Damage Exclusion" for home insurance policies. To compensate for the lack of coverage for cosmetic storm damage, insurance companies give a credit to reduce the premium on the hail and wind damage portion of the policy.
What is Cosmetic and what is Functional Damage?
The big problem for insureds is determining what constitutes cosmetic damage. Cosmetic Damage is damage which doesn’t meet the definition of “functional” and therefore is considered “cosmetic.” Cosmetic damages may include discoloration or damage which doesn’t affect the lifespan of the roofing material or reduce its ability to shed water. Cosmetic damage is that which only affects the appearance of a material, or affects its functionality to only a minor degree. On the other hand, functional damageis damage which diminishes the ability of a roof to shed water and/or reduces the roof’s or other building component’s expected long-term service life.
As a focused illustration, functional hail damage occurs when the shingle mat is bruised or fractured. Cosmetic impact marks occur when the granular surface of the exposed shingle tab is “scuffed”, leaving the underlying asphalt and mat physically undamaged. Granule loss is not considered functional damage. In general terms, functional impact damage becomes more prevalent when hail size begins to approach 1-inch or more in diameter.
Photo 2: Comparison between hail damages
Metropolitan Engineering, Consulting & Forensics (MECF)
Providing Competent, Expert and Objective Investigative Engineering and Consulting Services
We know you need to process damage claims quickly and knowing the facts is now faster than ever – within 24 hours of site visit. Our Pegasos Forensic Investigation Services (PFIS) feature:
· Expert Forensic Investigators on-site
· Readable, Conclusive Reports
· Fixed-Prices starting at $499 per chimney or roof inspection (volume discounts are also available)
· 10-State Coverage Area
P.O. Box 520
Tenafly, NJ 07670-0520
Tel.: (973) 897-8162
Fax: (973) 810-0440
E-mail: metroforensics@gmail.com
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