Given weather trends, increased building costs, and repair costs, one area that insurance companies can ultimately lower insurance costs is by not paying to replace the undamaged portion of a home. Many times, these storms are wind-driven and will typically not damage all sides of your home. The insurance companies will respond in one of 3 ways:
- Limit the coverage to the damaged portion only. Roofing and Siding manufacturers rarely have the exact match. (I’m not sure if this is on purpose for reasons of selling more product or some other reason.) Most often, a good contractor will work to find a very close and acceptable match. Others will help restore the faded siding with a good cleaning, to help restore the color to better match the color of the replaced exposures of your home.
- Limit the coverage to the damaged portions of the roof or siding, unless the homeowner purchases an optional endorsement to extend the coverage for the undamaged portions. As you might imagine, the insurance companies will have limitations. Some will limit the coverage to $5,000 with no option to purchase more coverage, while others will offer limits up to $40,000. Note that some companies do not offer the coverage at all, nor do they have an option to purchase the coverage.
- Work with the insured to match without a required endorsement. You are probably thinking, “Get me this company.” Unfortunately, it is not that simple. As you know, MANY factors go into your best insurance program, and this is only one consideration of many.
If you are uncertain about the way your policy reads or have a question about these coverage limitations, please contact us. We want to make sure our customers are educated and equipped with the latest industry knowledge, so there are no surprises during the claim process.
The History & Precedence of MN Matching Law
Many of us understand that the law can sometimes be ambiguous in its language/intent. This leaves room for interpretation by judges and lawyers in court. It is important to recognize how statutory law and case law both play a factor in affecting the rulings of these cases, and how they set the precedence for trends down the road.
Under the claim’s settlement section of Minnesota statutory law (a law that is passed and formally written), it is stated that replacement of a damaged item must be done with one of “like kind and quality” 72A.201 subd.5. However, this statutory law says nothing regarding the repair or replacement of any undamaged item/property. This leaves a lot of room for interpretation in the courts, especially when bumping up against a policy with a specific matching exclusion.
In the event, your roof is damaged, and the materials used to replace it do not match to your liking, there is nothing explicitly stating that the undamaged materials must also be replaced to match. In the past, many insurance companies have paid these claims regardless and have replaced the undamaged siding/roofing to avoid court. With the precedence set by recent court rulings in 2019, case law (law based on prior rulings of similar cases) has shifted in favor of insurance companies on this issue.
A couple of key recent court cases have ruled that matching exclusions are “unambiguous and enforceable” under MN law. So, insurance companies that have this language in their policy, will not be responsible for paying to replace/match undamaged materials.
This is a huge motivation for any companies that have this exclusionary language in their policy but have not been enforcing it, to begin doing so. As a result of these recent cases, we are beginning to see a trend of carriers denying these claims and fighting them tooth and nail to avoid paying for anything that they aren’t legally obligated to pay.
If you are uncertain about the way your policy reads or have questions about this exclusion, please give us a call. We want to make sure all our customers are educated and equipped with the latest industry knowledge so there are no surprises during the claim process.