CREJ - Property Management Quarterly - April 2016
It is with certainty that multiple areas in Colorado will be damaged by hail this year. Hail is indiscriminate – it will damage roofs, rooftop equipment, gutters, downspouts, fascia, windows, screens, siding, stucco, lighting, garages doors, patio furniture, fencing, air conditioning units, mailboxes, satellite dishes, skylights, landscaping, crops, vehicles and more. Hail damage is inevitable. It cannot be prevented, but you need to be prepared should your property sustain hail damage. If your property does not have a maintenance program wherein your roofs are inspected annually, you may wish to contract with a reputable roofing contractor for an annual inspection. There are a number of reasons for doing so, but primarily it allows you to establish any new damage. The roofing contractor or your internal maintenance staff must thoroughly assess and note damage, if any, on an annual basis. As the property owner or property manager, you will address needs to protect the property. A manufacturer warranty may be voided if the roof is damaged by hail. There are many types of roofs – some are more susceptible to hail damage than others. Manufacturers of roofing products have improved their products, yet as good as the products are, hail can and will continue to cause damage. Roofs can be comprised of many components, including asphalt shingles, built-up ballast roofs with a gravel covering, roofs with a single-ply membrane such as TPO (thermoplastic olefin), EPDM (ethylene propylene diene terpolymer), tile or metal panels. The type of roof installed on commercial buildings is dependent on many factors, including the cost of installation, protection provided and the manufacturer’s warranty. If your property recently was purchased, sold, refinanced or insured by a different insurance company, an appraisal or inspection may have been completed, which could identify hazards that should be rectified and identify existing damage. The carrier always has the option of sending a representative to inspect the property before extending coverage; if the carrier issues a policy for the property, it assumed the risk of that property – and if wear and tear are evident, they are existing conditions and should not be used as the basis to exclude coverage. A benefit in having an annual inspection completed, much like an appraisal of the property, is to learn from a qualified individual if there are maintenance issues. For example, whether the roof is in poor, good or excellent condition and if repairs are warranted. It is a benefit to know of any existing damage. With these types of reports, especially if provided to your insurance company, you can credibly rebut certain assertions, which may be cited as a means to limit or deny coverage. Claim Challenges Troubling for a property owner or property manager is when a hailstorm hits a large area, the insured notes hail damage to the property, promptly informs the insurance company of a legitimate claim, only for a representative of the insurance company to deny the claim. Reasons often cited by representatives of the insurance company include the evident damage is not hail damage, the evident damage is caused by wear and tear over time, the evident damage is caused by “foot traffic” (multiple individuals over the course of time walking on a roof loosening granules on asphalt shingles), or the evident damage was not sustained during the applicable policy period. In addition, should the insurance company acknowledge damage, the cost of required repairs or the “amount of loss” often is disputed. Insurance company representatives, whether an in-house adjuster or an independent adjuster, may inspect the roof and property – or they may retain an outside consultant, such as an engineer, to inspect the property. Just as the individual(s) property owners might inspect the roofs and properties to accurately assess the damage, those sent to the property on behalf of the insurance company similarly are obligated to accurately and ethically assess the damage. Yet often input from representatives of the insurance company appear to attribute evident damage to anything but hail. Reasonable and defendable expenses, which are accepted within the property claims industry, such as a general contractor’s supervision fees and overhead and profit, are indiscriminately challenged by representatives of many insurance companies. Tips Take pictures of the property now reflecting the condition of the roof and property before the next hail storm. Considering having your roof inspected annually and address required repairs on a regular basis. Document any hail loss, including photos reflecting the size of hailstones and damage. Reach out to your tenants and residents to corroborate and accurately capture damage. Finally, work with a reputable contractor to establish a claim. Ensure you are accurate in submitting a claim – and insist representatives of your insurance carrier consider the information you submit rather than relying solely on information provided by consultants the carrier might retain. Responsibility for the property and any claim for covered damages are yours. Be prepared and be proactive; hail season is coming.