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Roof Denting Caused by Hail is Direct Physical Loss Covered by Insurance Policy, Advance Cable Company v. Cincinnati Insurance Company, 778 F.3d 743 (7th Cir. 2015)

In Florida, weather-related damage to homes is a frequent issue faced by homeowners. Our homeowners’ insurance lawyers find policies often have extensive sections and language devoted to defining what constitutes covered damages, particularly when it comes to those that are weather-related. Therefore, many of the disputes brought in court revolve around whether a particular claimed weather-related damage is a covered loss under a homeowners’ insurance policy. This case illustrates this issue, and why it is important to ensure that an insurance policy has clear language as intended by the parties.

In Advance Cable Company v. Cincinnati Insurance Company, a building was hit by a severe hailstorm and suffered roof damage. The building owners filed a claim with their insurance provider for a new roof, but the company denied the claim stating that the damage to the structure from the hailstorm was cosmetic in nature and specifically excluded from coverage. The insurance company argued that only damages that were substantial or structural in nature would fall within the meaning of direct physical loss that would be covered by the policy. The building owners filed suit in federal district court. The federal district court issued a decision in the case, holding that the insurance policy covered the damage from the hailstorm, and entered judgment for the building owners. The insurance company appealed.

The United States Court of Appeals for the Seventh Circuit heard the appeal. First, the Court analyzed the issue of whether the policy covered hail damage. The Court began its analysis with the definition of direct physical loss as stated in the policy. The policy did not provide a definition of the phrase, but the court found that the denting caused by the hail to the roof changed its physical characteristics. The Court also concluded that there was no dispute as to the cause of that damage and that to the extent that the roof suffered any harm, the hailstorm caused it. Further, the Court concluded that the policy did define the word loss as damage that is accidental in nature. While the insurance company argued that loss or damage does not include minor cosmetic damage, but must be sufficient harm that diminishes the function or value of the roof, the Court determined that the policy did not make that exception. The Court held that if the company intended cosmetic damages to be excluded from the policy, it should have written the language to state that the damage was substantial or structural in nature to be covered.

Additionally, the insurance company argued that it should not have to pay for a whole new roof just because the building suffered denting. The insurance company claimed that it would be an economic waste for it to pay for a new roof. However, the Court decided that the concept of economic waste is an issue of damages and not of coverage. The parties already stipulated to the issue of damages at the district court level, and the problem of coverage is what was on appeal. Therefore, the Court affirmed the decision of the district court for the building owners.

If your insurance company denied your homeowner’s insurance claim and you believe such denial was wrong, the Miami homeowner’s insurance lawyers at Greenberg, Stone & Urbano offer the assistance you need to obtain the results you desire.  With over 130 combined years of experience representing homeowner’s insurance clients across South Florida, our firm provides legal representation of unmatched excellence.  Contact our firm as soon as possible to start on the road to protecting your legal rights.  Our firm received an AV rating from Martindale-Hubbell and was ranked as a top firm in South Florida by the Miami Herald.   Put our exceptional personal injury attorneys to work on your case.  Call us at (888) 499-9700 or (305) 595-2400 or you can visit our website to schedule your initial consultation.


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