Is your commercial roof coverage as good as you think it is? Exclusions in commercial property insurance policies are becoming very common. Here’s what you need to know about roof limitation endorsements.
Hail Damage Exclusions
If you look at property insurance policies written in recent years, you may notice that these clauses can vary significantly from policy to policy, but they typically exclude coverage for cosmetic damage caused by wind and hail. Cosmetic damage refers to harm that affects the appearance of your property without impacting its functionality or structural integrity. For example, if a hailstorm dents your metal roof or cracks your siding but does not cause leaks or compromise the building’s structure, your policy might not cover the repair costs. This means that if a storm dents or damages your roof and you want it fixed for aesthetic reasons, you may have to pay for the repairs out of pocket.
It is crucial for property owners to thoroughly review their insurance policies and understand the specific exclusions related to wind and hail damage. Discussing these details with an insurance broker can help clarify coverage limitations and explore options for additional coverage if necessary. Being informed about these exclusions allows property owners to better prepare for potential out-of-pocket expenses and to make more informed decisions about maintaining and protecting their investments.
Why are cosmetic damage exclusions common?
Insurance underwriters must calculate risks to determine rates and coverage, and this can be tricky when key terms are vague. According to Claims Journal, “damage” is often not clearly defined in policies, and this can lead to any type of damage being covered. At the same time, the risk of minor hail damage can be especially difficult to evaluate. Cosmetic damage exclusions may be used to clarify and limit exactly what type of damage is or is not covered.
Back in 2013, cosmetic damage limitation endorsements were filed by both the American Association of Insurance Services and Insurance Services Office (ISO), two organizations that produce standardized forms and policies for property and casualty insurers. The new endorsements impacted both homeowners and commercial property owners and it was predicted then that they could become the norm.
Check Your Policy
You don’t want to find out that you don’t have enough insurance coverage after an incident occurs. Take time now to check your policy.
- Review your policy for exclusions. If you have questions about your policy, talk to your insurance broker.
- Assess your risk. It is also a good idea to consider how likely a storm is in your area. For example, major hailstorms were most frequent in Texas, Kansas, Nebraska, South Dakota and Colorado.
Secure Your Business: Review Your Commercial Roof Limitation Endorsements Today
Understanding what is included in your commercial roof coverage is crucial for your business to ensure there is adequate protection for your property. These endorsements, which are often added to commercial property insurance policies, can impose specific limits on coverage related to roof damage, typically resulting from wear and tear or aging. By carefully reviewing and negotiating these terms with the help of a knowledgeable insurance broker, you may be able to better manage their risk and avoid unexpected out-of-pocket expenses for roof repairs or replacements. We encourage you to talk to one of our commercial insurance specialists for assistance in understanding your policy’s coverage and exclusions.
