Oh boy. Here comes the next new can of worms. I’ve got an idea. Why don’t carriers start pricing the homeowners and property products in general so that they at least break even? Stop with the gimmicks and get to the heart of the issue. This new gimmick will just be nickel holding up a dollar like all the rest. Price it properly please. This is one of few industries that through its own incompetence, gives itself a bad rap.
Not to bust your bubble, BOBP, but getting adequate rate is almost impossible in most states because it has become a politicized issue. For a prime example, take a look at Florida. And they’re not alone. I can’t think of a single carrier that wouldn’t LOVE to have a rate to at least guarantee that they wouldn’t LOSE money on property insurance. It’s not incompetence causing a problem in many cases, it’s interference from regulators, politicians, consumer advocacy groups, et al screaming about the affordability of insurance without understanding the mechanics of appropriate rates and spread of risk.
Another prime example is that of NC. The NCRB has been trying to get a rate increase through for over a year. I believe the indications reflected a 17% increase (that’s overall average). The state finally agreed to a 7% increase.
Industry incompetence? Hardly.
Uneducated public, and placating politicians – most likely.
That’s a link to the rate sheet, but you’ll note that the beach and coastal areas need a much larger rate increase then what was given, or even what was requested.
I can see this opening another problem at claims time. Say there are two hail storms, no leaks, no coverage, just cosmetic damage. The next spring, another storm comes thru and this one causes leaks.
The adjustor will say, oh, that’s old damage and thus ensues the fun…..
TX Agent we have had the cosmetic exclusion in Texas for nearly 20 years now. Where have you been?? The vest majority of policies that cover homes with metal roofs have a cosmetic exclusion attached…
TX.. agree. This is also another way for a company to avoid having to underwrite/inspect the risk up front to make sure it is an “acceptable” risk. With automated underwriting being the way to lower costs many PL companies are trying to mitigate losses by paring down the policy to limit coverages. The base rate will be good, but then will start to charge more to buy back coverages that use to be part of the policy. Pushes more of the e/o to the agency.
How do you define differentiate cosmetic from functional damage on traditional and architectual shingles? Insurers will argue that a few dings to the surface do not compromise the shingle structure, but the storm chasing roof sales industry will argue that any localized loss of mineral will expedite the demise of the shingle. Litigate every loss?
The cosmetic exclusion applies to metal roof surfaces mainly. Any granular loss on a shingle is considered a physical loss and therefore it would be covered. If the granules on the shingle are compromised, it is no longer just cosmetic. Just like on a metal roof if the seams between the metal sheets are compromised, it is no longer cosmetic only. This is well established coverage in Texas. I still don’t understand why this is so new to the rest of the country.
allow the insurance company to inspect the claim before letting the storm chasing contractor rip the roof off. If the insured rips off the roof before the carrier inspects, then no coverage.
Many architectual shingle warrantee are voided by hail damage. I’ve experience damage that insurance company felt was only cosmetic, but turned out when shingles were removed to cause demage to roof plywood.At first company did not want to pay. Only when pictures of damage plywood revealed severe damage did they pay claim.I can see more and more companies will deny claims under this new coverage unless homeowner actually remove shingles to show damage, since they did not want to pay for cosmedic reasons based on their adjster report.
As I read through this I must say that I am not at all surprised. Insurance is merely a game of smoke and mirrors anymore. Creating an illusion that something exists, when indeed it really doesn’t. For example, the insurance companies Poor John appearance when trying to manipulate insurance regulators into allowing them to exclude coverage or raise rates, yet they post record profits. This / These types of endorsements / exclusion will and are abused by the insurance companies on a daily basis. I see it all the time. They also have droves of litigants willing to carry their water for them. You see, insurance is a promise and the insurer owes their very existence to the insured they so willing collect premiums from. I would suggest that the insurance companies quit spending money on trying to figure out how not to cover things and divert the money from the litany of television ads being ran to offset the “losses” they incur by actually honoring their obligations per the insuring agreement / contract.
Cosmetic Junk insurance and most home & businesses do not even know they have this endorsement in their insurance policies.When you have hail damage It not only damages the face of the shingle it damages the matting in the shingle, voids the warranty, shortens the life expectancy of shingles. If they do pay, they are only going to pay you cash value, not replacement cost. i.e.example Owner builds new restaurant and adds beautiful metal roof for accent. He has this Cosmetic endorsement so now he is left with a dented roof on a new restaurant which reduces curb appeal and creates diminished value to the property.Junk
As an adjuster in Tornado Alley, I often see old metal roofs that have hail dings. My first impression when I see many hail dents, is are the hail dents from this hailstorm or the one last year, or the year before that and so on, since it hails every year in Tornado Alley. Assuming there’s coverage, with a cosmetic endorsement the insured won’t be compensated for a roof the insured had no intention of replacing. The other solution is the ACV with a W&H deductible. By the time I take non-recoverable depreciation and apply the W&H deductible, there’s not much of a payment. I have insureds tell me they went with a metal roof because they got tired of replacing the comp shingle roof every other year due to a hailstorms. Now that they have hail dents in their metal roofs, they expect to be paid for their cosmetic damage to the fairly new metal roof in the absence of cosmetic damage exclusion. For the most part, one cannot see the hail dents unless you’re on the roof and the lightning is just right. These insureds view property insurance as a deferred savings plan. It’s these types of losses the carrier is attempting to exclude or limit the coverage.
Oh boy. Here comes the next new can of worms. I’ve got an idea. Why don’t carriers start pricing the homeowners and property products in general so that they at least break even? Stop with the gimmicks and get to the heart of the issue. This new gimmick will just be nickel holding up a dollar like all the rest. Price it properly please. This is one of few industries that through its own incompetence, gives itself a bad rap.
Not to bust your bubble, BOBP, but getting adequate rate is almost impossible in most states because it has become a politicized issue. For a prime example, take a look at Florida. And they’re not alone. I can’t think of a single carrier that wouldn’t LOVE to have a rate to at least guarantee that they wouldn’t LOSE money on property insurance. It’s not incompetence causing a problem in many cases, it’s interference from regulators, politicians, consumer advocacy groups, et al screaming about the affordability of insurance without understanding the mechanics of appropriate rates and spread of risk.
Another prime example is that of NC. The NCRB has been trying to get a rate increase through for over a year. I believe the indications reflected a 17% increase (that’s overall average). The state finally agreed to a 7% increase.
Industry incompetence? Hardly.
Uneducated public, and placating politicians – most likely.
Speaking of rate increases in NC, we did finally get one for some of the coastal counties.
http://www.iiaba.net/webfolder/nc/linked%20documents/3-5%202013%20ho%20rates%20by%20territory.pdf
That’s a link to the rate sheet, but you’ll note that the beach and coastal areas need a much larger rate increase then what was given, or even what was requested.
I can see this opening another problem at claims time. Say there are two hail storms, no leaks, no coverage, just cosmetic damage. The next spring, another storm comes thru and this one causes leaks.
The adjustor will say, oh, that’s old damage and thus ensues the fun…..
TX Agent we have had the cosmetic exclusion in Texas for nearly 20 years now. Where have you been?? The vest majority of policies that cover homes with metal roofs have a cosmetic exclusion attached…
exactly
TX.. agree. This is also another way for a company to avoid having to underwrite/inspect the risk up front to make sure it is an “acceptable” risk. With automated underwriting being the way to lower costs many PL companies are trying to mitigate losses by paring down the policy to limit coverages. The base rate will be good, but then will start to charge more to buy back coverages that use to be part of the policy. Pushes more of the e/o to the agency.
How do you define differentiate cosmetic from functional damage on traditional and architectual shingles? Insurers will argue that a few dings to the surface do not compromise the shingle structure, but the storm chasing roof sales industry will argue that any localized loss of mineral will expedite the demise of the shingle. Litigate every loss?
The cosmetic exclusion applies to metal roof surfaces mainly. Any granular loss on a shingle is considered a physical loss and therefore it would be covered. If the granules on the shingle are compromised, it is no longer just cosmetic. Just like on a metal roof if the seams between the metal sheets are compromised, it is no longer cosmetic only. This is well established coverage in Texas. I still don’t understand why this is so new to the rest of the country.
allow the insurance company to inspect the claim before letting the storm chasing contractor rip the roof off. If the insured rips off the roof before the carrier inspects, then no coverage.
Many architectual shingle warrantee are voided by hail damage. I’ve experience damage that insurance company felt was only cosmetic, but turned out when shingles were removed to cause demage to roof plywood.At first company did not want to pay. Only when pictures of damage plywood revealed severe damage did they pay claim.I can see more and more companies will deny claims under this new coverage unless homeowner actually remove shingles to show damage, since they did not want to pay for cosmedic reasons based on their adjster report.
Spellcheck please. Your argument lost a lot of credibility when I could barely read what you wrote.
As I read through this I must say that I am not at all surprised. Insurance is merely a game of smoke and mirrors anymore. Creating an illusion that something exists, when indeed it really doesn’t. For example, the insurance companies Poor John appearance when trying to manipulate insurance regulators into allowing them to exclude coverage or raise rates, yet they post record profits. This / These types of endorsements / exclusion will and are abused by the insurance companies on a daily basis. I see it all the time. They also have droves of litigants willing to carry their water for them. You see, insurance is a promise and the insurer owes their very existence to the insured they so willing collect premiums from. I would suggest that the insurance companies quit spending money on trying to figure out how not to cover things and divert the money from the litany of television ads being ran to offset the “losses” they incur by actually honoring their obligations per the insuring agreement / contract.
Is it mandatory for the company to give a credit on the policy if an insured has the cosmetic roof exclusion endorsement?
Cosmetic Junk insurance and most home & businesses do not even know they have this endorsement in their insurance policies.When you have hail damage It not only damages the face of the shingle it damages the matting in the shingle, voids the warranty, shortens the life expectancy of shingles. If they do pay, they are only going to pay you cash value, not replacement cost. i.e.example Owner builds new restaurant and adds beautiful metal roof for accent. He has this Cosmetic endorsement so now he is left with a dented roof on a new restaurant which reduces curb appeal and creates diminished value to the property.Junk
As an adjuster in Tornado Alley, I often see old metal roofs that have hail dings. My first impression when I see many hail dents, is are the hail dents from this hailstorm or the one last year, or the year before that and so on, since it hails every year in Tornado Alley. Assuming there’s coverage, with a cosmetic endorsement the insured won’t be compensated for a roof the insured had no intention of replacing. The other solution is the ACV with a W&H deductible. By the time I take non-recoverable depreciation and apply the W&H deductible, there’s not much of a payment. I have insureds tell me they went with a metal roof because they got tired of replacing the comp shingle roof every other year due to a hailstorms. Now that they have hail dents in their metal roofs, they expect to be paid for their cosmetic damage to the fairly new metal roof in the absence of cosmetic damage exclusion. For the most part, one cannot see the hail dents unless you’re on the roof and the lightning is just right. These insureds view property insurance as a deferred savings plan. It’s these types of losses the carrier is attempting to exclude or limit the coverage.