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Last Post 07/22/2007 11:22 PM by  HuskerCat
Line of Sight Issue
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PvtNvestigator
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02/24/2007 8:16 PM

    Good evening all.

    I would like to get some of your input in the line of sight  matching issue as expressed in states such as Florida & Ohio. I have heard it explained in several different manners with the most recent being that it is as viewed from the front of the residence only and across the street. I am going to research legislation on the matter, but thought that I would get a new topic going.

    Bill R.

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    Ray Hall
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    02/24/2007 8:57 PM

    Don't think any insurance company has ever published any thing on this as it is not addressed in the contract.  Do not think you will find any court cases in any state that this specific problem was the cause of the lawsuit.

    It has always been a compromise to settle as long as I have been around.

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    PvtNvestigator
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    02/24/2007 9:43 PM
    Ray,
    You seem to be correct. I could not locate a single article on the subject.
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    CharlesC
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    02/26/2007 6:21 PM
    There was a ruling by the State AG in MN in 1998 in which he ruled that home owners did not pay premiums for a patchwork quilt of repairs to their siding and roofing. I don't remember the Ins Carrier. It was Not SF.
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    Ray Hall
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    02/26/2007 7:54 PM

    These AG and Ins. Commish opines influence SOME carriers, but not all. The contract can not be changed by the opines.

    In the largest commish ruleing I can recall in Texas was the "nailable surface-lay over rule" in about 1991. Thousands of wood shingle decks were laid over with comp roofs several times4-5. Well as you would imagine after haveing been nailed into 4-5 times in the last 60-80 years, were was the "nailable surface". The edit was to lay 1/2 plywood over the shingle lath then comp.

    This was the way a prudent person to repair storm damage; however several small carriers sued the commish and did not have to pay for TO of wood, redeck, and depreciation on the comp layer only. I worked for this small company on regular claims for many years.  Needless to say I had some fun with young roofers when I whipped out the courts opine.

    You should ask the rules of the game when you get to the site, but I have never heard of  a 4 side wrap UNLESS it went to the top.

    I can still hear the loss supertendant for the largest writer in California, when 110 new troopers (100 from Texas). When the adjusters started the butterfly wings comparison on the thick butt cedar shakes that were 35 years old and covered with green moss (under the trees)." If its made by a man, it can be repaired by a man". You know she was correct and the one's who got the message stayed all winter long.

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    sbeau4014
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    02/26/2007 9:22 PM
    The ruling from the hailstorm in MN was against American Family I believe, but I don't think the term "line of sight" came into play at all on that. Someone here may know more about it as I wasn't involved in that storm at all, just had some friends working it, one of which is a AMFAM staffy.
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    Dimechimes
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    02/27/2007 12:30 AM
    Here's some info on the American Family and MN Attorney General siding case in this old article posted at www.agentandbroker.com article discussing Pair and Set HO clauses(I'd not seen that used in connection with siding except this article). Also attached is a link to an OH case involving Nationwide on a siding match issue and complaint for Bad Faith for not matching the siding:

    An Ohio case involving Nationwide insurance on siding/matching issue:

    http://www.sconet.state.oh.us/rod/n...o-1061.pdf

    The following article is found at www.Agentandbroker.com -search archives and enter Pair and Set to find this if the link breaks again as it's moved since we originally had posted information on this at ClaimSmentor:

    http://www.agentandbroker.com/ME2/A...F282A56B83


    Issue Date: JULY 2001, Posted On: 7/1/2001

    An equitable solution to the 'matching problem
    Jack Hungelmann, CPCU, CIC, ARe
    ON MAY 15, 1998, the Minneapolis/St. Paul metropolitan area experienced the worst hailstorm in its history. It caused nearly $1 billion in damage to cars, home siding and roofs. That was more damage than was caused by the cumulative effect of all tornadoes in the area in the past 50 years!

    There was a lot of "weeping and gnashing of teeth" among homeowners because of claim disputes. One of the biggest sources of complaints consisted of roof and siding "matching" problems. Typically, the storm damaged about half of a house's roof or two sides of its siding. Under the homeowners policy's replacement-cost provisions, insurers paid to repair or replace the damage, usually with no deduction for depreciation. In most cases, however, the insured suffered an additional loss when the new shingles or siding didn't match the old undamaged areas. That usually was because replacements for the original shingles or siding-in regard to color or materials or both-were no longer available.

    Clearly, an insured is not made whole when damaged areas are repaired in such a way that they don't match undamaged areas. Yet, the homeowners policy explicitly states it will repair or replace only the damaged areas. Under a strict interpretation of the policy's replacement-cost provisions, insurers are not obligated to pay anything additional just because a manufacturer discontinues a shingle, or a siding pattern or color.

    As hard-nosed as that interpretation sounds, I agree with it. Replacement-cost provisions clearly apply to direct damage only. But there is a clause in the homeowners policy that does address the indirect financial loss caused from a mismatch: the "pair and set" clause.

    "Hold on," you're saying. "That clause applies only to personal property, such as when you lose one diamond earring from a set of two, or when an expensive dish that is part of a set of 10 is damaged."

    I disagree. The clause, which is found under "Section I-Conditions" of the HO 2000 homeowners policy, reads as follows:

    "In case of loss to a pair or set we may elect to:

    "1. Repair or replace any part to restore the pair or set to its value before the loss; or

    "2. Pay the difference between actutal cash value of the property before and after the loss."

    That's it. Nowhere does the clause say, "This applies only to personal property." True, its use historically has related to personal property, but in my opinion it also can apply to structures.

    How the pair and set clause works

    The pair and set clause attempts to compensate an insured for the damage to, or loss of, an irreplaceable item that is part of a pair or set. In addition to covering this direct financial loss, the clause covers the indirect loss resulting from the fact that the value of the remaining item(s) in the now incomplete pair or set has diminished.

    Assume that a set of 10 antique plates is valued at $2,000. The value of one broken plate is $200, but if it can't be replaced, the value of the remaining plates is not $1,800. They now may be worth only $900 because there no longer is a full set. The pair and set clause requires the insurance company to pay, in addition to the $200 for the one damaged plate, $900 for the loss in value of the set of remaining plates.

    Applying the clause to structures

    I only recently realized that the pair and set clause could apply to structural matching claims. Bob Leitschuh, a fellow agent in my office, had a client with a structural matching dispute and asked me if the pair and set clause could apply. When I researched it, I concluded that it could.

    Bob's client had storm damage to two sides of the house. The siding was 15 years old, with an original life of 30 years. The original siding was white 10-inch aluminum, which was no longer available. The closest match was white 4-inch vinyl. That was not a good match, so the insured demanded that the insurer spend $7,800 to replace siding on all four sides of the house. The insurer refused to pay for more than the $3,900 needed to replace the two damaged sides.

    The dispute went to court, where the insured produced appraisals showing his home was valued for $94,000 before the storm, when the siding all matched. With the mismatched siding, the appraised value fell to $90,000. (In other words, the set value of the undamaged siding had decreased by $4,000.)

    The court awarded the insured $2,000 for the diminished house value, based on the fact that the undamaged siding had only half of its initial 30-year life left. (In essence, the court awarded the insured the ACV/depreciated value loss for the undamaged siding.)

    "Before" and "after" home appraisals are probably the most accurate way to determine the loss in set value of the remaining set of undamaged, mismatched siding or shingles. Such appraisals are expensive and cumbersome and sometimes may delay the claim, but they can help clients obtain compensation for their economic loss from the mismatch under a homeowners policy's pair and set clause. The cost of the appraisals should be paid for by the insurance company as an adjustment expense.

    But rather than go to the expense and trouble of real-estate appraisals, I think an equally equitable and less cumbersome solution would be to pay insureds the "actual cash value" of the undamaged mismatched areas. Thus, in any storm involving a structural matching problem, the insured would be paid the full replacement cost of the damaged areas under a homeowners policy's replacement cost provisions and the depreciated ACV value of the mismatched areas under the policy's pair and set provision.

    An example

    Suppose half of your roof is damaged in a storm, and the new shingles won't match the old. The replacement cost is $5,000 for the damaged part of the roof and $10,000 for the whole roof. The table above shows how a homeowners policy would pay, based on the age of the roof. Assume a 20-year expected life.

    Considering that at the end of each 20-year period the insured would have to pay for an entire roof himself if it were undamaged, getting paid for the depreciated value of the undamaged shingles is equitable. As the table indicates, an insured would receive an additional $2,500 from the pair and set clause if his or her roof was 10 years old and nothing if it was 20 years old. Why? Because the roof was due for a full replacement anyway, so the 20-year-old undamaged roof had no remaining value.



    When a storm partially damages a home's roof or siding, and the insured suffers additional loss because new materials can't be found to match the old, applying the pair and set clause to compensate the insured for his or her financial loss for the undamaged areas that don't match is an equitable way for both parties to resolve structural matching problems. And it is fully justified under current policy provisions.

    Jack Hungelmann, who has been a claims adjuster, insurance agent, consultant and instructor for 29 years, has contributed numerous articles to American AGENT & BROKER. He is the author of "Insurance For Dummies," a consumer-oriented guide to purchasing insurance, recently published by Hungry Minds Inc.


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    Follow-up letter from Jack Hungelmann:

    Minnesota court required insurer to pay 'matching' claims

    As a follow-up to my article in the July issue ("An Equitable Solution to the 'Matching' Problem"), I'd like to point out that legal action sometimes is a consequence of our industry's failure to address the financial loss suffered by homeowners when insureds' damaged roofing or siding is replaced with materials that do not match the undamaged sections.

    Following a lot of complaints about this issue arising from a May 15, 1998, hailstorm, Minnesota's attorney general filed suit against American Family in an effort to require the insurer to pay not only for the replacement of damaged structural materials, but also to replace undamaged materials if they didn't reasonably match. American Family lost the case. Here's an excerpt of District Court Judge Patricia Kerr Karasov's Oct. 12, 2000 ruling:

    "1. The State is awarded partial summary judgment against American Family Mutual Insurance Company for declaratory relief that American Family's obligation to pay claims under replacement value provisions of its homeowners' insurance policies, based upon American Family's policies and Minn. Stat. {72A.201, Subd. 5(8) (1998)}:

    "a. requires American Family to pay for full replacement with materials of like kind and quality;

    "b. is not satisfied by the replacement of only those materials that are physically damaged by a storm, if the replacement materials do not or would not reasonably match in terms of color, quality, texture or type of material the existing materials on the policyholders' home; and

    "c. when the materials replacing the physically damaged materials do not or would not reasonably match the existing materials, American Family must also pay the sum necessary to replace the existing materials so there is a reasonable match, except where the mismatch is attributable to the natural weathering of the existing material."

    Jack Hungelmann, CPCU, CIC, ARe
    Corporate 4 Insurance Agency
    Edina, Minnesota




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    HuskerCat
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    02/27/2007 3:43 AM
    A similar ruling occurred in Missouri, I think it was the 2002 St Louis storm.... one side damaged, no reasonable match obtainable,  replace all 4 sides.  I worked a few of those, maybe somebody out here has more recent info?   That's why they call it the "Show Me" state.
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    Catmannn
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    02/28/2007 7:32 AM
    We like there states!!!!!!


    Houtz
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    Ray Hall
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    02/28/2007 2:09 PM

    Mr. Hungelmann wants to reach a conclusion . To reach a conclusion he uses words from insurance contracts that have nothing to do with the conclusion he wants.

    Pair & set is an Inland Marine word from day one on personal property only, NEVER real property. A dwelling can not be insured under any inland policy after it is completed.  Fire insurance charters are only permitted to write Homeowners.

    The old pair and set language came into the early homeowners policies from the Inland Marine department this is a sample: If under section I, there is a loss of an article which is part of a pair or set, the measure of loss shall be  a reasonable and fair proportion of the total value of the pair or set, giving consideration to the importance of said article, but such loss should not be construed to mean total loss of the pair or set.

    He did quote the HO 3 pair and set correct. Read all the fire insurance contracts from the Chicago fire to date and pair and set can not be found in any.

    Do not fall for this BS like all hotel furniture must match if any part of the pair and set is damaged, under the replacement cost clause.

    The RC clause has nothing to do with the direct damage to real or personal property. Work this amount up before you work up the new for old amounts. ONLY new for old coverage. .Do your self a favor and call it the New for Old clause and you will not mix it up with the scope of loss/damage. If you stay in this business you most learn how to deal with public adjusters, lawyers and just plain loons who seem to fly around catastrophe adjusters.

    Just remember the recoverable depreciation was purchased by a premium in the HO- 3 and other policies, BUT does not have any bearing on any coverage issue. None. It certainly can  not create direct loss/damage  not existing, but; MATCH. Learn how to handle these loons before the next big storm.

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    dparsons
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    03/13/2007 7:17 PM
    Ray is 100% right.  The Pair and Set Clause is just what is says.  Items that are either a pair or a set.  Siding and roofing is neither a "pair" nor a "set".  I beieve you can find some old case law on this and it applies to Personal Property.  The fact that someone can take exams and get a title doesn't make them a genius.  Texas courts, as well as others, have ruled LKQ does NOT mean it has to match.  New Mexico made this real easy by stating roofs facing streets have to be totally replaced, if repairs are needed from a covered peril.  What I have a hard time believing is this hail was so bad, it only got half the roof?
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    HuskerCat
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    03/13/2007 8:54 PM
    Mix a hail storm with 40mph+ winds, and you will find 1/2 roofs damaged....depending on roof pitch.   I have seen hail blown sideways & up, where just 1/2 of the roof was damaged, all the siding on 2 sides, and the drywall on the garage ceiling (yes...the ceiling!!) because the insureds could not get the double garage door to go down due to the wind as they rushed home.  This same storm also required replacing the brick veneer on the front of the homes that faced the storm.  Not your normal hail storm of course, but it does happen.
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    CATdawg
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    03/13/2007 9:21 PM
    >>This same storm also required replacing the brick veneer on the front of the homes that faced the storm.  Not your normal hail storm of course, but it does happen.<<

    Indeed!
    Lee Norwood, aka "CATdawg"
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    RandyC
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    03/14/2007 12:06 AM

    I'm looking at the ISO policy HO 3  91.  Section I --Conditions

    4.  Loss to a Pair or Set.  In case of loss to a pair or set we may elect to:

       a. Repair or replace any part to restore the pair or set to its  value before the loss; or

       b. Pay the difference between actual cash value of the property before and after the loss.

    Now I understand why siding may not be either a pair or set.  I've never heard anyone refer to their set of vinyl panels.  My Dad, my brother and two brother-in-laws installed siding for decades and I never heard them refer to any of their jobs as a "set".

    However, in the policy language above, there seems to be  no distinction between  property structure and personal property.  You guys know so much more than I...but I don't see it.    A pair of light fixtures on each side of a front entry seems to fit the definition of pair.  Porcelain faucets, hot and cold appear to be both structure and "pair".  A high quality, exterior double door seems like a 'set" of doors.  I have visions of the lites on the repaired/replaced side being just a few inches lower and maybe an inch or two smaller than the lites on the undamaged side, but of like kind and quality. 

    If my daughter, an attorney, has a clay tile blown into one of her two carriage lights on her front entry....how would we explain to her that we're going to replace only the broken one with a fixture that looks similar from a block away.   What part of the  policy will we  quote to make her understand that "pair and set" only applies to personal property?

    RandyC

     

     

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    Ray Hall
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    03/14/2007 11:56 AM

    Randy ,read a standard Fire and EC policy either the 165 line or the 163 line TX policy and any other fire policy and you will not find the word pair and set. In stuctures its well established law in all states that building materials will be replaced with the nearest LKQ in the event of a loss.

    "If you hear the sound of hoofs, think of horses rather than zebras".

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    RandyC
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    03/15/2007 11:30 PM
    Thanks, Ray,

    I haven't been able to find a copy of the 165 line or the 163 line yet, but I'm still looking. All I have are the basic, broad, and special DP forms which have the same pair and set language. I've reviewed several script HO policies on this issue and find the nuance of difference very interesting.


    Randy Cox




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    HuskerCat
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    03/16/2007 2:48 AM

    Ray, would you please fill us in on what you call  "The Fire Line  & EC 63's, 65's & so on".   Seems like these are Texas related, or some older forms that not many are familiar with.  Maybe some have pretended to be... but  I ,for one, have only a handle on the HO's, BOP's and the CPP's  (gve me some, or a lot of leeway,state-wise);  but is there any correlation?  Just curious. 

     

     

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    Ray Hall
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    03/16/2007 1:06 PM

    Sorry guys not many 165 line policys around these days.

    But the basic training we learned many years ago keeps cropping up.  It seems the problem is instructors who have stated . " If its  not excluded its covered" Thats not a correct way to teach insurance contracts as it is not a fact.

    On the line of sight issue you will not go wrong if you always go back to "repair of replace" when it comes to a loss of a pair or a loss to a set. My argument was "pair and set" applying to a hotel with a loss to personal property(furniture) and wall coverings to all simular articles in the entire hotel if a loss to a % of the total was damaged.

    This can be specificly insured( non admitted market) under an Inland Marine Policy as a contingency loss, IF you purchase the coverage. However it is not a given under any Fire Form. HO, DP,s CP, BOP, or 165 line.

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    sbeau4014
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    03/16/2007 6:39 PM
    Actually Ray you will probably find about every property policy written out there has the 165 lines (or the 163 that the old TX forms had in them) from the NY Standard Fire policy contained within them. You will note that the old Standard Fire Policy was 2-3 pages long where you have some BOP poliies these days that can be 30-40 pages long. I will almost guarantee that within that 30-40 page policy you will find about every word/sentence that was included in the old 165 lines, if the conditions are included in the main form. One difference is that the perils insured against have expanded considerably to where it won't just list fire, explosion and lightning. All that extra verbage in the forms today just provides definitions, additional coverage and conditions, etc, but the basic premise and language is still used in today's forms.
    To Mike and others that may not be familiar with the origon of the property coverages here in the US, they basically originated with the New york Standard Fire Policy of way back when (don't remember the year) and that has been revised a few times and retitled the Revised NY Standard Fire Policy of a given year. I would guess it wasn't until sometime in the 40's-50's or so that they started to get away from them and expand the coverages into what we have today. Tom and Ray were probably around adjusting claims when the original ones came out!!! I'm way too young for that Actually I'm thinking it was back around 1848 or some time frame like that. Everyone who handles property claims should read one of those hummers to get a real grasp of how coverages have evolved.
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    paigetex
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    03/20/2007 8:09 AM

    Hi all,

    Saw this thread while browsing one day. Just now have time to respond with my own comments. Last year in St. Louis, MO, the 'matching' issue was brought up by a contractor. He provided me with articles, one link posted below:

    http://www.insurancejournal.com/news/midwest/2001/06/15/13461.htm

    This dates back to the 2001 storm in MO and is not legislation, just a guideline of what the MO Dept of Insurance would like to see.  I worked for Safeco in this storm, and they employed the services of  www.sidingmatch.com to help find siding that a contractor said couldn't be matched. This requires an adjuster to remove a piece of siding and mail it to them, but it's an invaluable service to insurance carriers.

    Hope this helps while y'all discuss the policy issues with matching and line of sight.

     

     

    Paige
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    Ray Hall
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    03/20/2007 2:17 PM

    Steve: The  NY standard fire policy is the the most flawless contract ever written. The edition  I read were revised thru 1942.

    When you understand the basic fire & extended coverage contract (165 line policy) on all types of buildings and contents within them, the co insurance clause on commercial property and all the old endorsements the HO, DP, (dwelling) and the CP, BOP (commercial) is easy to understand.

    On another subject the insurance commish of each state, especially the windstorm states will began to back off these heavy handed rulings that only benefit contractors and some homeowners.

    I have an old Texas 163 line policy for policy scholars only*** email only.

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    Dimechimes
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    07/20/2007 9:31 AM

    Here is a new suit filed in TX due to siding match issues:

    http://www.setexasrecord.com/news/1...t-allstate

    I'm curious if any adjusters would have handled this differently based on carrier instructions during this storm?

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    vallerih
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    07/21/2007 11:41 AM

    My own opinion would be to allow siding for the house. The garage is a separate outbuilding and to allow new siding for it seems to me to be above and beyond what is reasonable. Unfortunately, the question of reasonable will boil down to a question of fact for a jury or arbitrator. Bottom line, we as independent's are working under the decisions and guidelines of the carrier we are working for and some are much more lienient than others. I have worked for carriers that replaced the entire roof on a victorian with numerous slopes when only 2 were damaged. I have worked for a carrier that would only allow for the three bottom rows of ceramic tile in a bath surround due to a pan and tub that needed to be torn out even though no matching tile could be found. We can only make recommendations and education of the laws and unfair claim practices of the state we are working in should dictate those recommendations. Our documentation should provide enough information to the carrier to make an educated decision. Examples of that sould include pictures of all four corners of the house and samples or photos of the closest match available. We are paid to do the best job we can and document each step, beyond that it is out of our control. If I were a homeowner that had 15 year old dark blue siding that had faded by half due to the sun, I certainly would not want half dark blue and half faded to light blue siding on my house. To me, that is reasonable.

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    Tom Toll
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    07/21/2007 12:22 PM

    Thats the risk the homeowner takes if they have vinyl installed. It fades over time. What if a hail storm came through and only damaged one piece of siding. What would you expect the insurance company to do then? What would the homeowner do if they did not have insurance coverage?

    Success is not final, failure is not fatal: it is the courage to continue that counts.
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    Ray Hall
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    07/22/2007 4:24 PM

    It seems this topic is always discussed by adjusters from the catastrophe side more than adjusters from the regular daily claims side. The catstrophe adjusters seem to have the opine this question has not been answered before this particular hail/wind storm and it had been probably litigated in ever state in the USA.

    My opine is most building materials can be replicated or found if enough time to find them is expended. Several roofing contractors in the US have mineral fibre shingles, slate, tile in the  warehouse and can ship. Several companys make vinyl siding to match old vinyl. About 2-3 companys re skin alum clad Anderson or Pela windows. Many mills can cut any plank siding made in the last 150 years. The same for DH- SH wood sash windows. Seals for double pane patio doors. Custom trim, base etc.

    Just turn these type losses back and let the supervisors close them and move on to the easy one's.  Also sometime the photo's will loose you arguments for you. Differant mis match  on old work. Exposed romex or EMT electrical on the exterior od a building. Non matching moulding, windows, doors, carpet, floors, plumbing exposed etc.

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