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I know I'm not answering your question I'm just throwing so more things on the table.

The HO-8 is an interesting policy to interpret.

 

For example; under the Loss Settlement section it states “the terms cost to repair or replace and replacement cost do not include the increased costs incurred to comply with the enforcement of any ordinance or law.” Could the city requirement be interpreted as an ordinance or law?

 

If so then how would we apply that statement as it relates to loss settlement under the condition 2. a. (2) , common construction materials and methods where functionally equivalent to and less costly than obsolete, antique or custom construction materials and methods.  Would it even apply?

These type claims are very hard to adjust . The insured has put the insurance  co.in the position : " bad things are taking place on my roof and interior ceilings", "and  I abandon my house to the insurance co. as its their problem".  Nope.

Try to go back to the core of adjusting  "risk of loss"  WHAT IS CAUSE of the leaks... could be several that are not covered by insurance. Wear & tear, age, faulty design, faulty workmanship, deterioration etc.

If the roof was not destroyed/damaged by a peril that every one understands such as wind, aircraft, v&mm then it is not covered as laying a comp roof over a slate roof is not a practice that is excepted in any building/roofing journals. It was jury rigged and this is not a risk of loss as the consequences are not insurable.

Keep in mind the felt or comp layer is worn out under the slate and this was a patch job by this owner or the prior owner.

I would not recommend paying this problem claim if I was the adjuster. Ask the carrier for their advise .

Discovered the loss was already paid. Sounds like you paid for a R &R of a Hvy comp roof. I would take the position "this is what you had this is what  you get" we are finished.

Ray,
Great explaination. We are fortunate to have your viewpoint here on CADO. I personally have learn many things from your posts over the last several years.

Well thank you Bill, I had several very good adjusters along with property and casualty underwriters that gave me sound advise when I would take my questions to them as a young adjuster. I wanted all the complex losses and casualty claims .

   RE: Construction Process for Comp over Slate.

Determine the proximate cause of the leaks and proceed from there.  For this discussion, I am assuming that the cause is wind and secondary causes are that the wind uncovered the previously damaged slate. 

As you mentioned, the slate is in very bad condition so it will not serve as a solid underlayment for a new layer of composition shingles and should not have served as the current underlayment for the current layer.  However, the original underlayment may be gap decking and forced the composition shingle roofers to use the solid slate surface instead of tearing off the slate.  Furthermore, the old/original decking will probably incur much damage throughout the demo process and not be able to be reused (this is where coverage for rot can be gray and when coverage is gray, you will most certainly pay). 

It appears that you have chosen to tear out the composition, slate, and repair any of the original decking (assuming that is the last layer) and replace with slate as the underlayment and comp. as the top layer.  Essentially, you just paid the insured for two (2)roofs.  What would you do if the insured had 2, or 5, or more layers of composition roofing?  Would it be any different than if they had 3 layers of slate, 3 layers of metal, and 4 layers of comp?  It shouldn't be and you need to advise the insured that they got a great deal.

I wouldn't sweat too much over the construction process of applying comp over slate, since it likely won't be happening in this case.  If in the Vieux Carre district, officials will ensure that compliance is met.  Is this claim in New Orleans?

   RE: Depreciation.

Without commenting on the language of the HO8 policy, it appears that the biggest issue this claim is faced with is that of depreciation.  Based on the facts given, I'll bet you are right on the money with your estimated amount of depreciation.  However, proceed with caution as some courts construe unreasonable levels of depreciation as bad faith.  Being "reasonable" and "right" are often completely different- especially depending on the area where you are working on your claims. 

As a general rule, when depreciating past 50%, make sure that you document the age of the present material and are depreciating against the useful life of the material costs only.  As you may gather, I recommend using the straight line depreciation method.  If you are depreciating against the material and labor costs, you will increase the risk of heavier legal scrutiny.  If the carrier requires that labor be depreciatied anyway, document that and save your assetts.  Make sure that your depreciation is "reasonable" in that it allows the insured a reasonable allowance for recovery.

   RE: Lagniappe.

If this claim is in New Orleans or South Louisiana, you may suggest to the homeowner or property owner that they seek assistance through the Louisiana Recovery Authority (LRA).  Further assistance to the owner will be made in writing up all of the damage so that they may relay their loss estimate to their CPA (don't give them tax advice, just tell them to show their estimate to their CPA).

Who's the carrier? I'm changing carriers . When I have a pipe burst and flood my carpets and ruins the hardwood floors underneath. I'll get new wood floors and carpet to cover them. I just hope I don't ruin the new wood floors when I install the carpet on top.