New Roof Covering Limitation Endorsement Available
By Sherry Taylor, Manager of Product Development and Support
Our clients have expressed concern about claims with damage to fabric or plastic coverings on greenhouse and hoop-type buildings. They wanted to provide better coverage on the structure itself since it was new or in good shape, while not providing the roof covering materials with coverage that was too robust. As a result, we have developed an endorsement that applies to Farmowners Coverage E that accomplishes two things.
First, it adds a new definition for roof covering materials that includes canvas, fabric, vinyl and similar options. The endorsement also incorporates other items into the definition — fasteners and any moisture-protection materials used with the roofing, such as flashing. By adding this definition, specific provisions apply only to these materials. This leads to the second issue addressed by the endorsement: loss settlement for the types of materials included in the new definition.
The endorsement (FO 5805 11 21) includes a table that allows for a 15-year depreciation schedule on these materials that are more susceptible to the elements. It also specifically states:
- Loss settlement is on an ACV basis.
- The applicable depreciation percentage also will apply to profit, labor, taxes and fees associated with the replacement of the newly defined roofing materials.
Not only is the lesser year depreciation schedule a benefit, but the language will prevent an insured from claiming the materials are not roofing but siding, since both the sides and roof are composed of the same material. The way the definition is worded clarifies that it does not matter how the materials are fastened. If canvas or other fabric is involved, the ACV and depreciation schedule will apply.
The endorsement FO 5805 11 21 has been filed and approved in Wisconsin for use with the Farmowners program. It can be used immediately. The same endorsement will be used in the Farm Fire program, but is not yet approved. The endorsement is now available on the WAMIC website, but please allow approximately 30 days before using it with FL forms.
All clients in other states will need to file the endorsement per any state requirements. Copies for filing can be found on the WRC website under Personal Lines Underwriting/WRC Forms.
Thanks to Central Wisconsin Mutual Insurance Company for getting the ball rolling on this.
As always, feel free to contact the Mutual Assistance team if you have any questions.