Back to Spring 2022 Issue

New Roof Covering Limitation Endorsement Available

Spring 2022 Issue

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:

  1. Loss settlement is on an ACV basis.
  2. 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.