Listen To This Bull

Recent State Farm Problems and Identified Policy Provisions that Provide Solutions.

Recent State Farm Problems and Identified Policy Provisions that Provide Solutions.

Recently we have seen a lot of waves being made by State Farm. Contractors and Public Adjusters report that State Farm is not approving replacement of roofs without some serious fight. They say that State Farm believes they have previously misinterpreted their own policy and have corrected the error. Lets ignore the fact that the author of something probably isn’t going to misinterpret what they wrote themselves and try to find a practical solution.

Most of the denials seems to come with some Bull about the carrier only owing for “Direct Physical Loss”. I wrote a previous article on this that you can find in my blog, so I’m not going to rehash it. Suffice it to say that many courts of law have defined “Direct Physical Loss” as being synonymous with Proximate Cause. Damage that occurs as a result of X, is all part of the direct physical loss including damage caused by the REPAIR itself.
When you point out that repairs cannot be done, the adjusters are often saying that that is because of Wear and Tear that is excluded by the policy. This policy excludes wear and it excludes tear, but it doesn’t exclude “wear and tear”. Lets put that aside though and look at the actual exclusion language. Does the policy support their claims that they don’t owe for damage caused during a repair because it isn’t “direct physical loss”, and is actually excluded as the result of “wear and tear”?
State Farm Policy Review

The wear and tear exclusion falls under an exclusionary section that specifies that they will not pay for losses directly and immediately caused by or consisting of wear and tear. Everything consists of wear and tear… If they are going to apply that to mean they will not pay for any loss that is the result of a condition of wear and tear, similar to the Farmers Smart Plan, then we can attack this in a similar way to the Smart Plan. (NOTE: The anti-concurrent causation language is in a DIFFERENT exclusionary section.) So, if the roof is “brittle”, then they don’t owe for the additional cost caused by the brittleness. BUT, they have an ensuing loss provision attached to the wear and tear exclusion. (Actual policy language at the bottom)

This means there are 2 options:

1. Find a non-wear and tear related reason the roof isn’t repairable. Remove the term “brittle” from your vocabulary. There are many ways that a roof can be damaged during a repair that has nothing to do with its age or condition.

If matting transfer is caused when breaking the seals, then the roof isn’t repairable, and since this happens on brand new shingles, it is not a function of wear and tear.

If the nails cannot be removed without ripping through the shingle because they are solidly fastened to the decking, then the roof is not repairable. Super strong nails have nothing to do with wear and tear. They don’t get stronger over time.

2. Ask for a denial letter from the carrier for the surrounding shingles. They will send a letter that says they don’t owe for wear and tear. Point out the ensuing loss provision at the end that says they will pay for any resulting loss caused by wear and tear.

They will also point out that they only owe for direct physical loss. This is a trap. Direct Physical Loss has been defined by courts of law to be synonymous with “Proximate Cause”. If damage is caused during a repair that was performed because of wind, then the proximate cause for the loss is wind. The loss would not have occurred in the absence of the wind, because the repair would not have had to be performed. Also, under the ensuing loss provision for wear and tear, the policy specifies that they will pay for ANY resulting loss. So the policy is in your favor.


“We will not pay for any loss to the property described in Coverage A that consists of, or is directly and immediately caused by, one or more of the perils listed in items a. through m. below, regardless of whether the loss occurs abruptly or gradually, involves isolated or widespread damage, arises from natural or external forces, or occurs as a result of any combination of these:

g. wear, tear, decay, marring, scratching, deterioration, inherent vice, latent defect, or mechanical breakdown

However, we will pay for any resulting loss from items a. through l. unless the resulting loss is itself a Loss Not Insured as described in this Section.

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