One of the singular most contentious and potentially costly fights with insurance companies (“Insurer”) revolves around decking and coverage to replace damaged or out-of-code decking. At almost every seminar or event we speak at someone will inevitably talk to us about decking and Insurer’s refusal to cover part or all of a necessary replacement. The debate is still hot and not fully settled in court and meanwhile, from a practical standpoint, contractors are left with the liability of an open roof structure with no weatherproofing or absorbing the cost to tarp or envelope the structure. So how is this being handled in Texas? We will view the problem from a residential perspective.*
Texas has adopted the International Residential Code (“IRC”) with regards to roofing standards. Specifically, the IRC addresses ‘Roof Assemblies’ in Chapter 9 showing that most weather-proofing materials must be installed over solid sheathed decks or spaced decks where applicable (EX. R905.2.2). Additionally, R908.3 states that a, “[r]oof replacement shall include the removal of existing layers of roof coverings down to the roof deck.” One caveat for the above section is found in R908.2 which generally states that the deck must support the new roof system and the, “loads that will be encountered during the installation of the roof covering system.” So when is a roof is unable to support a new roof system? That is a question of fact and generally discovered upon the contractor removing the weatherproofing materials (shingles, etc). Who is best at determining that? According to the National Roofing Contractors Association (“NRCA”) roofing manual, that is a question for a roofing contractor to determine. At the end of the day, the roofing contractor is an expert in his field. Additionally, the contractor carries the liability should the roof blow off or an installer fall through the roof during an install and thus contractors have an interest in making sure the roof, and the decking, are adequate.
The common arguments used by Insurers denying deck replacement are: 1) that the decking was not damaged as a result of the sudden loss (generally hail or wind); 2) that there is no code upgrade provision (“CO”) in the policy; or 3) they may not cover the expense even if local jurisdiction adopts, but doesn’t enforce, code provisions. While it may be true that the deck does not show indications of hail damage, the substrate is a part of the building structure and additionally a part of the roof assembly as specified by the National Roofing Contractors Association (“NRCA”) and as indicated above in Chapter 9 of the IRC, which are covered under most insurance policies. That removes decking from a coverage question and makes it a scope question.
So what happens when the weatherproofing materials are removed and the deck is exposed. Best case scenario, the decking is up to code and offers a nailable surface. The contractor will then install new roofing materials and be done. But what if the deck is: (Scenario A) not up code where CO coverage exists; or (B) not a nailable or usable substrate and must be replaced in order to accept new weatherproofing materials.
Scenario A: What about code upgrades where there is no damage to the deck? Per Toney v. State Farm Lloyds, the courts will enforce the provisions if the city or jurisdiction enforces the action. In other words, if the city does not interpret state or local code to require the upgrades the insurers generally will not cover the upgrades, nor will the courts enforce payment for the upgrades. This makes it a jurisdiction specific issue and the courts have held that where code upgrades were included in a policy and enforced by a building ordinance then, “if the enforcement is directly caused by the same Loss Insured and the requirement is in effect at the time the Loss Insured occurs” there should be coverage. In Toney, the city sent a letter purporting to enforce code upgrades, and then later retracted the same leaving no recourse for the Plaintiff to find coverage. The case went to appeal at the 5th Circuit Court and the homeowner lost. The end result for most contractors is that insurance companies are now requiring the city code enforcement to provide a letter or documentation showing enforcement of the codes pertaining to decking.
Scenario B: What recourse does a contractor have where the decking is not a nailable surface or well-suited for a new roof system. As mentioned above the deck is a part of the roof assembly and attached to the building structure, thus it is a covered item under most insurance policies. The question then becomes one of scope and not coverage. The requirements per the IRC regarding decking, as mentioned above, must be met to ensure a safe and complete product. So deck conditions become a question of fact determined by an expert. Who is an expert regarding roofing related issues: as we discussed above, the contractor. Will merely stating the fact that the deck needs to be replace persuade most insurers, probably not. However, a well-documented presentation with evidence, photos, and code provisions regarding decks (not code-upgrades) can go along way with either convincing the insurers or providing ammo for the PA or attorney, if needed.
So what is the bottom line with regards to decking replacement? As with most things legal, it depends. At Martinez Hsu we believe in giving our clients an honest assessment and review of their coverage issues. Additionally, some of these issues can potentially be fought in small claims court, for amounts of $20,000.00 or less, at a minimal cost. Should you or your clients run across decking issues please don’t hesitate to contact us.
*Although similar to residential, commercial decks adhere to a different set of specifications, ordinances, and policy provisions. Contact our office to discuss the specifics if you are dealing with a commercial property.
Martinez Hsu, P.C.
4001 Airport Freeway Suite 150
Bedford, Texas 76021