Multi-Family Complexes (Apartment and Condo): An In-Depth Look at Insuring the Many Exposures and Losses
Hail Damage Can Create Difficult Losses
One potentially serious, yet difficult-to-detect, type of loss that can strike an apartment or condo complex is hail storm damage. Scott Davidson, a public adjuster affiliated with the Texas and Colorado offices of Adjusters International—whose extensive background in dealing with claims of this type includes working with major property management firms and REITS (real estate investment trusts) across the country—has found that on-site managers often don’t even realize that their property has suffered hail damage.
As clues to that possibility he advises that following a hail storm, a determination be made as to whether trees or flowers on the property have been damaged, if cars parked in the open were dented or building windows have been broken. Equally important, the many portions of the building not commonly considered subject to damage—such as window and door screens, siding, and air conditioners—may also have suffered hail damage and should be closely inspected. Perhaps the most costly and least recognized is hail damage to roofs.
Hail damage to asphalt shingle roofs is often not immediately recognized. It may take up to two or three years after one or more hail storms for the roof to begin to leak. On a flat roof, unless the hail is quite large (baseball size or more), it is also hard to detect hail damage until much later.
There are three types of roofs commonly found in multi-family housing, each with its own hail damage problems. A built-up tar and gravel roof requires that the gravel be brushed back and a core sample be removed and sent to a building forensic lab for analysis to discover possible hail damage. It is easier to see hail damage on a modified bitumen roof, as the hail usually leaves a star shape or circles around the point of impact. Rubber roofs constructed of Ethylene Propylene Diene Monomer—or EPDM roofs as they are commonly called—are unique in the way hail affects them. Although the rubber or membrane may not have been cut, the styrofoam insulation board under the rubber may have been damaged and ponding may result.
Mr. Davidson also supplied the following hail loss example, from his experience with such claims:
A condominium association faced a compounded problem when the foam roof of the condominium was extensively damaged by hail. Under the foam roof were popcorn asbestos ceilings in each unit. While the roof was being removed, the asbestos shook loose from the ceilings into each of the units. Air monitoring equipment was immediately employed and the potential asbestos hazard was avoided.
The insurer wanted the insured to simply plug the holes in the roof; but to repair this kind of damage, the roof must be scarified, the process of taking off the first inch or two of foam and reapplying it. Coverage for this damage was found under the debris removal section of the policy.