Tech Talk: Ice Dams and Roof Collapse…Covered or Not?

by Irene Morrill, CPCU, CIC, ARM, CRM, CRIS, MLIS, LIA, CPIW
VP Technical Affairs, MAIA

I am so over the snow, especially heavy, wet snow. Just think, soon April showers will bring May flowers… and flooding. (So, don’t forget MAIA’s Number One Insurance Agency can help with NFIP, Private and Excess flood. Check out Number One’s Flood Concierge Program or Flood Insurance webpage.)

Now, back to snow, ice dams, and roof collapses. This TechTalk focuses on personal lines. We’ll discuss commercial lines at a future date.

What is An Ice Dam?

Ice Dam Diagram

As the name suggests, an ice dam is a dam made of ice. Ice dams occur along the edge of a roof line when heavy snow buildup on the roof melts during the day, then refreezes when temperatures drop overnight. An ice dam forms, preventing the water from finding its way to the gutters and downspouts. Instead, it hits the ice and becomes… even more ice. Sometimes the water backs up behind the dam and leaks into the building, causing damage to walls, ceilings, insulation, and other areas. In cases where the ice dam goes unnoticed for an extended period of time, it can do significant damage to the building and contents.

HO & DP POLICIES: ICE DAM LOSSES - BUILDING - PERSONAL LINES

Ice dam is a "special form" peril, which means the loss is covered as long as it is NOT excluded. If one has the ISO HO-3 or the ISO DP-3, then the ice dam loss to the building IS covered because there is no exclusion, and the only two freezing exclusions found in the special form policy would NOT apply. The following is from the HO-2000/2011, but the HO-91 wording is essentially the same and, so too, the DP-3 form editions.

The exclusion regarding freezing of plumbing has no bearing of what is going on here. The other freezing exclusion, which does mention freezing and thawing, does NOT apply to things happening on the roof or top of the structure; it only applies to items in the ground, on the ground, or in the water.

(2) Freezing, thawing, pressure or weight of water or ice, whether driven by wind or not, to a:

(a) Fence, pavement, patio or swimming pool;

(b) Footing, foundation, bulkhead, wall, or any other structure or device that supports all or part of a building, or other structure;

(d) Pier, wharf or dock;

So, as the HO-3 states, if it ain't excluded, it’s covered!

Under 2.b. and c. above, any ensuing loss to property described in Coverages A and B not precluded by any other provision in this policy is covered.

But the special form in personal lines is ONLY special in regards to building. Open perils or "covered unless excluded" ONLY applies to the dwelling and other structures in the HO-3 or DP-3. The special form DP-3 and HO-3 covers all that is not excluded.

The language below applies to the HO-2000 program, but the HO-91/HO-2011 and DP forms and editions are similar:

SECTION I – PERILS INSURED AGAINST

A. Coverage A – Dwelling and Coverage B – Other Structures

1. We insure against risk of direct physical loss to property described in Coverages A and B.

2. We do not insure, however, for loss:

a. Excluded under Section I – Exclusions;

b. Involving collapse, except as provided in E.8. Collapse under Section I – Property Coverages; or

c. Caused by:

.......

Ice Dam and Contents Losses

If the ice dam situation is BAD enough, then contents in storage or in closets can also be damaged. Uh-oh! The HO-3 and DP-3 only provide NAMED perils coverage for contents. The following is from the ISO HO-2000/2011, but the ISO HO-91 and DP forms language is similar. The peril must be listed, in order for contents to be covered. Weight of ice and snow is NOT ice dam! Nice try, but no cigar!

B. Coverage C – Personal Property

We insure for direct physical loss to the property described in Coverage C caused by any of the following perils unless the loss is excluded in Section I – Exclusions.

….

11. Weight Of Ice, Snow Or Sleet
This peril means weight of ice, snow or sleet which causes damage to property contained in a building.

Weight does NOT cause the loss in an ice dam situation. It is the thawing and freezing, and the leakage of thawed snow into the home, that causes the loss. Weight has nothing to do with it!

You need open perils for contents to cover ice dam losses. Under the HO-91 program you must add the HO 00 15 Special Personal Property Coverage Endorsement to the HO-3. Under the HO-2000/2011 program you would sell the HO-5 Comprehensive policy. In both cases, contents would then be covered unless excluded, and the language is as stated above; so, an ice dam claim to contents would be covered!

If one is a tenant and has an HO-4 under the HO-200/2011 program, one can add the HO05 24 Special Personal Property endorsement for "open perils."

What About the Personal Condo Unit?

As I am writing this, I just got an email regarding ice dam in a condo unit. Who pays??? My response was, “What does the insurance section of the bylaws state?” Whether the interior building loss must be paid under the Association Master policy or the individual unit owner HO-6 policy will depend on how the insurance section of the association bylaws read. Is the association responsible for insuring the insides of the individual condo unit? If so, that's a topic for the future when we discuss how the commercial policy addresses ice dam or collapse.

If the association is NOT responsible for insuring the individual unit for ice dam loss, then the unit owner needs the HO 17 32 Unit Owner Coverage A Special Form endorsement for ice dam loss to building items. The unit owner needs HO 17 31 Unit Owner Coverage C Special Form endorsement for ice dam loss to contents. Remember the ISO HO-6 – whether HO-91, HO-2000/2011 – is a broad form NAMED peril policy. Ice dam is NOT a broad form peril, it is an “open perils” policy claim.

What if the master policy is SUPPOSED to cover the individual unit owner building loss, BUT has taken a large deductible. That discussion is actually MUCH too long for THIS article. If you’re interested, email me and ask for a copy of our older TechTalk on Personal Condo Policy vs. Master Policy Deductible.

Ice Dam and Contents Under the DP Policy

There is NO endorsement to make contents "open perils" under the ISO DP form. Contents will ALWAYS be named perils. But is this really an issue since most DP forms are for tenant-occupied structures and don't involve contents owned by the building owner.

Collapse and the ISO HO and DP Policies

Collapse is an "Additional Coverage." It was taken out of "perildom" years ago, and included in the additional or other coverage section of the policy so that the "all risk" nature of Special Form wouldn't require coverage when none was intended.

Whether the ISO HO-91, HO-2000, HO-2011 or DP 1988, 2002 or 2014, the language is similar and first requires that there be a "caving in" or falling down of some part, if not all, of the building. (We are talking about a building collapse, not collapse of a piece of furniture.) This additional or other coverage will ONLY be found in a special form or broad form peril policy. The basic form DP does NOT provide collapse.

HO-2000 reads (HO-91/HO-2011 and all DP forms are similar):

8. Collapse

a. With respect to this Additional Coverage:

(1) Collapse means an abrupt falling down or caving in of a building or any part of a building with the result that the building or part of the building cannot be occupied for its current intended purpose.

....

Next, we discuss the situations where this will be covered. It is essentially a "named peril" coverage within the DP-2 or 3 or ISO HO policy. Collapse is only covered for certain listed situations. The first situation is:

b. We insure for direct physical loss to covered property involving collapse of a building or any part of a building if the collapse was caused by one or more of the following:

(1) The Perils Insured Against named under Coverage C;

There are other reasons why coverage will respond to a building or piece of a building collapse, but since this article is essentially concerned with winter and weight of ice and snow, please refer to the policy for the remaining language.

For the DP-3 or the HO-3 policy one of the contents named perils includes "weight of ice and snow" as discussed above, so collapse due to too much snow IS covered! (I would insert the little dancing baby here but the communications department would kill me!)

So, in personal lines, the collapse of roofs is covered due to weight of ice and snow. Good news! The damage to the contents resulting from the collapsed roof would ALSO be covered, because that IS a named peril under the DP-2 and 3 or HO-2 and 3.

HO-2000/2011 language but HO-91 and DP2 and 3 similar:

11. Weight Of Ice, Snow Or Sleet
This peril means weight of ice, snow or sleet which causes damage to property contained in a building.

Collapse and the Personal Condo Owner

If there is collapse damage to the unit, is the condo association responsible for insuring the interior of the individual unit or is the unit owner? One must read the bylaws. If the Master policy is responsible, that’s a commercial discussion. If the unit owner is responsible for damage to his/her unit, then the unendorsed HO-6 is sufficient, as the additional coverage collapse is automatically provided in the HO-6 form as it was in the HO-3, as discussed above.

Collapse is a "named peril" additional coverage as written by ISO in all HO forms.

Personal Lines Loss Payment

Under the HO forms (HO-91, HO-2000, HO-2011) contents is always on an ACV basis unless the HO 04 90 Personal Property Replacement Cost endorsement has been added. In my opinion, this endorsement should be added to EVERY HO client whether a tenant, unit owner, or homeowner!

DP policies only provide ACV loss payment on contents. There is no replacement cost endorsement for contents. But, as discussed above, generally the DP form is used for tenant-occupied structures and there is usually little to no contents in the rental units.

Building losses on either the DP or HO policy SHOULD be on a replacement cost basis if we have been diligent insurance agents. Regardless of the edition of the DP-2,3 or HO-3,5, these policies cover building losses on a replacement cost basis IF the building limit is at least 80% of the building replacement value. If the limit of insurance is LESS than 80% of the building replacement value, then the "underinsurance penalty" will apply.

Personal Lines Loss of Use or Loss of Rental Income

Coverage D Loss of Use is "automatic" under the ISO HO forms. The percentage of coverage available depends on both the coverage form and coverage edition. The Loss of Use limit of insurance is in addition to the building or contents limit. Loss of rental income is also included in Coverage D. If the loss is covered, there will be a certain amount of loss of use coverage available.

The DP-2 and 3 provide an automatic limit of insurance under the Other Coverages section for loss of use and/or loss of rental income. Like the HO form, if the loss is covered, then the corresponding loss of use/loss of rental income will be covered. Under the DP-2 and 3, this Other Coverage is in addition to the Coverage A building limit.

RECAP

Weight of ice and snow causing roof collapse is covered under personal lines policies if broad form or special form perils. Ice dam is ONLY covered under special form perils.

Watch for a future Tech Talk on Ice Dams and Roof Collapse for Commercial Lines.

Please remember that part of MAIA service is answering questions and providing information. Please feel free to email me when you have a coverage question, problem or issue. Perhaps I can help – at imorrill@massagent.com

This article has been developed expressly for the members of MAIA. Reprint by other than members without the express permissions of the author is not permitted.