A federal court docket determination from Minnesota offers a sobering have a look at how beauty injury exclusions could also be interpreted in hail-damage circumstances involving metallic roofs. The case, Cannon Falls Space Colleges, ISD 252 v. The Hanover American Insurance coverage Firm, 1 concerned a dispute over whether or not widespread hail dents to metallic faculty roofs constituted lined injury or had been excluded as merely beauty. I wish to give a shout-out to Steve Badger for bringing this case to my consideration.
The details had been largely undisputed. A hailstorm struck the Cannon Falls Elementary College and Excessive College in April of 2022. Each buildings had metallic roofs, and the storm brought on widespread indentations throughout the roof panels. There have been no punctures, no disengaged seams, and no leaks, both instantly after the storm or within the three years that adopted. Hanover paid for different hail-related injury to the properties however denied protection for the roofs based mostly on a beauty injury exclusion contained within the coverage.
The exclusion at challenge acknowledged:
We is not going to pay for beauty injury to roof surfacing brought on by wind and/or hail. For the aim of this endorsement, beauty injury implies that the wind and/or hail brought on marring, pitting or different superficial injury that altered the looks of the roof surfacing, however such injury doesn’t stop the roof from persevering with to perform as a barrier to entrance of the weather to the identical extent because it did earlier than the beauty injury occurred.
The college district argued that whereas the roofs weren’t leaking, the hail dents instantly weakened the metallic panels. Their professional testified that dented metallic has already used up a part of its plastic pressure capability, making it extra inclined to rupture from future hail, wind hundreds, or snow hundreds. In line with the district, a roof that’s now weaker and extra prone to fail below future climate occasions doesn’t perform as a barrier to the weather to the identical extent because it did earlier than the hailstorm. The district emphasised that the coverage doesn’t restrict “the weather” to rainwater alone, and that hail, wind, and snow are plainly parts the roof should resist. In addition they identified that Hanover bore the burden of proving the exclusion utilized and had finished no testing to ascertain that the roof’s efficiency was unchanged.
Hanover framed the case very in a different way. It argued that the exclusion is obvious and unambiguous and focuses on current efficiency, not future threat. Hanover’s place was that if the roof didn’t enable the weather contained in the constructing earlier than the hailstorm and doesn’t enable the weather inside after the hailstorm, then it continues to perform as a barrier to the identical extent. Hanover argued that elevated susceptibility, decreased service life, or theoretical future failure are irrelevant below the plain language of the exclusion. In Hanover’s view, dents that alter look however don’t trigger leaks or breaches are precisely what this beauty injury exclusion was designed to take away from protection.
Decide Katherine Menendez agreed with Hanover and granted abstract judgment in its favor. The court docket held that the beauty injury exclusion was unambiguous and that its focus is on whether or not the roof at present capabilities as a barrier to the weather, not whether or not it could be extra prone to fail at some unknown level sooner or later. The court docket emphasised that the coverage asks whether or not the injury “doesn’t stop the roof from persevering with to perform as a barrier,” and that this language is written within the current tense. The phrase “to the identical extent because it did earlier than” was not learn to require an engineering comparability of power, security margins, or remaining service life. As a substitute, the court docket handled it as a useful inquiry: ‘Does the roof nonetheless maintain the weather out or not?’
The court docket was specific that, even when the college district’s professional testimony had been accepted as true, the outcome wouldn’t change. The roofs had not leaked, had not allowed any incursion of the weather, and continued to carry out their fundamental perform as that they had earlier than the storm. Due to that, no cheap jury may discover that the hail injury prevented the roofs from functioning as obstacles to the weather to the identical extent as earlier than. Importantly, the court docket denied Hanover’s movement to exclude the policyholder’s professional as moot, making clear that the ruling was based mostly on coverage interpretation quite than a rejection of the professional’s credibility.
In reaching its determination, the court docket relied on comparable rulings from different jurisdictions decoding almost equivalent beauty injury exclusions, together with circumstances holding that dents which can shorten a roof’s lifespan or enhance the danger of future failure are nonetheless excluded as long as the roof presently retains the weather out. The court docket predicted that the Minnesota Supreme Courtroom would undertake the identical interpretation. The docket indicated that the ruling is being appealed.
This case is a reminder that beauty injury exclusions usually are not window dressing. When written this fashion, courts are more and more prepared to implement them precisely as written, even the place there’s credible proof of structural weakening. The excellence drawn by the court docket will not be between robust roofs and weak roofs, however between roofs that at present fail and roofs that haven’t but failed. For policyholders, that could be a harsh line. It shifts the true battle to coverage language, underwriting, and renewal negotiations lengthy earlier than the hail ever falls.
Steve Badger was proper to flag this determination. Whether or not you agree with it or not, it’s a clear sign of the place many courts appear headed. Ignoring it will be a mistake.
Thought For The Day
“A phrase will not be a crystal, clear and unchanged; it’s the pores and skin of a dwelling thought and should range drastically in colour and content material in line with the circumstances.”
— Oliver Wendell Holmes Jr.
1 Cannon Falls Space Colleges, ISD 252 v. The Hanover American Ins. Co., No. 24-cv-3383, 2025 WL 2976533 (D. Minn. Oct. 21, 2025). (See, Cannon Falls Movement for Abstract Judgment, Hanover Movement for Abstract Judgment, and Cannon Falls Response to Movement for Abstract Judgment).