Association hail and wind claims, explained for boards and managers

Master policy basics

Most associations carry a master property policy covering the buildings or common elements the association is responsible for. Roofs are usually on that list, but your declarations decide. Some documents make the association responsible for the whole structure; others leave parts of it to individual owners and their own policies.

Before a storm, pull the declarations page and the policy and look for:

• The wind and hail deductible, and whether it's a flat amount or a percentage.
• How roofs are valued: replacement cost or actual cash value. Some policies use a roof payment schedule based on age.
• Exclusions such as cosmetic damage to metal roofing or limits on roof surfacing.
• Ordinance or law coverage for code-required upgrades, and its limit.
• Notice and deadline requirements: how soon you must report a loss and how long you have to complete repairs and claim the rest of the payment.

Percentage deductibles

Many association master policies in Colorado carry a wind and hail deductible stated as a percentage of insured value instead of a flat dollar amount. The math adds up quickly. As an illustration only, a 2% deductible on a building insured for $2 million is $40,000, and if the deductible applies per building, a community with many buildings can face a very large total.

Read carefully whether the deductible applies per building, per location or per occurrence, and whether there's a minimum. Then look at your declarations: they usually say how the association pays a deductible, whether from reserves, operating funds or an assessment to owners. Some associations set aside a deductible fund for exactly this reason.

Documenting damage across many buildings

One roof is a photo set. Forty roofs is a filing system. Good documentation is what turns an adjuster's partial estimate into a complete one:

• Date the storm. Note the date and time. National Weather Service storm reports and local hail reports help confirm it.
• Number the buildings on a site map and use those numbers on every photo, note and estimate.
• Photograph each roof: overview shots, close-ups of hits on the membrane, panels or shingles, and test areas where damage is counted.
• Record soft metals and collateral damage: dented vents, gutters, downspouts, flashing, rooftop equipment fins, siding and window wraps. These help show hail size and direction.
• Check low-slope roofs for hidden damage. Hail can crush insulation or fracture membranes without obvious surface marks. Core samples and an infrared survey can show what photos can't.
• Log interior leaks by unit and date as residents report them.
• Make temporary repairs to prevent further damage, and keep the invoices and photos. Most policies expect you to protect the property.

Our post-storm reports are organized by building number, so the board, the manager and the adjuster are all looking at the same thing.

Meeting the adjuster

On a large loss, the insurer may send a field adjuster, an independent adjuster, an engineer or all three. Ask for the inspection to cover every building, and have someone there who knows the roofs.

• Bring the site map and the photo report.
• Walk the roofs together. Point out soft metal damage, test areas and any core samples.
• Note where you and the adjuster disagree, and ask how the insurer will resolve it.
• Ask for the estimate in writing, by building, with line items.
• Keep one point of contact for the association, usually the manager, so communication doesn't fork.

We attend adjuster meetings at the association's request to explain the roof's construction and the damage we documented. Decisions about coverage stay between the association and its insurer.

Scope and supplements

The insurer's first estimate often misses items, especially on commercial and multi-building claims. Common gaps include gutters and downspouts, edge metal, flashings, rooftop equipment that must be lifted, insulation, permit costs and code-required work. When that happens, the next step is a supplement: a documented request to add items, with photos, measurements and the reason each item is needed.

Some conditions only show up once the old roof is off, such as damaged decking or wet insulation. Those are documented as the work happens and submitted as supplements, which is another reason the contract should carry unit prices for hidden conditions.

RCV, ACV and recoverable depreciation

On a replacement cost policy, payments usually come in stages:

If the policy is written on an actual cash value basis, depreciation may not be recoverable at all. Watch the deadlines: many policies require the work to be completed within a set period to recover depreciation. For phased projects, ask the insurer whether depreciation can be released building by building as each one is finished.

Code upgrades and ordinance or law coverage

Replacing a roof today means meeting today's building codes, not the codes in force when the community was built. On low-slope roofs, energy codes commonly require insulation to be brought up to current levels. Other code items can include edge metal, underlayment and ice barrier details, deck repairs and drainage.

A standard policy may not pay for these upgrades. Ordinance or law coverage is the part that does, up to its limit. Find out whether your master policy has it, and how much, before a storm. Permit requirements and adopted codes differ among Denver, Aurora, Centennial and other Front Range jurisdictions, and we document the specific code items for each building's permit.

Scheduling around payments

Claim money arrives in pieces, and the work has to be financed in between. Plan the schedule with the board's cash position in mind:

• Expect the first payment to be ACV less the deductible. The association covers the deductible from its own funds.
• Sequence buildings so completed phases can release depreciation for the next ones, where the policy allows.
• Ask us to invoice by building, matching the insurer's estimate, so each release is easy to document.
• Build in material lead times and the busy season after a major hail event.
• If a lender is named on the policy, its endorsement may be needed on claim checks; allow time for it.

Communicating with residents

Owners hear about the hailstorm the same day. They hear about the claim only if the board tells them. Short, regular updates prevent a lot of anxious email:

• Confirm the board is handling the roof claim, and ask owners not to sign with door-to-door roofers for association-maintained roofs.
• Explain how owners should report interior leaks and when to contact their own insurance for items inside the unit.
• Share the expected sequence once the claim is approved, with notices before work on each building.
• Explain the deductible and how it will be paid, as your documents provide.

Colorado rules that protect the association

Colorado's roofing contractor law gives property owners specific protections. In general terms:

• Roofers may not pay, waive or rebate any part of an insurance deductible.
• Roofing work for the association should be under a written contract that spells out the scope, the price and the cancellation rights.
• A property owner can cancel a roofing contract within 72 hours after an insurance claim is denied in whole or in part.
• Roofers may not claim to be or act as a public adjuster. A roofer under contract can discuss the repair scope with the insurer; negotiating the claim is a separate, licensed role.

We use a written contract on every association project, follow these rules on every claim, and don't collect final payment until the association signs off. For more on the first days after a storm, see after a hailstorm.

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