• Game, Set, Match: The Pennsylvania Superior Court Clarifies Whether an Insurance Company Owes "To Match"
  • December 21, 2009 | Author: James H. Cole
  • Law Firm: Marshall, Dennehey, Warner, Coleman & Goggin - Doylestown Office
  • On November 20, 2007, the Pennsylvania Superior Court handed down a decision clarifying whether an insurance company owes "to match" in Pennsylvania. This "matching" issue fuels most property damage litigation in Pennsylvania, forms the cornerstone of many overblown public adjuster's estimates, and is a constant source of headaches for property claims representatives and managers. 

    Greene v. United Service Automobile Association, 2007 Pa. Super. 344 involves a typical situation where several shingles on the slope of an 18-year-old roof were allegedly damaged by wind. In Greene, the insured demanded $18,887 for an entire new roof. The insurance company, United Services Automobile Association (USAA), agreed to only pay for the damaged slope and prepared an estimate in the amount of $1,908.37. Litigation ensued.

    The trial court entered judgment in favor of the plaintiff in the amount of $1,908.37, the amount of USAA's estimate. The plaintiff appealed to the Superior Court.

    The plaintiff framed the relevant issue as follows:

    Whether an insured is entitled to have its [sic] roof replaced when part of the roof is damaged as a result of a covered loss when matching shingles cannot be obtained, and a homeowner's insurance policy provides for 'replacement of that part of the building damaged' and for 'like construction and use.'

    The court cited USAA's policy language, which is typical in the industry, and determined that language to be clear and unambiguous. The language is as follows:

    If, at the time of the loss, the amount of the insurance in this policy on the damaged building is 80% or more of the full replacement cost of the building immediately before the loss, we will pay the cost to repair or replace, after application of the deductible and without deduction for depreciation, but not more than the least of the following amounts:

    (1) the limit of liability under this policy that applies to the building;

    (2) the replacement cost of that part of the building damages; or

    (3) the necessary amount actually spent to repair or replace the damaged building. The replacement cost will not exceed that necessary for the like construction and use on the same premises; regardless of whether the replacement building is located on the same or different premises.

    The court pointed out that the insured contended that the policy language required USAA to pay for the cost of replacing their entire roof because the roof was the "part of the building damaged." The court in no uncertain terms found this interpretation "unreasonable and absurd." The court found that "at most, the 'part of the building damaged' [would be] one slope of [the insured's] multi-sloped roof."

    The Superior Court accepted the trial court's observation as to the absurdity of the insured's position as follows:

    To utilize [the insured's] logic would necessitate replacing all siding when one piece of siding is damaged, or an entire door when a doorknob is damaged. It defies common sense.

    Id. at 11 quoting the Trial Court Opinion, 2/23/07, at 8.

    The plaintiffs also argued that the policy's "like construction" language necessitated complete replacement. To this argument the court responded that, although the "exact shingles" were no longer available, shingles of "similar color and texture [were available] and could have been used to repair [the damaged slope] ...." The court found that there was compliance with the policy's "like construction" language as the replacement shingles "were similar to the damaged shingles, in function, color and shape."

    At this juncture, Greene is authoritative relative to policies containing the "part of the building damaged" language and is certainly at least persuasive relative to other policy language. It should be noted that the court's decision illustrates a claim situation where an insured took an unreasonable position. The perceived reasonableness of a party's position in such cases is often what sways a trier of fact. Because every claim situation is different, every claim must be analyzed on its merits. The Greene decision will be most useful when the proposed repair can be objectively analyzed for its reasonableness. Thus, if a repair is allowed versus full replacement, the repair should be evaluated based in part on whether the proposed repair is at least similar to the unrepaired area in function, color and shape. This is true whether the repair be to roofing, siding, carpet, tile or paint. In many circumstances, it will be necessary to consult with the repair contractor, or building supply houses, in order to support the reasonableness of that recommended repair.

    The Superior Court's opinion in Greene should help guide insurers in making appropriate and fair claims decisions relative to the often litigated issue of whether an insurer owes "to match."