Vinyl Siding Melts From Reflected Heat From Nearby Windows.

[adjusterjack]

Here's an article about the phenomenon:

Window Reflections Can Melt Vinyl Siding

My first impression is that this kind of thing happens over a period of time due to prolonged exposure and would not be covered by a homeowners policy due to the exclusion for "wear, tear, marring, and deterioration."

I google and found several remarks about insurance not covering it, but no details, and nothing from the insurance industry.

My question to you folks is: Have you had clients who have had this issue and made claims to their homeowners insurance companies and with what conclusion - denied or paid. If denied, why?

It would help my little survey if you could indicate city and state of these incidents.

Thanks.

 

[InsCommentary]

Thermal damage to Vinyl Siding…Covered by an HO Policy?

Author: VU Faculty

Question:
"Our insured has a 2011 ISO HO-3 policy and had a loss to his garage. The insured had white vinyl siding and had it painted a darker color to better match the house. A professional painter put a primer on and then a darker color. A short time later the siding started warping in various places on the garage. An engineer hired by the insurance company is stating that the sun reflecting off a window on the house cause the siding to heat up to the melting point of the siding and that direct sunlight caused damage to other parts of the garage. Apparently a darker color draws more heat. They are denying the claim citing the exclusions "defective, inadequate, faulty or unsound workmanship, etc." and the "wear and tear, deterioration, etc." exclusions. They are also claiming the loss is not sudden and accidental. Your opinion?"

Answer:
First of all, where does the "sudden and accidental" language appear in the policy? (Hint: Nowhere.) The loss sounds fortuitous and unexpected, not a long-term wear and tear type loss that could have been avoided by proper maintenance. Just recently we had a similar question arise from a news story:

Question:
"Take a look at this video about vinyl siding damage. Would homeowners insurance cover these situations? Basically, people’s vinyl siding is melting because their neighbors' energy efficient windows are acting like magnifying glasses and hitting them with intense heat. What are the insurance implications of this situation?"

Answer:
I can’t see anything in the current ISO HO-3 that could reasonably be used to deny a claim by the owner of the damaged house. The closest thing would be if only part of the siding is physically damaged and that’s all the insurer will replace. If the siding is older and the replacement siding creates a “matching” problem, that’s another issue discussed in another VU article.

Likewise, if the owner of the home with the windows is liable for the damage, I’m not aware of any HO liability exclusions that would apply.

The larger issue is correcting the problem. Even if the siding was replaced by the damaged home’s insurer which subrogated against the other home’s insurer, one would think that the same thing would happen to the replacement siding. My guess is that both insurers would probably choose to nonrenew the HO policies. Other insurers, if they are aware of this known loss issue, would decline to write the coverage. This would compel either or both parties to take corrective action.

Here’s some other information I googled, none of it is insurance related:

http://www.wcnc.com/on-tv/Melting-Vinyl-Siding-tied-to-energy-efficient-windows-83583357.html

http://video.yahoo.com/watch/722181/3187928

There is a lot more info, including YouTube videos, going back to at least 2002. With that background, we submitted this issue to the VU faculty and got the following responses:

I saw a local Atlanta TV news report on this exact situation a few weeks ago, and the homeowner alleged that the neighbor's new high-tech windows caused such an intense reflection that it heated vinyl siding to the melting point. As I recall, the siding was cream color and not dark. The neighbor, of course, denied the allegation that her windows caused the problem. I saw no follow up on any insurance action, whether first party or third party.

I think the insurer will likely argue against coverage under "latent defect, marring, etc." However, since the damage occurred over a short period of time (it doesn't have to be "sudden") since the repainting job, I'm not sure those exclusions would hold up in court. For comparison, if a person had installed something vinyl near the fireplace, and the heat caused it to deform over a short period of time, I think open perils would cover that loss.
For the third-party issue, as in the Atlanta example, it seems to me that the neighbor's Section II would apply IF the neighbor is liable - I don't see an exclusion. I think a parallel would be a homeowner who installs a bright light that inadvertently shines onto the roadway and partially blinds motorists.

I think solar panels certainly have this capacity. I've read articles about some of the large solar panel "farms" out West, where they solar panels are aimed at a large tower of water, which the reflected light hits and heats the water. There have been cases of birds being killed who flew into the focused beam, just like killing ants with a magnifying glass.

I am not sure where the negligence would apply for the painter as I would presume the potential after-effects of a darker coating and the peeling may occur. The fact that darker colors will react differently to sunlight is no surprise.

Melting seems like an unexpected condition that resulted from the new siding which begs the question the "quality " of the product installed. That situation may be an easier condition to seek redress from the contractor. Then the question is why didn't the homeowner select the "new" color as part of the siding and pay the difference since the item being replaced was not an "exact" replacement of the damaged siding? That would then have possibly opened the door to the manufacturer and their products.

The next question is how long did this condition take to manifest itself before this condition was presented for review?

There is a good chance the adjuster is correct. My dad was in the siding business and there are many rules about painting siding. Many manufacturers recommend against painting certain siding while others might have specific rules about the process and materials. Did the insured or the painter contact the manufacturer to learn if the siding could be painted safely and if so how it should be done?

This doesn’t sound like a faulty workmanship claim unless there is some no-no about painting siding. It’s also not a wear and tear claim since it happened in a short time period. I don’t see any other exclusions like you often find in commercial or other policies for things like temperature extremes.

I see no Section I or Section II exclusions that would apply to this loss. The first-party HO insurer should pay the claim then, if warranted, subrogate against the neighbor, though that action would likely be fruitless.

Last Updated: October 10, 2014

 

[InsCommentary]

Thermal damage to Vinyl Siding…Covered by a CGL Policy?

Author: VU Faculty

"We insure a painter under a current ISO CGL policy. He painted a light colored vinyl-sided house. He used a brown colored paint. When the sun hit it, the darker color apparently absorbed more heat than normal and the siding has buckled. He checked with the paint store and they told him that they have heard that this might happen. The customer told him what color to paint but did ask the painter if it was OK and the painter told him he'd painted other vinyl through the years and had no problems.
"I have understood that it is being denied for work product reason but do not have a declination letter yet. My question involves the fact that he is painting siding already on the house. He is only applying the paint, not putting up siding. The adjuster apparently said if the buckling caused ensuing damage such as allowing water to come in that damaged sheetrock etc., then it would pay for the additional damage. Do you think the CGL policy excludes this?"

We’ve had three recent questions from different states about a contractor painting existing vinyl siding using a darker color paint. Apparently, direct sunlight causes the darker siding to heat up and warp. In one claim, the adjuster cited CGL exclusions j.(5), j.(6), and l. (“L”) in his claim denial. In the other two claims, only exclusion l. (“L”) was cited. I ran this by some coverage experts and below are their thoughts.

Faculty Response:
If the paint caused the siding to be damaged then there is an ensuing loss – so what is the basis for the denial?

Faculty Response:
I don't think the damage to the siding should be covered. I believe the siding would be considered part of his work. That said, I can make the alternative case. Perhaps a compromise could be reached but that won't constitute a permanent interpretive resolution.

Faculty Response:
Yes, they stated that the work was part of the material that was treated. So they were inseparable. It's like spraying a herbicide by mistake onto a lawn rather than a pesticide...the damage TO the lawn is excluded. Similarly, the damage to the siding is excluded as part of the work product.

Faculty Response:
This is what the policy says [emphasis added]:

j.(5) That particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the "property damage" arises out of those operations; or

j. (6) That particular part of any property that must be restored, repaired or replaced because "your work" was incorrectly performed on it.

Paragraphs (1), (3) and (4) of this exclusion do not apply to "property damage" (other than damage by fire) to premises, including the contents of such premises, rented to you for a period of 7 or fewer consecutive days. A separate limit of insurance applies to Damage To Premises Rented To You as described in Section III – Limits Of Insurance.

Paragraph (2) of this exclusion does not apply if the premises are "your work" and were never occupied, rented or held for rental by you.

Paragraphs (3), (4), (5) and (6) of this exclusion do not apply to liability assumed under a sidetrack agreement.

Paragraph (6) of this exclusion does not apply to "property damage" included in the "products-completed operations hazard".

l. Damage To Your Work
"Property damage" to "your work" arising out of it or any part of it and included in the "products-completed operations hazard".

This exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor.

"Your work":
a. Means:
(1) Work or operations performed by you or on your behalf; and
(2) Materials, parts or equipment furnished in connection with such work or operations.
If the damage had occurred while the work was being done, exclusion j.(5) would clearly exclude the damage. Likewise, j.(6) would probably apply except that the footnote says it doesn’t apply to completed operations claims which is what I believe you have.

That leaves Exclusion L. This exclusion applies if “your work” is damaged by “your work.” So the question is, what is “your work”? Does it only include the paint applied or does it include the real property to which the paint was applied? If the latter, you would think language similar to j.(5) would be used…damage to property “on which” you “performed” operations. With that logic I’d say Exclusion L. does not apply. In addition, since this is a true faulty workmanship exclusion, was the work improperly performed or was their a concurrent cause?

Faculty Response:
This appears to be a completed operations claim which could trigger Exclusion L [emphasis added]:

l. Damage To Your Work
"Property damage" to "your work" arising out of it or any part of it and included in the "products-completed operations hazard".
This exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor.

"Your work":
a. Means:
(1) Work or operations performed by you or on your behalf; and
(2) Materials, parts or equipment furnished in connection with such work or operations.

The question is whether "your work" includes only the paint and labor or does it also include the property on which you performed operations. The definition above includes "Materials, parts or equipment furnished in connection with such work or operations." Do "materials" include only the paint or the "materials" to which the paint is applied?

I have never seen a clear and consistent legal interpretation of this. At best, I think it's ambiguous and should be interpreted in the insured's favor until such time as ISO revises the definition of "your work" to include, like j.(5) and j.(6), an "on which you performed" language. Since the "on which" language appears in j.(5) and j.(6) but is missing from Exclusion L. and the "your work" definition, my interpretation would be that the completed operations exclusion is not intended to apply to the property "on which" you worked.

Faculty Response:
These claims are routinely denied based on general interpretations of CGL exclusion l. There are a couple of VU articles about the wrongful or improper application of chemicals by landscapers and this exclusion is typically cited.

Faculty Response:
The issue is, what constitutes the insured’s work? I believe it’s the paint applied to the siding, so that cost (materials and labor) isn’t covered. However, the subsequent damage to the siding I believe would be covered.

Faculty Response:
For whatever portion of the claim might be represented by the cost of painting, I think exclusion “L” would operate to eliminate coverage, since the paint job is the insured’s work and this looks like a completed operations loss.


Faculty Response:
Liability for damage to the siding would not be reached by any of the cited exclusions, for reasons implied in the first part of my response. Neither j.5. nor j.6. applies to completed operations, and the siding is not the insured’s work.

Last Updated: October 10, 2014

 

[Jeanne310]

I am a homeowner who has had my siding melted by my neighbor's windows. My siding was just fine for 13 years until my neighbors installed new low-e windows. My siding immediately melted. I had an engineer do a study on my home and the results were that the windows become concave under certain conditions and send a focused beam of heat onto my property. My home was heated to over 300 degrees, which melted my siding. Not only is this a problem for my siding, it has created a fire hazard on my property. There are documented cases of fires starting from the windows. You can see some cases in this video here: Energy-efficient windows blamed for starting fires :: WRAL.com. I also have fire reports from various fire departments documenting this. My insurance would pay for installation and parts for new siding, but not labor, because this will continue to happen unless the neighbors correct the problem. My neighbors made a claim to their insurance, but the claim was denied because their insurance felt they aren't doing anything wrong. My only choice right now seems to be litigation. I am in New York.

 

[InsCommentary]

My insurance would pay for installation and parts for new siding, but not labor, because this will continue to happen unless the neighbors correct the problem. My neighbors made a claim to their insurance, but the claim was denied because their insurance felt they aren't doing anything wrong. My only choice right now seems to be litigation. I am in New York.

I don't understand why your policy won't pay for labor. Where is that limitation in the policy language? Your carrier, if they are denying part of the loss, has an obligation to put that denial in writing, citing applicable policy language, and why and how that language applies to exclude that part of the loss.

Most homeowners policies cover "legal liability" for damage to the property of others. Almost certainly your neighbors have liability for what happened and quite possibly the manufacturer and/or installer.

All of this being said, we have no idea who the insurers are and what their policies say. Regardless, don't take anyone's word for any of this. Insist on it in writing. Then, if the claim is not fully covered and the problem is not resolved, seek legal advice.

 

[adjusterjack]

I don't understand why your policy won't pay for labor. Where is that limitation in the policy language? Your carrier, if they are denying part of the loss, has an obligation to put that denial in writing, citing applicable policy language, and why and how that language applies to exclude that part of the loss.

Agree.

Most homeowners policies cover "legal liability" for damage to the property of others. Almost certainly your neighbors have liability for what happened

"Legal liability" involves negligence. I don't see a homeowner being negligent by having Low-E windows installed.

quite possibly the manufacturer

Requires product defect. Is it a product defect that the sun reflects off the window? I have no opinion on that.

or installer

Requires faulty installation. I don't see the installer having liability for installing the product to the manufacturer's specifications.

 

[VolAgent]

Requires product defect. Is it a product defect that the sun reflects off the window? I have no opinion on that.



Requires faulty installation. I don't see the installer having liability for installing the product to the manufacturer's specifications.

As a legal layman, I would say the liability probably lies with one of these two. A window reflecting sunlight in such a way as to damage nearby property is almost certainly a defect.

Now, has the manufacturer put out guidance for installers to avoid situations where damage is more likely? If so, then I would say the installer is negligent.

VW figured out how to make a diesel engine super efficient in using fuel. But it also caused it to violate pollution standards. This seems a rather similar situation here. A manufacturer has designed a product that is great in one area, but causes damages in another.

 

[Jeanne310]

I don't understand why your policy won't pay for labor. Where is that limitation in the policy language? Your carrier, if they are denying part of the loss, has an obligation to put that denial in writing, citing applicable policy language, and why and how that language applies to exclude that part of the loss.

I don't know either. When I started this whole thing I went into the office and spoke directly with an agent. He called the regional office and that was the response that he gave me verbally. I realized I had to get the neighbors to fix their house first anyway, so that was something I was going to deal with in the future.

Most homeowners policies cover "legal liability" for damage to the property of others. Almost certainly your neighbors have liability for what happened and quite possibly the manufacturer and/or installer.

Yes, the neighbors do, however they refuse to take responsibility. This whole thing could have been settled for a few hundred dollars on both sides, but my neighbor told me he "has more important things to worry about."

The manufacturer says the windows are doing what they are designed to do, reflect heat away from the house they are installed on and it's not their problem if it damages my house.

Th installer should have known this would happen, but didn't take any action to stop it.

Then, if the claim is not fully covered and the problem is not resolved, seek legal advice.

Yes, I have an attorney, sadly that's the only route at this point.

I am trying to get the word out about how dangerous these windows are, you will be seeing many more claims as people install them in their homes.

 

[Jeanne310]

A manufacturer has designed a product that is great in one area, but causes damages in another.

Yes, exactly, but it's all the manufacturers of these windows.

 

[VolAgent]

Yes, exactly, but it's all the manufacturers of these windows.

Don't lose sight of the forest for the trees.

Again, I'm not an attorney. But I don't see how a manufacturer has the right to develop a product that intentionally damages the property of others. Nor do I see how your neighbor has the right to intentionally damage your property.

You need to fix the problem with your neighbor first. Even if you can get the insurance company to repair it, they are only going to repair it so many times before they refuse to renew your policy or insist on an exclusion for this.