130.6-5

WINDSTORM OR HAIL–A DISCUSSION

(December 2008)

INTRODUCTION

All commercial and personal lines insurance coverage forms and policies provide windstorm and hail coverage. As with fire and explosion, these forms and policies do not define the terms. As a result, dictionary definitions and court precedents must be used to determine losses that are covered and those that are not. The Insurance Services Office (ISO) forms CP 10 10–Causes Of Loss–Basic Form and CP 10 20–Causes Of Loss–Broad Form provide coverage for windstorm and hail but exclude loss or damage caused by or resulting from:

Frost
Cold weather
Ice, snow or sleet

Note: This does not include hail.

Interior damage to buildings or structures or personal property located inside a building or structure caused by rain, snow, sand or dust, unless these damaging elements enter the interior through breaches or openings made in the roof or walls

The last two exclusions specifically state that the exclusion applies regardless of whether the element was wind-driven or not.

CP 10 30–Causes Of Loss–Special Form approaches things a bit differently. It does not specifically list windstorm or hail as covered but coverage applies because neither is excluded. However, it excludes loss or damage caused by rain, snow, ice or sleet or damage to personal property in the open. It also limits damage to the interior of the building or structure and to personal property within from ice, rain, sleet, sand or dust to apply only if the building is first breached or damaged by a covered cause of loss allowing the elements to enter. The limitation states that coverage does not apply unless the building or structure is first breached or damaged, even if the elements are wind-driven.

Please refer to PF&M Section 131_C020, "Opening" In Roof As Condition Of Interior Damage Coverage Examined, in Court Cases, for an example of how a court viewed the breach requirement. Please refer to PF&M Section 470_C005, Storm Damage Held Not Covered By Virtue Of Ice, Snow Or Sleet Exclusion, in Court Cases, for a view at this matter through the lens of the courtroom.

DEFINITIONS

Several terms must be defined to better understand the coverages provided. Each is the dictionary definition or as defined in scientific or research articles and papers. None of these terms is defined in Black's Law Dictionary.

Rain is defined by the American Heritage Science Dictionary as water that condenses from water vapor in the atmosphere that falls to Earth as separate drops from clouds.
Wind is defined by the American Heritage College Dictionary as moving air, especially a natural and perceptible movement of air parallel to or along the ground. The American Heritage Science Dictionary defines wind as a current of air, especially a natural one that moves along or parallel to the ground, moving from an area of high pressure to an area of low pressure.
Windstorm is defined by the American Heritage College Dictionary as a storm with high winds or violent gusts but with little or no rain.
Hail is defined by the America Heritage College Dictionary as precipitation in the form of spherical or irregular pellets of ice larger than 5 millimeters (0.2 inches) in diameter.

WINDSTORM

Wind and windstorm are different causes of loss. Consider the following loss examples:

The light breeze that blows through the house from the front to the back often causes the front door to slam, resulting in cracked window frames and panes.
A storm door left ajar slams constantly against the outside wall of the house, causing a crack to develop in the outside wall.
A lamp is blown over by a strong blast of wind that enters the home through a mesh screen door.

These losses are caused by wind. Because the loss or damage is not a direct result of windstorm, insurance coverage does not apply.

Windstorm refers only to the wind, not the rain and water that may accompany it. This very important distinction is frequently made following a hurricane. Hurricanes and tornados are not defined in any insurance coverage, even though both terms contribute to the lively discussion of what is covered. Windstorm damage is limited to the damage caused by the wind. Damage caused by water that may accompany the windstorm is not covered as windstorm. In addition, sand driven by wind is also excluded.

Examples:

Siding ripped from the side of a house is covered because the wind caused the siding to rip.
Sand driven through gaps in the windows, doors and siding by the wind is not covered because the wind did not damage the structure. The sand did the damage.
A wind driven wave surge floods a building. This is the major point of dispute following a hurricane. What damage was caused by wind and what damage was caused by flood?

HAIL

Hail falls along paths scientists call hail swaths. Their size can vary from a few acres to up to 10 miles wide and 100 miles long and leave piles of hail that must be removed with a snowplow or a bulldozer. Hail also causes significant damage to crops in the United States every year, running into the hundreds of millions of dollars. Farmers cope with the hail hazard by purchasing insurance and Illinois farmers lead the country in crop-hail insurance, paying premiums in excess of $600,000,000 annually. However, hail in the United States is most prevalent in the area known as "Hail Alley," consisting of the states of Colorado, Nebraska and Wyoming. Parts of this region average between seven and nine hail days per year. Hail is also much more common along mountain ranges because mountains force horizontal winds upwards. This intensifies the updrafts within thunderstorms and makes hail more likely.

WINDSTORM EXCLUSIONS AND DEDUCTIBLES

Because of the concern about potential hurricane damage, many insurance companies issue policies excluding windstorm or make the coverage subject to significant deductibles.

Properties subject to windstorm exclusions may be eligible for coverage in a Beach FAIR Plan. Plans are available in Alabama, Florida, Louisiana, Mississippi, North Carolina, South Carolina and Texas. They cover virtually all real and personal property in the designated beach area. There are variations in the matter of eligible property among the various states. Each state has a maximum limit per structure but the limits change on a regular basis. It is important to investigate the plans in each state to determine the cap. Note that these plans are not a substitute for the coverage provided under the National Flood Insurance Program (NFIP). Please refer to PF&M Section 490.1, Overview Of The National Flood Insurance Program, for more information on the federal flood program.

When a separate windstorm deductible is used, it is normally a percentage deductible based on the limit of insurance, not the value of the loss. Most windstorm deductible endorsements are state specific and should be read carefully and explained to the insured thoroughly because of the manner in which they are applied.

Example: Michelle owns a large apartment building and insures if for $3,000,000. She has a $1,000 deductible on all causes of loss except windstorm, which is subject to a 5% deductible. A windstorm causes $50,000 in damage to her building. She expects to receive $50,000 - $2,500 ($50,000 X .05) or $47,500 for her claim. She is very surprised and extremely disappointed when informed that her deductible is actually $150,000 ($3,000,000 X .05) and that she will receive nothing for her $50,000 loss.

Note: These same exclusions and deductible forms can be used in areas of the Midwest where hail may be a major concern.

CONCLUSION

When does wind become a windstorm? Was there really hail damage or was it an existing condition? The observation of damage is the only determining factor and damage, unfortunately, is in the “eye of the beholder.” The claims adjustor and the insured may have differences of opinion that can only be resolved in an impartial court of law. Because scientific evidence is important to any argument, three different wind scales are presented in the following pages that may be cited to justify either side of the argument.

BEAUFORT WIND SCALE

British Rear-Admiral Sir Francis Beaufort developed this scale in 1805, based on his observations of the effects of wind. He was a British hydrographer, a scientist who studies surface waters, especially with regard to navigating them. This is the earliest formal wind scale. It provides the standards of wind velocity measurements used by mariners and by the United States Weather Bureau, with some modifications made for terminology. These meteorological standards are helpful for clarifying the meaning of "windstorm" for insurance purposes. This wind scale differs from the others in that it measures straight-line wind forces as opposed to the effects of rotating winds.

The speed at which a current of air moves and its direction determine whether it is harmful or beneficial. A wind current of 19 to 24 miles an hour is classified as a fresh breeze and is not harmful. When wind reaches a speed of 48 miles an hour, it is classified as a strong gale, and may cause some damage to fruit crops. At 64 to 75 miles per hour, wind is classified as a windstorm and is dangerous to both crops and property. Hurricanes and tornadoes involve winds in excess of 75 miles per hour. The Beaufort Wind Scale, based on the effect of wind on ships, and adopted in substance by the United States Weather Bureau, appears below.

Beaufort Wind Scale
Scale	Wind Description Wave Height in feet	Speed (mph)	Speed (knots)	Effects on land or sea
0	Calm None	0–1	0–1	Smoke rises vertically. Sea is like a mirror.
1	Light air 0.25	1–3	1–3	Smoke drifts slowly. Ripples on the water appear as scales.
2	Light breeze 0.5–1.0	4–7	4–6	Leaves rustle. Small wavelets. Crests appear glassy.
3	Gentle breeze 2.0–3.0	8–12	7–10	Leaves and twigs move. Large wavelets. Crests break. Scattered whitecaps.
4	Moderate breeze 3.5–5.0	13–18	11–16	Small branches move. Small waves become longer. Numerous whitecaps.
5	Fresh breeze 6.0–8.0	19–24	17–21	Small trees sway. Moderate waves. Many whitecaps. Spray
6	Strong breeze 9.5–13.0	25–31	22–27	Large branches sway. Larger waves. Whitecaps. Spray.
7	Moderate (near) gale 13.5–19.0	32–38	28–33	Whole trees move. Sea heaps up. White foam from waves.
8	Gale 18.0–25.0	39–46	34–40	Twigs break off trees. Medium high and long waves.
9	Strong gale 23.0–32.0	47–54	41–47	Branches break. High waves. Sea rolls. Foam. Low visibility.
10	Whole gale/storm 29.0–41.0	55–63	48–55	Trees snap and blow down. High waves and overhanging crests. Heavy rolling.
11	Violent storm 37.0–52.0	64–75	56–63	Widespread damage. Exceptionally high waves.
12	Hurricane 45.0 and over	Over 75	Over 64	Extreme damage. Air filled with foam. Sea completely white with driving spray.

ENHANCED FUJITA SCALE (EF SCALE)

This scale was introduced to the public in 2007. The previous scale was introduced in 1971 prior to many of the more advanced meteorological measuring devices. This new table, while still dependent on observations at the scene of the tornadic impact, more accurately estimates a tornado's speed. Tornadoes may develop a swirling, counterclockwise movement exceeding 100 miles per hour that causes incredible destruction. Tornadoes most often occur in the central Mississippi Valley region of the United States. It is important to note that neither the size of the funnel nor the length of time it remains on the ground have any effect on the scale.

Enhanced Fujita Scale (EF Scale)
Scale	Description	Speed	Effects
EF0	Light damage	65-85 mph	Some roof, gutter and siding damage. Limited amount of branches broken from trees and some shallow rooted trees pushed over.
EF1	Moderate damage	86-110 mph	Severe roof damage; overturned and badly damaged mobile homes; Exterior doors and windows lost and glass broken.
EF2	Considerable damage	111–135 mph	Roofs torn off; home foundations shifted; complete destruction of mobile homes; uprooting or breaking of large trees; small or light objects turned into missiles; winds lift cars off the ground.
EF3	Severe damage	136–165 mph	Destruction of the upper levels of well constructed homes; large buildings such as shopping malls severely damaged; debarking of trees; overturning of trains; wind lifts and throws heavy cars; any structure without a substantial foundation blown a distance away.
EF4	Devastating damage	166–200 mph	Leveling of well-constructed houses; cars thrown and small missiles generated.
EF5	Incredible damage	Over 200 mph	Well-constructed houses pulled off foundations and swept away; heavy items such as automobiles become missiles; significant damage to steel reinforced concrete structures; structural damage to high-rise buildings.

SAFFIR-SIMPSON WIND SCALE

The Saffir-Simpson wind scale places a hurricane in one of five categories according to its strength. It was created in the early 1970s. Category one is the weakest hurricane strength measured and category five is the strongest measured. A hurricane's strength is based on how fast its winds blow. The height of the storm surge depends on the slope of the continental shelf connected to the area where the storm strikes. Wind speeds below 74 miles per hour are measured according to the Beaufort Wind Scale. This scale rates the severity of a hurricane based on its barometric pressure, wind speed, storm surge and damage potential.

Saffir-Simpson Wind Scale
Scale	Barometric Pressure	Wind Speed	Storm Surge	Damage	Effects
1	Greater than 28.94	74–95 mph	4–5 feet	Minimal–Gale force	No real damage to building structures. Damage primarily to unanchored mobile homes, shrubbery and trees. Some coastal flooding of low-lying roads and minor pier damage. Storm surge 4 to 5 feet above normal. Examples: Hurricane Lili in 2002 and Hurricane Gaston in 2004.
2	28.50 to 28.93	96–110 mph	6–8 feet	Moderate force	Some roofing material, door and window damage to buildings. Considerable damage to shrubbery, trees and mobile homes. Flooding damages piers. Small craft in unprotected moorings may break their moorings. Storm surge 6 to 8 feet above normal. Example: Hurricane Frances in 2004 and Hurricane Isabel in 2003.
3	27.91 to 28.49	111–130 mph	9–12 feet	Extensive–Significant force	Some structural damage to small residences and utility buildings. Large trees blown down. Mobile homes destroyed. Coastal flooding destroys smaller structures. Larger coastal structures damaged by floating debris. Terrain lower than 5 feet at sea level flooded 8 miles or more inland. Evacuation of low-lying residences near the coastline. Storm surge 9 to 12 feet above normal. Example: Hurricanes Jeanne and Ivan in 2004. Hurricane Katrina was a category 4 in the Gulf of Mexico but was only a category 3 when it made landfall in 2005.
4	27.17 to 27.90	131–155 mph	13–18 feet	Extreme force	Severe damage to roofs, doors and windows. Mobile homes completely destroyed. Major beach erosion. Major damage to lower floors of shoreline structures. Low-lying areas flooded up to 6 miles inland. Massive evacuation of residential areas up to 6 miles inland. Storm surge 13 to 18 feet above normal. Examples: Hurricanes Charlie in 2004 and Dennis in 2005.
5	Less than 27.17	Over 155 mph	Over 18 feet	Catas- trophic	Complete roof failure on many residences and industrial buildings. Some complete building failures. Small utility buildings overturned or blown away. Major flooding damage to lower floors of structures located less than 15 feet above sea level and within 500 yards of the shoreline. Massive evacuation of low-lying residential areas within 10 miles of shore. Storm surge over 18 feet above normal. Only three Category 5 hurricanes have made landfall in the United States: The Labor Day Hurricane of 1935, Hurricane Camille in 1969 and Hurricane Andrew in 1992.