What is an Ice Dam?
An ice dam is a ridge of ice that forms at the edge of a roof, blocking melted snow from draining off the roof.  The standing water, backed up behind the ice dam, can seep through the roof and into the attic, walls, ceiling, and insulation.  Ice dams form when higher portions of a roof are above 32 degrees, while the lower portions remain below 32.  This causes the snow on the higher portion of the roof to melt, flowing down the roof until it reaches the portion of the roof below 32 degrees, causing it to freeze and eventually form an ice dam.  The ideal weather conditions for an ice dam epidemic are a large snowfall, followed by temperatures that approach the 30-degree area during the day, then drop well below freezing at night. While ice dams are a cold weather phenomenon, many factors make the development of ice dams more likely and may exacerbate their impact, including air leaks between the ceiling and attic, inadequate ceiling and/or roof insulation, gutters that have not been cleaned, and poorly designed roofs or gutter systems.

Overview of Property Insurance Coverage and Exclusions
Property insurance is typically provided by a homeowners policy (for individual home owners) or a businessowners policy (for owners of rental property or condominium associations).  Coverage is typically extended on a “named perils” or “all perils” basis.  Named perils policies will cover losses caused by one of the listed causes of the loss. Ice dams are not covered by these policies, but this type of policy has become quite rare.   The vast majority of policies provide coverage on an all perils basis, meaning that all losses are covered unless they are specifically excluded.

Determining whether a loss is excluded can be quite complicated.  For example, most policies don’t cover damage caused by “wear and tear”.  In the case of an ice dam, older houses are more likely to have water damage than a newer house with an ice dam, because the older roof is more susceptible to seepage given years of wear and tear.  Does this mean that wear and tear “caused” the water damage? On the one hand, the ice dam itself was the major cause of the damage.  Yet if it hadn’t been for the wear and tear, the damage probably wouldn’t have occurred.  So if wear and tear played any role in the damage, can an insurer deny your claim?

The answer to this question lies in the policy language describing the scope of the exclusion.  Some exclusions are worded very broadly, and claims will be denied where that exclusion played an indirect role in the loss, regardless of whether any other covered cause contributed. Earthquakes are typically excluded in this fashion: if an earthquake causes a fire or causes a tree to fall on a house, the claim will be denied, even though falling trees and fires might otherwise be covered.

Other exclusions are much narrower, excluding coverage for only the damage caused directly by that exclusion, but covering all ensuing losses.  The wear and tear exclusion is often worded in this fashion. In our ice dam example, this would mean that while the damage from the ice dam would be covered, any damage that already existed because of normal wear and tear would not be covered.

Somewhere in between are exclusions that exclude coverage for losses “caused by or resulting from” the exclusion.  This language will vary from policy to policy, but the key distinction is that the policy does not explicitly state that the loss is excluded when some other cause contributed to the loss in addition to the excluded cause.  Where this language is used, courts have typically required that insurers prove the excluded cause was the predominant cause of the loss compared with other contributing causes for the exclusion to apply.  As a result, whether an exclusion listed in the policy justifies denial of a claim depends on the wording of the exclusion, the scope of that exclusion, and the excluded cause’s role in the loss.

Insurance Coverage of Damage from Ice Dams
Historically, most claims for damage from ice dams have been paid.  In 2001, insurance companies paid out over $50 million in losses from ice dams.  However insurers, still reeling from a severe summer, are anxious to minimize their losses, and are starting to deny ice dam claims based upon some of the reasons identified below.

Damage/Loss Did Not Occur During Policy Period
Insurance companies are only liable for losses occurring while the policy is in effect. This reason for denial is most likely to be asserted when the insurer has been insuring the property for a relatively short period of time.  However, this exclusion only excludes damage that had already occurred, not events occurring in prior years.  Thus even if 20 years of ice damming made a roof susceptible to leaks, so long as the water damage itself occurs in the policy period, a claim should not be denied on this basis.

“Sudden and Accidental” Losses
Many homeowners insurance policies only cover direct physical loss that is “sudden and accidental,” meaning that the loss was abrupt and unexpected.  It is not enough for the discovery of the problem to be sudden: the loss itself must occur abruptly.  While this would tend to exclude water damage occurring over several years, it would not deny coverage because a house has had ice dams for a long period of time.  The phrase “sudden and accidental” modifies the word loss; the damage itself, not the condition leading to its occurrence, must be gradual to trigger this exclusion.

Neglect/Faulty Maintenance/Negligence
This exclusion has many different wordings, with all of them seeking to deny claims where the loss was caused by inadequate maintenance.  Here, an insurer would assert that maintenance failures, such as a failure to properly insulate the home or clean the gutters, were responsible for the ice dam.  It is unlikely that failure to clear the snow from your roof or failure to eliminate an existing ice dam would be considered neglect since property insurers are advising their customers NOT to take these steps due to the risk of injury and roof damage.  Minnesota courts narrowly construe exclusions against the insurer, meaning that the neglect would need to be severe to justify denying a claim on this basis.

Latent Defect/Faulty Design
This exclusion would apply where the property is particularly prone to ice damming because of design flaws or faulty construction.  This exclusion has been successfully asserted to deny a claim for water damage from ice damming.  For this to be the case, water damage would likely need to have been occurring since the construction of the home, and ice damming would likely need to have been an annual or at least frequent occurrence.

Water Damage Exclusion
Nearly all policies contain an exclusion for water damage.  This clause typically only applies to water that comes from underground sources (such as seepage through soil or backed-up drains), appliances, plumbing systems, heating systems, or air conditioning.  This exclusion should not apply in the case of ice dams, however, because the leaking occurs through the roof and does not come from one of these sources.

Wear and Tear/Deterioration/Decay
Most policies exclude losses due to wear and tear over time.  In the case of older homes with ice dams, insurers may seek to deny claims by arguing that the water damage was primarily the result of wear and tear to the roof making it susceptible to leaks.  This is a narrow exclusion and, depending on the policy, wear and tear would need to be either the sole or predominant cause of the damage (and not the ice dam itself) in order to deny a claim.

Needed Repairs/Maintenance Not Covered
Property insurance will typically cover the cost to repair direct physical loss to covered property.  Thus, while the direct damage from an ice dam may be covered, insurance may not cover improvements that may be necessary to prevent ice dams in the future such as better insulation or better ventilation of the attic.  Where insulation suffers water damage, removing and replacing that insulation should generally be covered.

Conclusion
While the ice dam problem is not a new one in Minnesota, this winter’s storms threaten to cause record levels of property damage.  Given the relatively undeveloped law regarding ice dam coverage, claims are likely to be denied for a variety of reasons.  While many of these reasons may be legitimate, policyholders should familiarize themselves with the terms of their policies, and also their right to insist upon an appraisal or inspection to substantiate the denial of a claim, or even challenge the conclusions drawn in an initial appraisal/inspection.

For more information, contact Chris Parrington at 612-746-2560 or e-mail cparrington@skjold-barthel.com.