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posted Nov 24, 2015, 5:42 AM by Christopher Kidd   [ updated Feb 5, 2016, 9:12 AM ]
Aluminum Siding Claims
The Maryland Insurance Administration (MIA) has received numerous complaints
from homeowners concerning the settlement practices of insurers of claims for damage to
aluminum siding from hail. These complaints allege practices by insurers of paying to
replace only those portions of siding that are physically damaged without regard to the
mismatching between existing and new siding. Failure to adjust such claims in accordance
with policy provisions or the company’s own operations or settlement guidelines may result
in a finding that the insurer is in violation of Section 230A, Article 48A of the Code. This
Bulletin reiterates long-standing MIA policy regarding the settlement of such claims.
The MIA interprets Section 230A, Article 48A of the Code, in the following manner
as to claims for aluminum siding damage under a covered peril made under a “replacement
cost” homeowner’s policy. The replacement of damaged siding with new siding may result in
mismatched siding between the existing siding and the newly replaced siding. In such cases
of mismatching, settlement options include moving undamaged siding from other areas of the
house to replace damaged siding, replacement of both damaged and undamaged siding on
one or more sides of a house, replacement of all siding, and/or an allowance to reflect
diminution in value of the house caused by the mismatch. While the MIA does not interpret a
replacement cost policy to require in every instance, replacement of all siding including
undamaged siding in order to minimize mismatching, insurers whose settlement practices fail
to take into account major differences in color shades, textures, or siding dimensions as
provided above may be subject to action under Section 230A.
Insurers should inform their insureds of any appraisal rights under the policy where
there is disagreement on the amount of a covered loss. See COMAR 09.30.75