Cosmetic Roof Damage Exclusions: What Homeowners Need to Know

Cosmetic roof damage exclusions have become one of the most common—and most confusing—reasons insurers deny hail and wind claims. A homeowner may look at a dented metal roof and think, “That wasn’t there before.” The adjuster may think the same. But the insurer often responds: “It’s cosmetic. No coverage.”

Homeowners often learn of these exclusions in their insurance policies for the first time during one of the most stressful moments in their lives. And many ask the same question: “Is this really allowed? Do I have any chance to fight it?”

The answer is often yes. Texas court decisions shape how these exclusions work—and many home and business owners don’t realize how many paths remain open even after a “cosmetic only” denial.

Below is a clear, practical overview of what courts are actually doing with these exclusions, and what it means for policyholders today.

Where Cosmetic Exclusions Came From—and Why Insurers Use Them

Cosmetic roof damage exclusions didn’t arise because homeowners were filing questionable claims. Their origins go back to the late 1990s, when insurance companies struggled with massive hail losses in Texas. The Texas Department of Insurance began approving limited exclusions in 1998, followed by TWIA in 1999. By 2013, national groups like ISO and AAIS had introduced industry-wide forms—for example, the CP 10 36 endorsement—that allowed insurers to exclude damage to metal roof surfaces unless the insured could show real functional impairment.

Insurers adopted these forms broadly because they offered a way to reduce payouts for hail dents that might not immediately cause leaks. But as these exclusions became more common, courts began closely examining when they actually apply—and when they don’t.

Burdens of Proof: The Insurer Must Prove the Damage Is Cosmetic

One of the biggest misunderstandings among policyholders is that they must prove their roof is not cosmetic. That’s incorrect. Courts in Texas have made it clear: Cosmetic damage is an exclusion. The insurer—not the homeowner—must prove it applies.

For example, in Wall v. Safeco (W.D. Tex. 2023), the insurer tried to win on summary judgment by arguing the homeowner had “no evidence” of functional damage. The court rejected that attempt, explaining that the insurer cannot simply sit back and say “you didn’t prove anything.” They must affirmatively demonstrate that all remaining damage falls within the cosmetic exclusion.

For property owners, this is critical. When an insurer denies a claim as “cosmetic,” you should immediately ask: What evidence did they produce to prove it? If the answer is “not much,” the denial may be legally defective.

Why Leaks and Water Intrusion May Impact the Outcome

Even when cosmetic exclusions exist, one thing consistently pushes claims back into coverage: leaks after the storm. For example, in Hahn v. United Fire & Casualty (W.D. Tex. 2017), the homeowner survived summary judgment even after his expert was excluded entirely. Why? Because he had evidence of new leaks appearing after the hailstorm. The court held that circumstantial evidence—timing, staining, ongoing moisture—was enough to show functional impairment.

This is good news for public adjusters and homeowners. You do not always need to pinpoint the exact hailstone strike that created a hole. You simply need a credible sequence:

• No leaks before the storm

• Leaks shortly afterward

• Continued water intrusion over time

Courts view this as strong evidence that the roof is no longer functioning, which could make the cosmetic exclusion inapplicable.

But, Leaks are Not Always Required

Texas courts have also held that hail impacts which penetrate a roof’s protective outer layer—and allow contaminants like water, salt, and silt to infiltrate—can transform what an insurer labels “cosmetic” into genuine functional damage.

For example, in Nazarene v. Church Mutual (N.D. Tex. 2023), the church’s expert showed that this contamination compromised the roof system beneath the surface, leading to ongoing leaks and reduced protective capacity. Given these facts, the court found a jury could reasonably conclude the exclusion did not apply. For public adjusters and homeowners, Nazarene stands as a good example that subtle surface dents often mask deeper impairment—and insurers cannot rely on cosmetic exclusions when a roof’s long-term ability to shed water and resist corrosion has been compromised.

Policy Language Makes a Huge Difference

Not all cosmetic exclusions are written the same. Understanding the exact wording matters—especially during policy selection or appeal of a denial.

For example, some cosmetic waiver endorsements use "forward-looking" language requiring the roof to continue functioning “to the same extent as before" the storm. In TBC-JP-LR v. Allied (N.D. Tex. 2018), hail damage that reduced the service life was held to overcome the cosmetic language even though the roof was not leaking. The Plaintiff's expert testified that the galvalume coating on the metal panels was disrupted by hail which would cause accelerated corrosion to the metal roofs.

So, even if your roof isn’t leaking today, some cosmetic exclusions may not apply if hail damaged its protective layers. Your policy language may provide a pathway to challenge denials based on cosmetic exclusions even when roofs are presently still “functional” and watertight.

A Cosmetic Denial Is Not Always the End of the Road

Cosmetic exclusions may sound final, but the law behind them is far more nuanced. Courts expect insurers to prove these exclusions apply. They recognize that leaks, compromised protective layers, structural deformation, expert disputes, and the inherent complexity of roof systems often create real questions about functionality. And when those questions exist, homeowners may win.

Understanding these rulings provides a powerful roadmap for challenging denials. They also underscore the importance of documenting leaks, securing expert evaluations, and selecting policies with favorable language.

If your insurer has denied your claim as “cosmetic only,” that is often just the beginning—not the end—of the story. If you need help evaluating your claim or fighting a denial, The Duke Law Firm here to assist.