Washington high court finds coverage for condo roof damage

The Washington Supreme Court Thursday unanimously found that Farmers Insurance Exchange must cover damage to a condominium’s roof from condensation and water vapor, ruling that the resulting loss exception to the faulty workmanship exclusion was applicable.

The court said in The Gardens Condominium v. Farmers Insurance Exchange that it agreed with an appeals panel that while the faulty construction of the building’s roof allowed for the buildup of condensation and water vapor, the resulting damage is covered.

“The resulting loss exception to the faulty workmanship exclusion states that Farmers will pay for loss or damage caused by a covered cause of loss resulting from faulty workmanship.

It does not state that the covered cause of loss must be independent from the faulty workmanship or that it cannot be a natural consequence of faulty workmanship,” the ruling states.

The justices were not persuaded by Farmers’ argument that such a finding would mean coverage for any damage resulting from a sequence of events.

“Insurers are free to draft policies that contain ‘sequence of events’ causation language and do not have resulting loss exceptions to the exclusions,” the ruling states.

Gardens first found damage to the building’s roof in 2002 and determined that it was caused by insufficient interior vents and defective design of the joists and rafters. The roof was redesigned in 2003 to increase ventilation and decrease condensation, court records show.

Water damage to the roof’s fireboard and sheathing as well as several joists was discovered in 2019. Gardens sought coverage from Farmers, which denied the claim, saying the damage resulted from faulty workmanship.

The condominium then sued Farmers. The trial judge awarded summary judgment to the insurer, finding the damage was not covered because the faulty workmanship started a sequence of events that resulted in the damage. An appeals court panel reversed, ruling that by including the resulting loss provision, Farmers agreed to cover losses even if they resulted from shoddy work.

Representatives for the parties did not respond to requests for comment.