Golf-Ball Hail, Hidden Exclusion: A Pennsylvania Mall’s $10M Lesson
In early May 2025, a fast-moving storm rolled across Indiana County, Pennsylvania. Golf-ball-sized hail pelted a 506,688-SF shopping center anchored by JCPenney, Kohl’s, and Harbor Freight Tools.
The property sits on 44.20 acres with a mix of TPO and EPDM roof structures. Given the different roof types, the large property type, and the severity of damage, our team was brought in from the start to advocate for the policyholder and navigate the claims process efficiently.
To ensure our client is filing a valid claim, we always start with two questions:
- Is there damage?
- Is there coverage in the policy?
We coordinated an initial scope to assess damages and requested the full policy from the carrier (not just the declarations page, which is a summary of coverage).
Is There Damage?
Our adjuster’s first goal was to map the different roof sections and document damage to each area. The initial inspection captured obvious impacts to the primary roof and exterior structures, producing an early estimate of around $5 million. However, due to the site’s complexity, there were numerous HVAC units, skylights, canopies, signage, and other structures with noticeable impact. Additionally, because this is a high-traffic shopping center, additional precautions would also be needed: traffic control, safety rails, security, and night/weekend premiums. Realistically, the true loss was trending toward $10 million.
Is There Coverage in the Policy?
It’s important to note the policy covered multiple retail properties across the country and not just for this one location. At the time we became involved, the policyholder only had the Declarations pages—a condensed, 14-page overview. The Declarations outlined tiers for wind/hail, but did not specify which tier each property fell under. At first glance, it appeared that as long as this shopping center wasn’t Tier 3, it would have coverage for the hail event.
Once the full policy arrived—including the Tier Three Windstorm & Hail State and County Hazard Classifications (Form PEG 10 88)—our legal team completed a line-by-line review. Near the end of that policy, we found the state/county listings with Indiana County listed under Pennsylvania.
Millions in Damage, But Zero Covered
Under this policy, the carrier owed $0 for a loss easily trending north of $10 million when fully scoped. At that point, our hands were tied. This wasn’t a debate about severity or an underpayment; it was a policy exclusion. Despite the lack of coverage, the owner still had to repair the damage to maintain insurability moving forward—markets expect storm damage to be remediated before they’ll bind or renew competitively.
This policy carried a sizable $1.8M annual premium across the multiple retail assets it covered. While the policyholder saw Declarations outlining coverage for Tier 1 and Tier 2, they were unaware that several assets were effectively excluded from wind & hail due to Tier 3 classification in form PEG 10 88. After reviewing the rest of the portfolio, we found additional properties in storm-prone areas with the same gap in coverage.
Moving Forward with Coverage
Although we couldn’t pursue this claim (the peril was not covered), we helped the owner secure a replacement policy aligned to each asset’s geographic risk, removing the wind/hail coverage gap while maintaining a comparable annual premium.
Preventing a $10M Hail Claim Denied Scenario
Takeaways for any owner:
- Request your full policy, not just the Declaration Pages. Residential policies often run 40+ pages, while a commercial policy can run 80+ pages. The details that determine whether you have coverage or not live in the fine print of the full policy.
- Have your policy reviewed and property inspected annually by a knowledgeable third party (outside your agent and carrier). Together, a policy review and inspection will confirm whether coverage truly fits the property’s unique nuances and geographic risks.
Storms happen. Coverage gaps don’t have to. Get your policy and property reviewed before the next storm, so you’re not paying out of pocket for an excluded peril.
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