A federal court decision from Minnesota provides a sobering look at how cosmetic damage exclusions may be interpreted in hail-damage cases involving metal roofs. The case, Cannon Falls Area Schools, ISD 252 v. The Hanover American Insurance Company, 1 involved a dispute over whether widespread hail dents to metal school roofs constituted covered damage or were excluded as merely cosmetic. I want to give a shout-out to Steve Badger for bringing this case to my attention.
The facts were largely undisputed. A hailstorm struck the Cannon Falls Elementary School and High School in April of 2022. Both buildings had metal roofs, and the storm caused widespread indentations across the roof panels. There were no punctures, no disengaged seams, and no leaks, either immediately after the storm or in the three years that followed. Hanover paid for other hail-related damage to the properties but denied coverage for the roofs based on a cosmetic damage exclusion contained in the policy.
The exclusion at issue stated:
We will not pay for cosmetic damage to roof surfacing caused by wind and/or hail. For the purpose of this endorsement, cosmetic damage means that the wind and/or hail caused marring, pitting or other superficial damage that altered the appearance of the roof surfacing, but such damage does not prevent the roof from continuing to function as a barrier to entrance of the elements to the same extent as it did before the cosmetic damage occurred.
The school district argued that while the roofs were not leaking, the hail dents immediately weakened the metal panels. Their expert testified that dented metal has already used up part of its plastic strain capacity, making it more susceptible to rupture from future hail, wind loads, or snow loads. According to the district, a roof that is now weaker and more likely to fail under future weather events does not function as a barrier to the elements to the same extent as it did before the hailstorm. The district emphasized that the policy does not limit “the elements” to rainwater alone, and that hail, wind, and snow are plainly elements the roof must resist. They also pointed out that Hanover bore the burden of proving the exclusion applied and had done no testing to establish that the roof’s performance was unchanged.
Hanover framed the case very differently. It argued that the exclusion is clear and unambiguous and focuses on present performance, not future risk. Hanover’s position was that if the roof did not allow the elements inside the building before the hailstorm and does not allow the elements inside after the hailstorm, then it continues to function as a barrier to the same extent. Hanover argued that increased susceptibility, reduced service life, or theoretical future failure are irrelevant under the plain language of the exclusion. In Hanover’s view, dents that alter appearance but do not cause leaks or breaches are exactly what this cosmetic damage exclusion was designed to remove from coverage.
Judge Katherine Menendez agreed with Hanover and granted summary judgment in its favor. The court held that the cosmetic damage exclusion was unambiguous and that its focus is on whether the roof currently functions as a barrier to the elements, not whether it may be more likely to fail at some unknown point in the future. The court emphasized that the policy asks whether the damage “does not prevent the roof from continuing to function as a barrier,” and that this language is written in the present tense. The phrase “to the same extent as it did before” was not read to require an engineering comparison of strength, safety margins, or remaining service life. Instead, the court treated it as a functional inquiry: ‘Does the roof still keep the elements out or not?’
The court was explicit that, even if the school district’s expert testimony were accepted as true, the result would not change. The roofs had not leaked, had not allowed any incursion of the elements, and continued to perform their basic function as they had before the storm. Because of that, no reasonable jury could find that the hail damage prevented the roofs from functioning as barriers to the elements to the same extent as before. Importantly, the court denied Hanover’s motion to exclude the policyholder’s expert as moot, making clear that the ruling was based on policy interpretation rather than a rejection of the expert’s credibility.
In reaching its decision, the court relied on similar rulings from other jurisdictions interpreting nearly identical cosmetic damage exclusions, including cases holding that dents which may shorten a roof’s lifespan or increase the risk of future failure are still excluded so long as the roof presently keeps the elements out. The court predicted that the Minnesota Supreme Court would adopt the same interpretation. The docket indicated that the ruling is being appealed.
This case is a reminder that cosmetic damage exclusions are not window dressing. When written this way, courts are increasingly willing to enforce them exactly as written, even where there is credible evidence of structural weakening. The distinction drawn by the court is not between strong roofs and weak roofs, but between roofs that currently fail and roofs that have not yet failed. For policyholders, that is a harsh line. It shifts the real battle to policy language, underwriting, and renewal negotiations long before the hail ever falls.
Steve Badger was right to flag this decision. Whether you agree with it or not, it is a clear signal of where many courts seem headed. Ignoring it would be a mistake.
Thought For The Day
“A word is not a crystal, transparent and unchanged; it is the skin of a living thought and may vary greatly in color and content according to the circumstances.”
— Oliver Wendell Holmes Jr.
1 Cannon Falls Area Schools, ISD 252 v. The Hanover American Ins. Co., No. 24-cv-3383, 2025 WL 2976533 (D. Minn. Oct. 21, 2025). (See, Cannon Falls Motion for Summary Judgment, Hanover Motion for Summary Judgment, and Cannon Falls Response to Motion for Summary Judgment).