Roofing contractors are oftentimes placed in the position of “subject matter experts” for property owners. This is especially true with re-roofing, which represents over 70 percent of the low-slope roofing market. Understanding what is and is not covered in any given warranty can help increase your ability to be that trusted advisor for a property owner and differentiate yourself from your competition. Whether it ultimately helps you secure a project or not, knowing what’s what with warranties and what they may and may not cover is one way to help property owners make better decisions and avoid problems in the future.
The “Golden Rule”
What a particular warranty or guarantee is called or titled may not reflect what it actually does or does not cover. The only way to know what any warranty or guarantee actually provides a property owner is to read it and understand the coverage and terms of that coverage. A good example of this is a “material and workmanship” warranty. What does “material and workmanship” actually mean? Does it cover defects in material and workmanship? Or does it just provide the material and labor to repair a defect in the material? Are the defects covered extensive or very narrowly defined? Are there limits on what the “remedy” is? If so, what are they? All of these questions can have very different answers depending on the specific warranty. Yet, many property owners think if they are getting a “material and workmanship” warranty at the completion of their project, they are getting equivalent coverage when several contractors bid their project and each agrees to provide a material and workmanship warranty.
Basic Differentiators
Listed in Table 1 below are common differentiators between several types of roofing warranties/guarantees; this provides a simple table that shows how coverage can change depending on the actual document. Following is a closer look at what these different considerations are and what they actually mean for the property owner.
What is Covered
This is the starting point of understanding a specific document and usually it is found in the description of coverage. One caution is that coverage in any warranty or guarantee is also defined by what is specifically excluded from coverage. When coverage is not clear about workmanship deficiencies, a quick scan of the exclusions will often provide the answer. A requirement that the roofing system has to be installed in (strict) accordance with the manufacturer’s written instructions or, more clearly, that workmanship is specifically excluded, would classify that particular warranty as a “material defects” product warranty. The use of the phrase “material and labor” warranty can be found in a product warranty not because the installing workmanship is covered, but because the labor to repair a material defect is included in the coverage provided.
Unlimited vs. Limited Dollar Amount for Repairs
While every warranty/guarantee is “limited” by the terms of the coverage itself, and by such things as the exclusions, notice provisions, etc., our industry uses the term “NDL” to define guarantees with no limit on the dollar amount that will be spent for covered repairs. Conversely, a warranty or guarantee that is not an NDL will specifically call out a limitation on coverage, such as repairs shall not exceed the original installed cost of the roofing system or the original cost of the material. Another item to pay attention to regarding repair limitations, is whether the coverage is “pro-rated” over time or has a cumulative or per incident maximum. Proration of coverage is common with standard product warranties, where coverage is reduced based on the service the material/system has provided.
Other Key Provisions and Specifics
In addition to what is covered and whether there is a monetary limitation, warranties and guarantees have many other key provisions that owners need to be aware of when understanding whether a particular offering fits their needs or may seem unreasonable. Following are several provisions that may be contained within a warranty or guarantee and questions that should be asked to understand those provisions.
Terms of Notice – How quickly is the owner responsible for notifying the manufacturer or issuer that there may be a leak or problem? Is it a reasonable time frame? How must this contact be made? Often this time frame is 30 days, but it can be a very short time (e.g., 48 hours) and if the time limit passes, there may be no responsibility on the part of the issuer to actually cover the problem on the roof, even if it would have been covered if notice was made in the defined time frame.
Description of “Roofing System” – In a Roofing system guarantee. Does it cover all of the materials installed or does it cover only those provided by the issuer?
Owner’s Responsibilities – Is the owner responsible for preventative maintenance? If so, how is that defined? If it is not done, is it a cause for cancellation of the warranty or simply that a leak that results from the lack of maintenance is not covered? If the owner fails to notify the issuer of any problems (this relates to the terms of notice), is that also cause for cancellation?
Transferability – Is the warranty or guarantee transferable? If so, what are the specific steps that must be taken to transfer the warranty? Are they reasonable and customary or do they place a burden on the owner, such as a requirement beyond routine maintenance? Is there a fee and, if so, how much is it?
Length of Coverage – Is there a clearly stated length of coverage? Even for longterm lengths (generally in excess of 20 years), is the length defined or does the owner have inordinate responsibilities to actually have coverage for the full term implied? More clearly stated, a 5-year + 5-year + 5-year + 5-year + 5-year roofing system guarantee can have quite different responsibilities placed on the property owner, or even the roofing contractor, than a straight 25-year roofing system guarantee.
Exclusions from Coverage – As discussed above, every warranty and guarantee is “limited” in its coverage simply by the terms and conditions for coverage. Another area that is often misunderstood is the area of exclusions. The reason for this misunderstanding is whether an exclusion is something that if it causes the problem/leak, then the repair is not covered OR does that exclusion become the basis for cancellation of all coverage and the warranty/guarantee itself? Obviously the first type of exclusion is often acceptable and reasonable because problems caused on the roof that are not attributable to material or workmanship deficiencies, such as an earthquake or abuse by other trades, simply should not be covered by a warranty or guarantee that provides coverage for material or workmanship defects. Yet exclusions that can cause a warranty or guarantee to be cancelled unilaterally may seem less reasonable to a property owner.
Cause of Cancellation – What can cause a warranty or guarantee to be cancelled? Lack of maintenance? Failure to provide notice? Is the warranty or guarantee cancelled or is it suspended? Suspension may be utilized to require the property owner to fix items that are not covered and yet can be very damaging to the roofing system if not addressed in a timely manner.
Specificity of Coverage – In addition to standard
product and system warranties and guarantees, there
are some that can be very narrowly focused, usually
covering a specific cause of damage or leaks, such as
wind damage or impact damage. This type of coverage may be provided as a standalone warranty or guarantee or coverage may be offered through an addendum to a standard warranty or guarantee. Even with a specific type of coverage document, all of the other provisions need to be understood, such as what the remedy is, how it is limited, what the exclusions from coverage are and what the owner’s responsibilities are to obtain a remedy in the event a covered item/event occurs.
Clarity Comes from Reading and Understanding
Quite simply, being a trusted advisor for property owners can result in great partnerships and great roofs being installed. In the area of roofing material warranties and system guarantees, all of which are by definition “limited,” there is a vast array of offerings and, many times, misunderstanding of what is actually being provided by the issuer. When discussing warranties and guarantees, understanding exactly what is being offered by researching the key provisions can position you to provide clarity to a property owner or roofing system specifier. This clarity will help avoid problems in the future and also help you be recognized as a valuable resource for information regarding roofing systems and their installation.
FRM
Helene Hardy Pierce is Vice President of Technical Services, Codes and Industry Relations at GAF in Parsippany, NJ.
