Haris Ashley
Exterior Insulation and Finish Systems (EIFS), also known as synthetic stucco, is a multi-layered exterior building finish that was introduced in the 1980s. Due to its tendency to trap moisture, it often results in property damage. While homeowners' insurance policies may cover EIFS-related damage, it depends on the type of damage and how it occurred. Many insurance carriers are reluctant to insure homes with EIFS siding due to the associated risks and the high cost of repairs, which can run into the tens of thousands of dollars.
| Characteristics | Values |
|---|---|
| Difficulty in obtaining insurance coverage | Yes |
| Reason for difficulty | EIFS is an exterior wall cladding system that tends to retain moisture between the sheathing of the home and the finish system, leading to water intrusion and entrapment in the wall cavities. This can cause significant damage, including wood rot and mold. |
| Commercial General Liability (CGL) policy | May provide coverage for construction claims against a general contractor, even if the claim only alleges a breach of contract and not negligence. |
| EIFS exclusion in CGL policy | Some CGL policies have an EIFS exclusion, barring coverage for property damage resulting from EIFS. |
| Impact of EIFS exclusion | May cancel coverage, as insurers may deny liability for negligence by their insured if the policy includes a broadly worded EIFS exclusion. |
| Homeowner's insurance coverage | Homeowner's insurance may not cover homes with EIFS siding due to safety concerns and the potential for water damage. |
| Obtaining coverage | A good broker who understands construction and EIFS coverage can improve the chances of successfully obtaining insurance. |
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What You'll Learn
- Homeowner's insurance may not cover EIFS-related water damage
- EIFS distributors and applicators may struggle to obtain insurance coverage
- EIFS-related damage may be excluded from commercial general liability policies
- EIFS-related damage may be caused by unlicensed or improperly trained professionals
- Homeowners can seek alternative exterior wall cladding to EIFS
Homeowner's insurance may not cover EIFS-related water damage
Exterior Insulation and Finish Systems (EIFS) is a non-load-bearing, exterior wall cladding system that was introduced in the residential construction industry in the 1980s. EIFS is often referred to as synthetic stucco and has a tendency to retain moisture between the sheathing of the home and the finish system. This moisture buildup can lead to wood rot and the growth of mold and mildew.
Due to the high risk of water damage, many insurance companies are reluctant to provide coverage for homes with EIFS siding. Some insurance carriers have even started to cancel the policies of existing customers with EIFS siding. This is because the presence of moisture in a structure can lead to the growth of mold, and the vapor impermeability of EIFS creates an ideal environment for this. Exposure to mold can cause a range of health problems, from nasal congestion and eye irritation to shortness of breath and fever.
Furthermore, EIFS-related water damage is often the result of improper installation by unlicensed professionals. Many homeowners insurance policies do not cover water damage in these cases, and the policy may suggest it is the responsibility of the builder or contractor. As a result, many homeowners have filed suits against the builder or contractor to recoup their losses.
To protect your home, it is recommended to have regular inspections to ensure seams are intact and the surface hasn't been damaged. It is also important to check for any water intrusion or entrapment in the wall cavities, as this can lead to costly repairs if left untreated.
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EIFS distributors and applicators may struggle to obtain insurance coverage
EIFS, or "Exterior Insulation and Finish Systems", is often referred to as synthetic stucco. It has a tendency to retain moisture between the sheathing of the home and the finish system, which can result in severe damage. This can cost tens of thousands of dollars to fix, and homeowners insurance might not cover it.
For many years, EIFS applicators, general contractors, building owners, and distributors have struggled to obtain insurance coverage for EIFS applications. This is because EIFS has a strong tendency to retain moisture, which results in damage. When damage occurs, insurance companies have to pay out large sums of money. This has made EIFS unattractive to insurance companies, many of whom have excluded it from their policies.
In the past, there was an influx of costly EIFS claims, which is why insurance companies are wary of providing coverage. Today, EIFS insurance is available but can be expensive. Distributors and applicators may struggle to obtain coverage due to a lack of knowledge in the insurance industry about EIFS. Many insurance brokers are not well-informed about EIFS because it is not a common request.
However, there are reasonable options out there, and knowledgeable agents can help distributors and applicators find them. Distributors and applicators should seek out experienced agents who are familiar with EIFS and the construction industry. These agents will be able to find the right broker to take the application to the insurance carrier.
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EIFS-related damage may be excluded from commercial general liability policies
EIFS, or "Exterior Insulation and Finish Systems", is often referred to as synthetic stucco. It is a multi-layered system that consists of an insulation board attached to the exterior wall substrate, followed by a base coat that is reinforced with fibreglass mesh and finished with a decorative topcoat.
Due to the unique risks associated with EIFS, such as water intrusion and moisture retention, some insurance carriers are reluctant to insure homes with this type of siding. EIFS-related damage can be costly, and insurers have increased the number of exclusions in their commercial general liability (CGL) policies.
The CGL policy is a standard insurance policy issued to business organizations to protect them against liability claims for bodily injury and property damage arising from operations. While the CGL policy typically covers most perils, it does not cover those specifically listed as exclusions. EIFS applications are often excluded from CGL policies due to the potential for costly claims.
The most common coverage exclusions for EIFS include losses involving the design, sale, installation, maintenance, and repair of the system, particularly those without adequate drainage. Insurers aim to avoid liability for inherent flaws in the design or construction of EIFS, such as inadequate drainage, ventilation, or detailing. Pre-existing conditions may also be excluded from coverage, as well as defective installation, which can result in water damage, mould, and structural issues.
It is important for property owners and contractors to carefully review their insurance policies to understand the scope of coverage and any exclusions that may apply to EIFS-related damage. Obtaining insurance coverage for EIFS can be challenging and expensive, and alternative exterior wall cladding options may be considered if coverage cannot be obtained.
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EIFS-related damage may be caused by unlicensed or improperly trained professionals
EIFS, or "Exterior Insulation and Finish Systems", is often referred to as synthetic stucco. It is a popular cladding system for buildings. However, there are some challenges associated with its installation and maintenance. One of the key issues is the risk of water damage due to its design, which does not allow moisture to drain out easily. This can lead to water intrusion and entrapment in the wall cavities, resulting in severe structural damage.
Because of these safety concerns, some insurance carriers are reluctant to insure homes with EIFS siding. Homeowners with EIFS siding may face challenges in obtaining adequate insurance coverage, and in some cases, their policies may be cancelled. The insurance industry has been slow to respond to the need for affordable EIFS coverage, and even when coverage is available, it tends to be expensive.
The proper installation and repair of EIFS is crucial to mitigating these risks. Distributors of EIFS are responsible for ensuring that applicators are properly trained and certified. However, if the construction or repair job is undertaken by an unlicensed or improperly trained individual, there is a significant risk of improper installation or repair, which can exacerbate the risks associated with EIFS.
Improper EIFS installation or repair can lead to a host of issues, including adhesion failure, incorrect adhesion between layers, insufficient moisture protection, inconsistent insulation, and structural damage. These issues can result in water intrusion, mould growth, reduced energy efficiency, and even wall collapse. The use of unapproved materials and improper repair techniques can also void the EIFS system's warranty, leaving homeowners with limited recourse for remediation.
To avoid these issues, it is essential to engage trained and licensed professionals for EIFS installation and repair work. While this may incur higher upfront costs, it can prevent future problems and expensive damage caused by botched DIY or amateur attempts. A good broker or an experienced insurance agent specialising in construction and EIFS coverage can also help homeowners obtain the necessary coverage for their EIFS-clad properties.
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Homeowners can seek alternative exterior wall cladding to EIFS
EIFS, or Exterior Insulation and Finish Systems, is a type of exterior wall cladding that offers a range of benefits. It is an energy-efficient insulation system that helps reduce air infiltration, making it an excellent choice for those looking to lower their energy costs. EIFS also provides exceptional durability, flexibility, crack resistance, and water resistance.
However, obtaining insurance coverage for EIFS applications can be challenging and expensive. Some insurance carriers are reluctant to insure homes with EIFS siding due to safety concerns and the tendency for EIFS to retain moisture, which can lead to water damage and mould growth. As a result, homeowners may need to seek alternative exterior wall cladding options that are more easily insurable.
One alternative to EIFS is traditional stucco. While stucco is prone to cracking and may not offer the same energy efficiency as EIFS, it is a widely used and accepted exterior wall finish. Traditional stucco may be a more insurable option, although it is important to note that stucco can also be susceptible to water damage if not properly installed and sealed.
Another option is brick veneer, which provides a classic and aesthetically pleasing exterior. Brick veneer offers good insulation and is a durable and low-maintenance choice. Additionally, fibre cement siding is a viable alternative that is known for its durability and moisture resistance. It is a popular choice for those seeking a long-lasting and low-maintenance exterior.
Vinyl siding is another exterior wall cladding option that is widely used due to its affordability and ease of installation. While vinyl may not offer the same level of insulation as other materials, it is a lightweight and versatile choice that can mimic the look of wood or stone. Homeowners can also consider wood siding, which provides a natural and rustic appearance. Wood siding is a good insulator and can be treated to improve its durability and resistance to the elements.
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Frequently asked questions
EIFS stands for Exterior Insulation and Finish Systems, also known as synthetic stucco.
EIFS has a tendency to retain moisture between the sheathing of the home and the finish system. This moisture buildup can lead to the deterioration of materials (wood rot) and the presence of mold and mildew.
Alternative exterior wall cladding can be used in place of EIFS.
Homeowners insurance may not always cover EIFS. To improve your chances of obtaining coverage, you should get a good broker to help write a solid application from the outset of the project and build a relationship with that broker and insurance carrier over time.
