The Minnesota Supreme Court decided how to apply the building code coverage statute to a roof assembly. The analysis the Supreme Court used is not only important for roof assemblies, but any enforcement of building code to property partially damaged by an insured loss.
The statute the Supreme Court applied is Minnesota Statute Section 65A.10, which requires an insurance company to cover the cost to repair that “portion of the property” damaged up to code requirements. What portion of the property is covered? That is the question addressed by the Supreme Court in St. Matthews v. State Farm, and now Great Northwest v. Campbell which was decided on July 30, 2025. Great Northwest is now the law of the State of Minnesota for applying the statute.
The Supreme Court held an insurance company providing replacement cost coverage must pay for sheathing beneath shingles under Minnesota Statute Section 65A.10. The reasoning is important, not just the outcome. The insurance company argued that since the only item damaged was shingles it need only replace shingles. I argued that the principle to apply is from the perspective of the shingle installer. Damaged shingles may not be replaced in compliance with building codes without first installing a new sheathing surface. The Supreme Court agreed with my argument. It held:
… the state building code governing shingle installation incorporates the instructions set forth by the shingle manufacturer, which state that the replacement shingles would only be installed on a roof layer with gaps smaller than one-eighth of an inch. ** Thus, because the code governing the damaged property required the installation of new sheathing, we conclude coverage is required by section 65A.10, subdivision 1.
The Supreme Court agreed that the shingle installer could not comply with state code governing shingles without installing new sheathing. Failure of the insurer to cover this expense means it failed to fully cover the cost of new shingles. As such, the cost of new sheathing was a “cost of replacing [the damage shingles] in accordance with the minimum code.” In turn, it must be covered by insurance.
This principle applies to other aspects of the roof assembly. All work needed to replace damaged shingles is covered so long as those items are required by manufacturer install instructions, and in turn, code. There should be coverage if manufacturer install instructions and code require installation of ice and water shield. Any material and labor required should be covered, even if that item was not installed in the building prior to the storm, or is not directly damaged by hail.
The principle applies beyond roof assemblies. The scope of the statute is now best understood from the perspective of the repair installer addressing damaged materials. If code requires a repair contractor to install additional materials to repair a damaged building element, a replacement cost policy must provide coverage. Manufacturer install instructions to repair the damaged item will play a big role as code often follows these instructions.
This principle is not absolute. The outcome of St. Matthews stands. In St. Matthews, the Supreme Court held that from the perspective of a drywall installer, there was nothing about the condition of the masonry wall behind the drywall that required repair the masonry wall. Building code enforcement requiring repair to the masonry did not involve how drywall attaches to the masonry wall. The repair contractor could still install drywall to the masonry wall. That is unlike the Great Northwest v. Campbell case where there was no way for the installer to repair the shingles without also addressing the underlayment.
This is a nice win for property owners. Let me know if you have any questions about how building code applies to insurance adjustment. Send me an email at ed@beckmannlawfirm.com