The Contention Between Insurance Companies And Illinois’ Law Regarding The Matching Policy


Matching policy remains one of the most contentious and challenging issues in the world of property insurance. While homeowners believe that insurance is supposed to cover everything that is damaged in case of accidental occurrences such as storms, fire, or flood, some policies may have stipulations that are hard to interpret.

One issue that has proved to be a hard nut crack for the legal representatives and insurance companies is the matching policy.  Have you ever fathomed what will happen if a part of your insured property is damaged and fails to match the entire structure when it is repaired by insurance? The matching policy was designed to cover such issues. However, its interpretation has proved to be a contention point between insurance companies and the court system.

What is Matching?

Matching is a principle in the insurance industry that seeks to ensure that uniformity is maintained after an insurer pays for damage repairs and replacements on a property. When an accidental loss occurs, the insurance company covers the costs to repair and replace damaged areas. However, due to age, shape, size, color, and availability of materials, the newly rebuilt parts of a property may fail to match in appearance with the other undamaged sections.

Suppose a property owner determines a lack of uniformity between repaired and the undamaged portions. In that case, they may seek payment from the insurer to repair or replace elements in the entire property for it to match. However, you should note that a matching issue arises only if the structure or property at hand had a uniform appearance before the accidental loss occurred.

Matching Coverage

When it comes to coverage of the matching policy, there are two contending sides. The proponents argue that any repairs on a property should result in a uniform, matching appearance. If an insurance company only attends to the damaged section, the entire property will lack the fluidity that was there before. They want the insurer to cover the costs of ensuring that the whole property remains as it was before the damage.

On the other hand, insurance companies rally behind typical first-party property policies, which offer coverage for “direct physical loss or damage to” an insured property. The opponents argue that their obligation as an insurer is to cover direct physical damages on an insured property without being concerned by whether a matched appearance is achieved.

However, since different insurance companies boast insurance covers that vary in terms of policies and conditions, matching coverage is based on the particular policy language. Additionally, it also depends on the specific jurisdiction, since some states in the US even have regulations, statutes, or governing case law that they abide by.

What the Law in Illinois Says about Matching Coverage

Between 2018 and 2019, there was a legal showdown between Naperville Condominium Association and the Philadelphia Indemnity Insurance Company regarding matching policy. The association had insurance coverage with the Philadelphia company on their condo buildings. So, when hails and wind storm ravaged their properties in 2014, Philadelphia agreed to pay for repairs of the damaged siding on the south and west sides of the buildings.

However, when the association completed the repairs, they discovered that the siding was not uniform throughout their property. Therefore, they asked the Philadelphia Identity Insurance Company to appraise them to replace the siding on the undamaged north and east side building to achieve a matching appearance on their insured condo buildings. However, the insurer refused to pay, and they decided to seek legal redress from the district court.

The district court listened to both sides and ruled the case in favor of the Naperville Condominium Association. Philadelphia felt the ruling was not fair and decided to file an appeal. However, to their dismay, the appellate panel affirmed the verdict.

The court rejected the company’s argument that the provision “physical direct loss or damage to” covered property only referred to the individual sections of the buildings that were damaged.  They argued that the insurer had to ensure the association’s structures returned to their original form for the coverage to be considered comprehensive.

By repairing the sidings on the west and south sides of the building, they would leave an uniformed and unmatched property, which would result in a reduction in value. The court noted that just like the insurance company repairs minor damages such as replacing shingles to make a building whole again, they should cover for the replacement of siding in the north and east sides of the building or else pay the owners for the reduction in value. Any matching coverage contention in Illinois will likely follow this ruling, and the insurance companies will most likely be on the losing side.

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