Stillwater Roofing Insurance Claims: Cosmetic Damage Exclusion, Haag Method, and Roof Factoring Explained

Stillwater Insurance handles windstorm and hail claims through a workflow that relies heavily on the Haag method of damage identification, the HO 06 43 04 16 Cosmetic Damage Exclusion endorsement, and a Limited Loss Settlement (LLS) roof factoring schedule on qualifying policies. For roofing contractors working Stillwater claims, understanding each of these three elements (and the documentation they each require) is the difference between a properly approved supplement and a denied or factored-down claim.

This guide walks through how Stillwater evaluates roof claims, what the cosmetic damage exclusion actually means, how the Haag method is applied in practice, how LLS roof factoring affects payment amounts, and how a licensed Independent Adjuster Rep prepares a Stillwater supplement that recovers the full covered scope.

How Stillwater Handles Roof Claims

Stillwater Insurance is a property and casualty carrier writing homeowner, condo, and manufactured home policies across most U.S. markets. On roofing claims, Stillwater uses Xactimate-based estimates written by field adjusters, with specific documentation expectations driven by the Haag method and the cosmetic damage exclusion endorsement attached to many of its homeowner policies.

Three elements of Stillwater's workflow consistently drive supplement outcomes:

1. The HO 06 43 04 16 Cosmetic Damage Exclusion (Windstorm or Hail)
2. The Haag method of damage identification, which Stillwater cites as its procedural standard
3. LLS (Limited Loss Settlement) Roof Factoring, applied to qualifying policies based on roof age or condition

Each of these operates independently of the others, and each has its own documentation requirement. A Stillwater supplement has to address all three to get approved at the full scope of loss.

The HO 06 43 04 16 Cosmetic Damage Exclusion

Stillwater attaches the HO 06 43 04 16 Cosmetic Damage Exclusion to many of its homeowner policies. The endorsement, a publicly-filed ISO form, adds a specific exclusion to Section I of the policy covering windstorm and hail damage.

Under the endorsement, cosmetic damage means:

1. Marring
2. Pitting
3. Other superficial damage

...that alters the appearance of the "exterior surfacing" on buildings covered under Coverage A or B, caused by the peril of windstorm or hail, but does not prevent the "exterior surfacing" 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 endorsement defines exterior surfacing broadly to include roof surfacing, siding, doors, and windows. Roof surfacing is defined to include shingles, tiles, cladding, metal or synthetic sheeting, and roof flashing, along with all materials used in securing the roof surface and all materials applied to or under the roof surface for moisture protection.

For roofing contractors, the practical meaning is that surface-level hail or wind damage that does not compromise the functionality of the roof covering is excluded. Damage that does cause the roof covering to fail its intended function (water penetration, loss of barrier, compromised sealant) is covered.

The Haag Method and What Stillwater Looks For

Stillwater specifically cites the Haag method of identifying damage as its procedural standard. The Haag method requires proof that the shingle no longer functions as a barrier to the entrance of the elements. Under this standard:

• Bruising without shingle penetration does not qualify as covered damage. Fiberglass asphalt shingles can be bruised by hail without the bruise penetrating the mat. The Haag method treats this as cosmetic only because the shingle still functions as a water barrier.
• Granule separation does not qualify as covered damage. Granules are designed as a protective and ablative surface. Granule loss alone does not compromise the shingle's function as a water barrier and is treated as cosmetic.
• Evidence of penetration is required. Stillwater field adjusters must show photographic evidence of penetration through the shingle, ideally from the back side of a sample shingle showing the impact has driven through the mat.

The documentation implication is significant. On a Stillwater claim, counting hail impacts on the shingle surface is not enough. The supplement has to document actual penetration or functional failure, not just surface bruising.

How to Document a Stillwater Claim to Satisfy the Haag Method

For roofing contractors working Stillwater claims, the photo documentation workflow has to address the specific evidence the Haag method requires.

Back-side shingle photographs are mandatory

The single most powerful piece of evidence on a Stillwater claim is a photograph of the back side of a sample shingle showing penetration through the mat. On any Stillwater claim where the cosmetic damage exclusion applies, plan to pull sample shingles during initial inspection or tear-off and photograph them from both sides with a scale reference (a ruler, quarter, or shingle gauge in frame).

Puncture and crack documentation

Impacts that produced full-thickness punctures, cracks through the mat (not just granule cracks), or loss of the shingle substrate provide the direct evidence of functional failure that overcomes the cosmetic damage exclusion.

Sealant failure evidence

Damage that has compromised the shingle's sealant strip (visible separation, lifted tabs with debris under them making resealing unlikely) supports a finding that the roof covering has failed its intended function of keeping out the elements.

Interior damage documentation

If the same storm event produced interior ceiling staining, attic decking water marks, insulation saturation, or drywall damage, that collateral evidence independently supports a functional-failure finding on the roof covering. Interior photos become part of the roofing supplement package.

Consistent test square methodology

Even though impact count alone is not enough under the Haag method, test squares are still valuable for documenting the pattern and distribution of damage. A 10-foot by 10-foot test square on each directionally-facing slope, with every impact counted and characterized (cosmetic bruise vs. penetrating impact vs. crack through mat), gives Stillwater's reviewer a complete picture.

What Is LLS (Limited Loss Settlement) Roof Factoring?

Stillwater's Limited Loss Settlement roof factoring is a settlement schedule that applies to qualifying policies based on the age and condition of the roof at the time of loss. Under LLS roof factoring, the settlement amount for a covered roof claim is adjusted based on the roof's remaining useful life rather than paid at full replacement cost.

For older roofs (typically those approaching or past their expected service life), LLS factoring can significantly reduce the settlement amount even when damage is fully covered. The factoring schedule is policy-specific, and contractors working Stillwater claims should verify at the beginning of the claim whether LLS applies to the policy and, if so, what factor percentage applies at the roof's current age.

LLS factoring is not a denial of coverage. It is a reduction in the settlement amount based on the policy terms. A supplement on an LLS-factored claim still has to document the full scope of loss, but the settlement will be factored according to the schedule on qualifying policies.

If you are a roofing contractor and the Stillwater settlement amount looks far below the expected replacement cost, the first thing to verify is whether LLS factoring was applied and whether it was applied correctly per the policy schedule.

How a Licensed Independent Adjuster Rep Team Handles a Stillwater Supplement

At IA Solutions, every supplement written for a Stillwater claim is handled by a licensed Independent Adjuster Rep with field adjusting experience, trained specifically in Haag-method documentation and the cosmetic damage exclusion workflow. Our IA Reps are 1099 subcontractors licensed in the applicable state, based entirely in the United States.

The typical workflow for a Stillwater claim:

1. Carrier document review. We review Stillwater's original estimate and any notes disclosed on the claim document for noted issues or policy limitations that may affect what can be supplemented (for example, whether the cosmetic damage exclusion endorsement is listed, whether LLS roof factoring applies, and any coverage limits or exclusions Stillwater has applied). This avoids submitting items Stillwater has already documented as excluded, or allows us to provide the appropriate documentation for Stillwater to extend coverage when plausible.
2. Documentation audit against Haag standards. The contractor's photos, sample shingles, and inspection notes are audited against Haag-method evidence requirements. If gaps exist (especially missing back-side shingle photos or interior damage documentation), the additional documentation needed is specified.
3. LLS factoring verification. If LLS roof factoring applies to the policy, we verify the factor applied to the original settlement and confirm it matches the policy schedule.
4. Xactimate write-up. The supplement is written in Xactimate using the current monthly market price list for the loss zip code, with proper line item selection, correct labor and waste modifiers, and applicable GC O&P where trade count and severity support it.
5. Cover letter and submission. The supplement is submitted with a technical cover letter that documents the functional damage evidence (addressing the cosmetic damage exclusion) and the specific reason each line item is being added.
6. Follow-up. The IAS Rep handles discussions with Stillwater's adjuster, provides any additional documentation requested, and coordinates additional inspection requests or final invoice requirements needed to release depreciation.
7. Handoff if needed. If the claim requires further dispute beyond what a supplement can resolve (for example, a policy coverage dispute over how the cosmetic damage exclusion is being applied or how LLS factoring is calculated), we provide the complete documentation package to the Appraiser, Public Adjuster, or Attorney the homeowner or contractor chooses to use.

Common Supplement Opportunities on Stillwater Roof Claims

When functional damage is properly documented and LLS factoring has been applied correctly (or does not apply), Stillwater supplements typically address these line item categories:

• Full slope or full roof replacement when damage threshold is met
• Synthetic underlayment where code-required
• Ice and water shield at eaves, valleys, and penetrations
• Drip edge where code-required
• Code-compliant decking thickness upgrades
• Starter strip and hip/ridge caps
• Step flashing, counter-flashing, apron flashing
• Pipe jacks, boots, and collars
• Valley metal
• Ventilation upgrades to meet code-required ratios
• Steep charges (7/12 and above) applied to both tear-off and replacement quantities
• Two-story charges where applicable
• Labor minimums and difficult access surcharges
• GC O&P (10% overhead plus 10% profit) when trade count and severity support it
• Interior damage line items when water intrusion occurred

Checklist for Stillwater Supplements

Before submitting a supplement on a Stillwater claim, verify the following:

• [ ] Endorsement review. Verify whether the HO 06 43 04 16 Cosmetic Damage Exclusion is attached and whether LLS roof factoring applies.
• [ ] Licensed IA Rep writing the supplement (not a generic estimator)
• [ ] U.S.-based team. Every IA Rep lives and works in the United States. Many competitors outsource estimate writing and follow-up calls overseas to people with no hands-on U.S. construction experience or practical understanding of U.S. insurance policy and carrier workflows.
• [ ] Back-side shingle photographs documenting penetration through the mat (critical for Haag method)
• [ ] Interior damage photographs if the storm event produced water intrusion
• [ ] Test squares on multiple slopes with impacts characterized as cosmetic vs. penetrating
• [ ] Roof diagram with measurements and damage notations
• [ ] Sample shingle(s) preserved for potential expert review
• [ ] Current Xactware price list matching the loss zip code
• [ ] Code references for any code-upgrade items
• [ ] Cover letter documenting functional damage evidence and the reason for each added line item
• [ ] Appraisal / Dispute / Disputed Claims Handoff Policy. If the cosmetic damage exclusion or LLS factoring is disputed and the claim needs to escalate, your supplementing partner should be willing and able to provide all documentation to the Appraiser, Public Adjuster, or Attorney required to further dispute the claim.

Authoritative Resources for Stillwater Policyholders and Contractors

The Haag method is an industry-recognized damage identification standard developed by Haag Engineering. Public training materials and damage identification guides are available through Haag Education. The International Code Council maintains the publicly-available IRC and IBC code library that drives most supplement line items. For state-specific insurance regulations, the National Association of Insurance Commissioners (NAIC) maintains a directory of state insurance departments.

The Bottom Line on Stillwater Roofing Supplements

Stillwater roof claims can be fully recoverable when the documentation satisfies the Haag method and properly distinguishes functional damage from excluded cosmetic damage. Contractors working with a licensed IA Rep team that understands the HO 06 43 04 16 endorsement, the Haag method, and LLS roof factoring recover the full covered scope consistently. Contractors submitting generic supplements often see claims reduced or denied on cosmetic damage grounds that better documentation would have overcome.

If you are a roofing contractor with a Stillwater claim that was denied on cosmetic damage, reduced through LLS factoring, or underpaid on scope, reach out to our team. We will review the policy, the claim documentation, and the photo evidence at no cost and tell you whether a supplement can recover additional funds or whether the claim needs to escalate.