“The central meaning of [physical injury] as it is used in everyday English — the image it would conjure up in the mind of a person unschooled in the subtleties of insurance law — is of a harmful change in appearance, shape, composition, or some other physical dimension of the ‘injured’ person or thing.” U.S. Metals, Inc. v. Liberty Mut. Grp. Inc., №14–0753 (Tex. Dec. 04, 2015) citing Elijer Manufacturing, Inc. v. Liberty Mutual Ins. Co., 972 F.2d 805 (7th Cir. 1992).
A visible component of property may serve an aesthetic function in addition to any structural or utilitarian function. If a covered event causes a harmful change in the appearance of that component, the aesthetic function has failed.
A harmful change in appearance is therefore a form of physical damage. Adjusters often describe that type of injury as “cosmetic damage,” but the label does not make it non-physical. If the policy does not exclude cosmetic damage, a harmful change in appearance caused by a covered peril should be recoverable.
Stated another way, any visible component or item in a home potentially has an aesthetic function. If the appearance of that component is materially and harmfully altered, the property has sustained a physical change in one of its dimensions—its appearance. U.S. Metals recognizes physical injury as requiring a harmful change in appearance, shape, composition, or some other physical dimension. U.S. Metals, Inc. v. Liberty Mutual Group, Inc., 490 S.W.3d 20 (Tex. 2015).
If you go to appraisal, the question is therefore not whether the damage is “merely cosmetic.” The question is whether the covered peril caused a harmful change in appearance to the property and, if so, the amount of loss associated with that physical damage.
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