I worked a roof claim for Farmers last Summer. The house had golf ball sized hail in 98 and it was never even looked at by a storm chaser. A couple years after the storm the home owner crawled on the roof to figure out why his roof was leaking and found some holes in his plastic air vents. He screwed thin metal plates over them and never repaired the water damage, which stopped. Early in 07 another hail storm moved through and it was approved for full replacement due to hail damage. The adjuster would not pay for any interior water damages.

OK, it was hit by hail in '98 with some leaking and never inspected.  Was a loss reported at that time?  And if not.... why not, or why was it not inspected?  Now it gets hit again in '07 (nine years later), and is inspected & the roof is totalled.  

Has it been with Farmers' all the while, or has there been a change in carriers?  And is this interior staining new, or just been status quo from '98?   And is it of any substance, or just a couple little ceiling stains below those roof vents?   Most adjusters probably would have included the interior stains as part of the new loss, but it sounds like the insured admitted they were old from the tale you tell.   If the insured didn't cry foul in '98, I don't understand why they would start now.