Homeowners Insurance Roof Replacement Deductibles

12 Mar
Home Insurance Roof Replacement

A typical homeowners policy will cover roof damage that is caused by snow, ice, fire, ice dams, hail, wind and even a tree falling on it.

The roof is one of the most functional and important parts of your home. It helps keep you safe, dry and out of the weather which is why making sure it is properly protected by your homeowners insurance is key.

There are a few things you should know about roof coverage to make sure you are fully covered in the event that your roof is destroyed. Here is everything you need to know about homeowners insurance and roofs.

Actual Cash Value and Replacement Cost Value

Homeowner policies come in a couple of different flavors in regards to your roof and if you choose the wrong one you may end up with a fairly high bill to cover when it comes time to replace your roof due to storm damage.

A typical homeowners policy will cover roof damage that is caused by snow, ice, fire, ice dams, hail, wind and even a tree falling on it. However, depending on whether you are carrying actual cash value (ACV) or replacement value will determine whether you are on the hook for damages or not.

Actual Cash Value: An actual cash value (ACV) policy takes into account depreciation and pays out what your roof is worth today which means you may have to cover a substantial portion of the replacement cost, especially if your roof was old when it was destroyed.

As an example, if your roof is ten years old and originally cost $15,000 you may only receive $8,000-$9,000 if it is destroyed and you need to make a claim. You will have to cover the balance when it comes to a new roof. As the roof has been exposed to the elements for 10 years it has seriously depreciated in value, which is taken into account with an actual cash value policy.

The payout will be even lower if your roof is 15-20 years old. While an actual cash value policy is cheaper than a replacement value policy, it could leave you with an expensive bill if your roof is destroyed by a covered peril.

Replacement Cost Value: This type of policy will replace your roof with a brand new one, regardless of cost. It does not take depreciation into account when calculating a payout so you get a new roof with no cost to you except your deductible.

Replacement value policies are a bit more expensive upfront but in the end the savings can be pretty dramatic if you have to replace your roof. The majority of industry experts recommend carrying a replacement value policy.

Wind and Hail Deductibles

Depending on where you live it is possible that your homeowner policy may have a different deductible for wind and hail damage.

If your policy has a different deductible for damage caused by wind or hail, it will most likely be a percentage deductible instead of a flat amount. In most cases, for this type of deductible to kick in the damage has to be caused by a hurricane or other named storm. Once a storm has been assigned a category and named by the National Weather Service, it could trigger the hurricane deductible.

These types of deductible can dramatically increase your out of pocket costs. In most cases the percentage amount will vary between 1 and 5 percent of your total coverage amount. As an example, if you have a policy with a 1 percent deductible for named storms and are carrying $350,000 in coverage, your out of pocket costs will be $3,500. If your deductible is 5 percent, you will be on the hook for $17,500 of the damage amount.

Nineteen states and the District of Columbia have hurricane deductibles.

Making a Roof Claim

If your roof is damaged by a covered peril here are a few tips for making a claim on your homeowners policy.

  • Document the Damage: As soon as it is safe to go back to your home document all of the damage. Take photos and video from a variety of different angles, making sure all damage is documented. These photos can be forwarded your adjuster to help speed the claim along.
  • Temporary Repairs: When it is safe, make temporary repairs to your home. As an example, if your roof has a hole in it, put a tarp over it to prevent rainwater from causing further damage to the interior of your house. In some cases, an insurance company will refuse to cover damage that is caused after the initial storm if you do not make reasonable efforts to make temporary repairs. Never climb around on a roof if you do not feel it is stable.

Take Detailed Notes: Whenever you have contact with your insurance company take detailed notes about what was discussed, the name and title of the person as well as the time and date. This will ensure there is no confusion about the claim process and what was said. It is also important to remember that claims can be negotiated. If you are unhappy with the settlement amount being offered, it is possible to appeal.

If you are looking for cheaper homeowners insurance rates or discounts on your home insurance due to recent home updates including a new roof, please contact us or submit a quick online home insurance quotes request to review more affordable home insurance rates online.

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