a guide to answer common insurance questions
Will my premium increase if I file a roof insurance claim?
If you weren’t negligent, then probably not.
Since hail damage is not caused by you being negligent, most insurance companies will not raise your premium if you file a claim. It’s not like you moved your house into the hail storm. By comparison, if you backed your car into your garage door, that’s negligence – you didn’t open the door, or make sure it was open before you backed-up. So, your premium will probably go up, in that case.
What is the insurer looking for?
When the inspector from your insurance company comes over to inspect your roof, they are usually looking for prominent hail damage or other weather-related damage to your roof. The inspector looks for ‘bruising’ or dark spot on your shingles where granules are missing, exposing the underlayment or fiberglass. New hail damage usually has a shiny appearance while older damage can appear duller due to weather exposure.
Prominent hail damage on a relatively new asphalt shingle roof.
one way to tell that your roof has hail damage is if it has these black spots on it
Damage from small hail on an old asphalt shingle roof.
aged asphalt shingle roof with hail damage
Although hail damage doesn’t pose an immediate threat to the structural integrity of the roof, it will eventually lead to problems. Also, many insurance companies have a statute of limitations of how long a hail claim is viable. Therefore, it is usually a good idea to contact your insurance company soon after a major hail storm.
When your roof has hail damage, this causes several things;
accelerated granule loss
accelerated shingle aging
voids manufacturer’s warranties
leads to other associated problems
What is the insurer’s payment process?
First check
The first insurance check for your roof replacement should be sent to the policyholder from the insurance company as soon as the insurance adjuster has completed their roof damage assessment.
Second check (recoverable depreciation)
The second check is held back until the repairs to your roof are completed. This second check is generally 10% to 40% of the total settlement and is usually referred to as “recoverable depreciation” or “withheld depreciation”. It is sent to the homeowner when the insurance company receives an invoice for final payment.
When you receive our invoice, immediately forward it to your insurance company. This will speed-up the depreciation payment. Please be aware that most settlement checks are valid for 180 days. If the homeowner allows this check to expire, the bank will not honor it and a rather lengthy process begins to have this check re-issued.
Furthermore, it is important to remember that the settlement is based on the cost to repair the roof with materials of “like kind and quality.” However, sometimes there is a discrepancy in the adjustment in cost, size of roof, or scope of damage between the homeowner and their insurance adjuster. In this case, your sales representative has the experience necessary to resolve these differences directly with your insurance adjuster. Everyone here at Bob Behrends Roofing and Gutters wants to make this entire process as easy for you as possible.
What if my insurance company is not paying enough to cover the amount estimated by the roofer?
If you are going with a reputable roofing company they should be able to review your insurance papers and let you know if there is anything missing from your insurance quote. At that point, and with your permission, your roofing contractor should be able to reach out to your adjuster and let them know any discrepancies along with any code requirements that may be missing from their original adjustment. These code requirements will require documentation from the municipality where your home is located which your contractor should be able to provide.
Why do insurance companies withhold depreciation?
It is not unusual for insurance companies to withhold depreciation – that is, the second check or balance for the roof replacement or repair. They do this because of fraudsters. The insurance company wants to ensure you’re going to spend that money on actually replacing or repairing your roof and no more. By withholding funds until they receive the final invoice from the roofing company, they can make sure they don’t overpay.
What are the major types of residential insurance policies?
There are two major types of residential insurance policies;
Actual Cash Value (ACV)
Replacement Cost (RCV)
Actual Cash Value
With an ACV policy, your roof will depreciate in value each year for 10 years. As a result, if your roof has sustained any damages, you will only receive a check for the depreciated value of your roof.
Replacement Cost
If you carry a RC policy, your insurance company will cover the cost to replace your roof, minus your deductible. In addition, home insurance policies that are “replacement cost” will generally pay two installments for a new roof.
How to calculate Actual Cash Value and Recoverable Depreciation
Actual Cash Value example and formula
Let’s say you put a new $10,000 roof on your house 5 years ago and your roof was just destroyed by a hail storm. Let’s also assume your 5 year old roof was average asphalt roofing shingles, which lasts about 20 years. Because your roof was only 5 years old when the hail storm hit, the Actual Cash Value would be $7,500. Accordingly, the recoverable depreciation would be $2,500. This is the difference between the $10,000 replacement cost and the actual cash value.
Here’s the formula:
R x (E – C) / E = ACV
10,000 x (20 – 5) / 20 = 7,500 R = $10,000 (Replacement cost or purchase price of the roof)
E = 20 years (Expected life of the roof)
C = 5 years (Current life of the roof)
Actual Cash Value is calculated by subtracting the current age of your roof from the expected life of the roof (e.g. 20 – 5, which = 15), times the replacement cost or purchase price of the roof (15 x $10,000, which = 150,000), divided by the expected life of the roof (150,000 / 20, which = 7,500.
How will you invoice me?
Once your project is approved by your insurance provider we will Invoice for the amount of the first check they provided along with your deductible. At this time we will order all your materials and have your project scheduled. Once the project is complete and you are 100% satisfied we will invoice the remaining amount due to your insurance company accompanied by photos of the completed project. This check can take up to 30 days for you to receive. There may be more than 2 checks if we have to suppliment any nessesary work that they did not include in their scope such as missing items or labor needed for unforseen damages like rotten decking and such.
Do you accept payments?
We offer financing through a 3rd party institution if you want to finance your deductible to a low monthly payment.
Is my new roof warrantied?
Yes. Your new roof will be covered by two warranties:
Workmanship – This is our warranty. It covers workmanship, labor, installation, but not materials. This warranty is valid for 5 years.
Manufacturer – This warranty is issued by the shingle manufacturer and covers the materials used. These warranties vary based on 25, 30, 40, 50, and lifetime years, depending on the product you install.
However, please remember that these warranties are not valid until your account is paid in full.
Will my roof be replaced or repaired?
Whether the insurance company replaces or repairs your roof depends upon what they find. It comes down to which is the least expensive – an entire roof replacement or repairing a small portion of your roof. Most hail storms are large. Large enough that they do damage to multiple houses, if not entire communities. Therefore, hail storms often damage entire roofs. As a result, most insurance companies will replace the entire roof.