Roof Insurance Claim Process and Questions
Below is the information you will find in this article.
- Will my premium increase if I file a roof insurance claim?
- What is the insurance company looking for?
- When will I receive my first insurance check for the roof replacement?
- What if my insurer is not paying enough to cover the amount estimated by the roofer?
- Why do insurance companies withhold depreciation?
- What are the major types of residential insurance policies?
- How to Calculate Actual Cash Value and Recoverable Depreciation?
- How will you invoice me?
- Do you accept payments?
- Do I need to get multiple estimates?
- Is my new roof warrantied?
- Will the insurance company replace my roof or repair it?
- Do insurance companies offer a rebate for an impact resistant roof?
- Links to manufacturer's websites and their respective warranties.
- What is the mortgage company's procedure?
If a hail storm has recently passed through your neighborhood, you're probably wondering if your roof has been damaged and if you should file a roof insurance claim.
In this article, we answer popular roof insurance claim questions such as "What is the insurance roof replacement process?" and "When will I receive my first roof insurance claim check?"
We also define common roof insurance terms so when you contact your insurance company, you're a little more prepared.
Feel free to ask a question or leave a comment below.
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.
Damage from small hail on an old asphalt shingle roof.
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?
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 (RC)
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.
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.
Do you accept payments?
Yes. We will accept a partial payment, or your first check, upon completion of your roof. The balance is expected when you receive the second check. Please make arrangements with the insurance company, bank, and mortgage company so funds will be available to you at this time.
However, if payment in full is not made within 30 days of completion, there will be a 1.5% penalty per month until the balance is fully paid. In addition, a lien may be filed on your property to protect us for the work performed.
Do I need to get multiple estimates?
If you have a roofing company you've been working with for years and you trust them, then there's no need to waste your time and other's getting multiple estimates.
If you don't have a roofing company that you trust, however, then you should get a few estimates. When you're shopping around for a roofing contractor, however, don't just pick the least expensive one. In addition to their price, you should also choose one that's licensed and insured, has a lot of experience, is qualified and professional, warranties their work, communicates well, etc. Most roofing companies offer no obligation, free esimates and inspections. We are no exception.
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.
Do insurers offer a rebate for an impact resistant roof?
The number of roofing products available continues to expand every year. As roofing technology continues to increase, so does the search for the perfect roof:
- one which looks beautiful
- maintains high property value
- is cost effective
- very durable
- resistant to hail
- most importantly, maintenance free
Some insurance companies will give a discount for a hail-resistant roof. This is usually defined by roofing material that undergoes an Underwriters Laboratory test called UL 2218. In this test, steel balls of different diameters and weights are dropped from different heights onto roofing material and then the damage incurred is assessed. Based on the damage made by the steel balls, each material is given a rating that the material manufacture must agree with for the insurance company to participate in their discount program.
Unfortunately, the majority of manufacturers have chosen not to participate in these discounts programs.
However, we work with some manufacturers that have produced the following Impact Resistant shingles and also offer these discounts.
The links below will take you to the manufacturer websites and their respective warranties.
|Malarkey, Alaskan||3-Tab||35yr Warranty|
|CertainTeed, Landmark IR||Dimensional||Lifetime Limited Warranty|
|Owens Corning, Duration Storm||Dimensional||Lifetime Limited Warranty|
|Malarkey, Legacy||Dimensional||50yr Warranty|
|DaVinci Synthetic Shake & Slate||Synthetic Shake/Slate||50yr Warranty|
|Decra, Stone Coated Steel||Metal||50yr Warranty|
|Boral Roofing Tile (Monier Lifetile)||Tile||50yr Warranty|
What is the mortgage company's procedure?
Most insurance companies will usually include both the homeowner’s and the mortgage company’s name on the first, and sometimes the second, check. Mortgage companies require the homeowner to endorse this check and send it to them. However, each mortgage company has its own procedures for releasing funds back to the homeowner. Normally this is only after repairs have been done. The best thing to do is ask your mortgage company what documentation they require to release these funds.
Please be aware that most settlement checks are valid for 180 days. If the homeowner allows this check to expire, the mortgage company will not honor it. Therefore, please ensure the mortgage company receives this check before it expires.
Some mortgage companies will require extensive documentation, and possibly an inspection by one of their representatives. Because we have assisted many homeowners with this process, we are familiar with the requirements. Your sales representative will be happy to assist you however possible. We have found that faxing documentation directly to your mortgage company can be a big time saver to homeowners. We want to help your project move along quickly and efficiently and are willing to help in whatever way we can during this confusing process.