When it comes to replacing your roof, you must decide whether to pay for it out-of-pocket, or to go through your home owners’ insurance carrier. Since roof replacement is a major part of why many people have homeowners’ insurance policies, filing a claim is the most common route. However, if you do choose to file a homeowners’ insurance claim for roof replacement, be aware that there are several factors involved in the claim process. For this reason, it is important to do your research in order to understand what to expect when preparing for a roof replacement insurance claim. Continue reading to review some of the most frequently asked questions regarding roof replacement and insurance claims.
My Check is Less Than The Cost to Replace My Roof. Why?
An insurance adjuster reveals his estimate for the cost of your roof, but then makes two major deductions: your deductible and depreciation/betterment. Continue below to learn the meanings behind them.
What Do All These Insurance Terms Mean? Betterment, Depreciation, RCV, ACV?
Depreciation is the loss of value in an asset, as a result of age, wear, and tear. In contrast, betterment is a term that refers to an improvement that adds to the value of a property or facility. The current retail cost to replace the total amount of damaged or defective roofing materials is called the replacement cost value, or RCV. The actual cost value is abbreviated as ACV, and represents the actual cash value of a roofing system. The ACV takes into account general depreciation. For instance, if a roof that is meant to last 50 years becomes totaled from hail after only 25, if the RVC is $30,000, the ACV is only $15,000. This depreciation is usually paid once a final invoice is submitted.
The Adjuster’s Estimate Does Not Seem Accurate. Is it a Final Estimate or Can I Dispute it?
A final estimate from an adjuster is not necessarily set in stone. If an estimate from your roofing company is different from your adjusters, there is no need to worry. It is important that your roofing contractor and your insurance adjuster communicate on several areas of concern, in order to reconcile some of the discrepancies in the final estimate. If you are compelled to dispute certain depreciations, you would need to file a claim within the company, work your way up through the chain of command, and present your evidence as to why the depreciation estimates are inaccurate or unreasonable. It helps to have your roofing contractor assist you with these types of claims because they can provide professional documentation of what they think is a fair resolution.
In Total, How Much Will it Cost Me to Replace My Roof?
With homeowners’ insurance, you will only be paying the deductible and any upgrades you choose. You might have to pay for the entire roof replacement upfront, and then get reimbursed for it through a check sent by your insurance carrier. Some insurance companies operate this way to avoid fraud.
I Found a Roofing Company That Says They Will “Cover My Deductible.” Is This Legitimate?
No one should pay your deductible except for you. If a roofing company advertises that they will “cover your deductible”, it is an unethical and improper way of doing business. A reputable roofing company will never advertise this. Furthermore, a sign allowance can be a disguise for a “cover your deductible” scam. If they offer a referral fee, in order for it to be legitimate and ethical, the fee must be the same whether a roof is purchased or not. Also, it must be reported as taxable income.