Will my insurance company pay for my roof to be replaced?

Yes, if the damage is a covered peril under your homeowners’ policy, such as an act of nature like wind or hail and if repairs to the roof would not be feasible.

Does the age of my roof matter?

No, the age of the roof will not determine if you get a claim or not. The question will be, ‘is there damage and is it covered under your policy” However, the type of policy you have will determine the amount you are paid.

How much will I have to pay out-of-pocket?

This depends on the deductible you have selected as well as whether you have replacement cost coverage or an actual cash value coverage on your policy. If you have replacement cost coverage, your total cost would only be the amount of your deductible. If you have actual cash value (ACV) coverage, the insurance company will subtract your deductible from the total repair or replacement cost amount as well as a portion to cover the depreciation on the roof.

Depending on the age of the roof, with an ACV policy you could end up owing approximately 50% of the amount needed to replace the roof. Be wary of claims to “eat the deductible” on your roof.

To “eat” or “waive” the deductible one has to bill the insurance company differently than what he is actually charging. This is fraud and is unlawful. Additionally, he may not do all the work or do it as well as he would if he were being paid the actual or fair market value amount. Remember, you get what you pay for and most people will perform at a lower level if they are being paid at a lower amount. Likewise, they do less when paid less. Find a roofing contractor you trust and allow him to work for your getting you the most out of your claim and putting your roof back as good or better than before.

If I get bids lower than what my insurance company paid, can I keep the difference?

It all depends on how you are paid.

In rare cases, you could possibly keep the difference. Here’s an example. The insurance company paid you in full, less your deductible, and the amount you owe for the work performed was less than the insurance payment. This is extremely rare and may be because the work performed was less than what the insurance company paid for or anticipated to have done.

In almost all other cases, the answer is no. The reason is because the way the insurance company makes the payments. Payments are made in one of the two following ways.

If you have an ACV, or actual cash value policy, the insurance company pays you the full cost of replacement less depreciation and less your deductible. See example below.

$10,000 assessment to replace the roof
– $5,000 in depreciation
-$1,000 deductible
$4,000 net payout

In this scenario, you are left with much less than the actual cost to get the work done. There is no money left over to keep any difference. This policy usually offers lower premiums…hence, less payout.

If you have an RCV, or replacement cost value policy, you would be paid the full cost of replacement less your deductible. See example below.

$10,000 assessment to replace the roof
– $1,000 deductible
$9,000 net payout*

Now in this scenario most folks begin the process of getting quotes… or shopping for the insurance company. They assume if they now get the job done for $8000 they can pocket the difference between the $9,000 net payout and the $8,000 actual cost.

However, the net payout is made in the form of 2 payments; the initial payment and the recoverable depreciation amount (commonly referred to as hold back), which is not paid until the job is completed or invoiced for. So this is how the $9,000 would be paid; If the contractor or invoice was needed $10,000.

$10,000 assessment to replace the roof
-$1,000 deductible
$9,000 net payout*
-$5,000 recoverable depreciation (hold back) 2nd check
-$4,000 initial payment 1st check

If the job were done for $8,000 like mentioned above, it would not matter that the insurance assessment was $10,000. The Insurance would recalculate the final payment owed like this.

$10,000 assessment to replace the roof
$8,000 to actually replace the roof
-$4,000 initial payment 1st check
-$1,000 deductible
$3,000 balance 2nd check

By recalculation the amount owed the insurance saves $2,000 by making your second payment $2,000 less. They still paid the actual claim of $8,000 less your deductible of $1,000. Their payment now total $7,000 leaving you no money to “keep.”

Will I get the same quality as I have now?

Yes, unless you choose differently.  Most insurance companies pay for “like kind and quality”. If you substitute with lower quality roofing components to “save money” you will void your warranty with most manufacturers.

Can I request to get an upgrade on the materials being used?

That is always an alternative as long as you understand that any increase in grade or quality of materials that increases the price above what was comparable for the originally-existing roof will be your responsibility.

This is actually a great time to consider upgrades since the insurance company is going to absorb the bulk of the cost. If you suffer a subsequent covered loss on the new roof, you will be paid for what it takes to repair or replace that roof and its higher-grade materials. Sometimes a higher or better quality of roof can contribute to a lower premium for the same type of insurance coverage. Check with your insurance policy, agent, or an insurance claims specialist for clarification.

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