Most homeowners in the country carry some form of homeowners insurance to protect what is often their most valuable asset. These insurance policies are in place to provide protection and coverage in case all or part of the home or property gets damaged due to weather-related incidents and other events.
Damage that occurs to your home from a sudden event will, in most cases, be covered by your homeowners insurance policy, and that includes one of the most crucial “systems” in your home — its roof.
If your roof suffers damage from a covered event, it may require extensive repairs or even full replacement. With these projects being quite expensive — yet necessary — a major question homeowners have is whether insurance will cover the total cost of roof replacement.
Below, we’ll dive into all the general details of homeowners insurance as it relates to roof replacement.
How Is the Roof Covered in a Homeowners Insurance Policy?
As one of the most, if not the single most, important structural part of your home, the roof is included in the main dwelling coverage of your homeowners insurance plan. This makes up the largest part of your insurance policy, both in terms of the associated coverage provided to you and the monthly premium you have to pay.
Your homeowners insurance policy will list a coverage limit for dwelling coverage. This amount typically covers you up to a maximum amount that it might take to completely replace your home if it were ever to be uninhabitable due to a sudden event.
This amount is much greater than the cost to replace your roof, so you shouldn’t ever have to worry about whether you have sufficient coverage to pay for complete roof replacement.
The question, in most instances, is whether the damage that happened is considered a covered event and, if so, will your insurance company pay for an entire roof replacement or only a repair?
What Are Covered Events?
Every homeowners insurance policy will include a list of covered events when it comes to roof damage. These are most typically sudden events that result in the roof being damaged in a short period of time.
Normal wear and tear that a roof will sustain over time is not covered under your insurance policy.
What is typically covered are events that Mother Nature causes. This can include rain, wind, ice, sleet, hail and more that cause direct damage to your roof. It can also be winds that knock down a nearby tree or branch that falls on your roof.
It can also include weather-related events such as wildfires, or other freak accidents such as debris that falls on the roof from an aircraft or nearby explosion.
The first step in determining whether the damage will be covered is referring to your insurance policy to see if the damage was caused by a covered event. If it was, then the next step is determining what the covered amount will be.
How Insurance Pay for Roof Replacement?
Once it’s been determined that the roof damage was caused by a covered event, the insurance company will need to investigate what the solution to the damage is. They will do this by sending an insurance adjuster to your home to inspect the damage in-person.
This adjuster will inspect your roof by climbing onto it — if it’s safe — and possibly even flying a drone above your home to see the full extent of the damage. Through this inspection, they will determine whether the recommended course of action is a full roof replacement or more minor repairs.
They send a full report to your insurance company, which will then issue a final claims decision to you based on this information. The decision will include what the recommended repair is and what the subsequent amount of money insurance will pay you to cover the cost of the repair or replacement.
Keep in mind that whatever the decision is, the amount of money you receive will be minus your deductible. If you have a $1,000 deductible, for instance, and the coverage you receive is $15,000, you will only receive $14,000 and must pay that first $1,000 on your own.
It’s also important to understand that certain causes of damage may have a higher deductible. In some policies, the deductible for any damage that is caused by a hailstorm or hurricane might be higher than damage caused by a falling object.
Does Your Insurance Pay ACV or RCV?
Regardless of the claim decision, another factor in whether your insurance policy will cover the total cost of roof replacement will depend on whether your insurance pays ACV (actual cost value) or RCV (replacement cost value).
RCV is the simplest and most straightforward type of coverage. It pays the total cost of your roof replacement with a new roof that’s comparable to the roof you currently have. This estimate is based off the cost of roofing materials today, as well as the labor costs for getting it installed.
This type of policy is usually more expensive than one with ACV, but it also means that the only expense you have to pay for a roof replacement is your insurance policy’s deductible.
With ACV coverage, your insurance company will pay the value of your roof at whatever its depreciated value was before the damage occurred. This calculation is done on an annual basis.
So, for instance, your roof might depreciate in value by 5% every year after it’s installed. This means that if your roof is valued at $20,000 when it’s new, it’ll depreciate by $1,000 ever year. When the roof is seven years old, then, it’s ACV will be $13,000.
In this case, your insurance company would only pay you out that $13,000 for your roof replacement — even if the total cost of the replacement is $20,000. This means that you’ll have to come out of pocket to cover the difference in those two amounts.
Insurance policies that use ACV instead of RCV have lower monthly premiums, but there are obviously pitfalls.
Work with a Local Roofer You Can Trust
A great way to improve your chances of having your roof damage covered by your insurance company is to partner with a local roofing company that you can trust and that is experienced with insurance claims. This roofer can inspect the roof on their own, and then work in conjunction with the insurance adjuster to recommend the best path forward.
When you work with The Roof Resource, for example, you can rest assured knowing that our professionals have plenty of experience working with insurance claims and can help get your claim fully approved.
Our 100% virtual quote process and unique approach to roof replacement projects also result in your new roof cost thousands less than typical retail cost.
To learn more about what we do, and to get a free quote, please contact us today.