Intro to roof coverage trends
We want to inform you of 3 impactful trends regarding roof coverage that will affect all homeowners. Because you trust us to advocate for the insurance company, it is important that you are informed so that we can assist you in making the best decisions for your financial situation.
Trend 1 – Replacement Coverage (RC) changing to Actual Cash Value (ACV)
- Replacement Coverage means your insurance will pay to replace damaged property with new items of similar kind and quality without deducting depreciation. For example, if your roof is damaged in a storm, replacement coverage would pay the full cost of a new roof.
- Actual Cash Value means your insurance will pay the replacement cost of your damaged property minus depreciation. This means you'll receive less money than it would cost to replace the item. For example, if your roof is damaged in a storm, ACV coverage would pay only for the depreciated value of the damaged portion after considering the roof's age and material.
Trend 2 – Limited Loss Settlement (LLS)
- Limited Loss Settlement is similar to ACV in that it considers the roof's age and condition and may pay less than the full cost of replacement. Where it differs from ACV is that payout is based on a percentage that the company assigns to the type and age of the roof—i.e., there is less guesswork.
Trend 3 – Increased Wind/Hail Deductibles
- The Wind/Hail Deductible is a separate deductible applied to your home policy in case of a loss due to wind or hail.
What do you need to know?
Trend 1—Some companies are converting roof coverage from replacement to ACV at renewal if the roof is over a certain age.
Trend 2—Some companies offer Limited Loss Settlement option to eliminate some of the vagueness in ACV claims settlements.
Trend 3—Many companies now offer, and sometimes require, a separate Wind/Hail deductible, which is higher than your policy deductible. It could be a flat amount or a percentage of the dwelling. These increased deductibles are automatically added to some policies at renewal.
In all cases, this could mean that the amount you pay for a claim has gone from a standard home deductible to a higher separate deductible AND the difference between the coverage amount and the replacement value—sometimes many thousands of dollars.
Why are insurance companies doing this?
For all three trends, the impact of weather events has changed the way insurance companies handle roof damage claims due to wind and hail. Due to the increased frequency and severity of weather events across the country and escalating costs for materials and labor, most companies have begun introducing new ways to settle roof claims to continue offering viable and affordable coverage options to clients.
What can you do?
- Please make sure that we have the most up-to-date year that your roof was last replaced. Newer roofs have fewer restrictions on coverage and prices.
- Review your policies, at minimum, annually to ensure that all coverages are correct and so that there are no surprises if you have a claim.
- Have your roof inspected by a trusted local roofer. Address any loose, broken, or worn shingles, loose nails, cracked sealant, flashing, moss growth, or other repairs now.
- Ensure the gutters and downspouts are secure and have been cleared of debris.
- Trim overhanging limbs, prune trees around the property as needed, and inspect trees for damage after a major storm.
- Call us. We want to help.
As we navigate the complexities of the present, we remain steadfast in our commitment to your future. Looking to the horizon, we see a landscape of opportunities and challenges that we are eager to explore alongside you. Your trust in us fuels our dedication to seeking out the paths forward.
