Limited Loss Settlement

Limited Loss Settlement is similar to Actual Cash Value coverage in that it considers the roof's age and condition and may pay less than the full cost of replacement. Where it differs from Actual Cash Value is that the payout is based on a percentage that the company assigns to the type and age of the roof.

What do you need to know?

• Limited Loss Settlement eliminates some of the vagueness of the actual payout for a roof loss.  Actual Cash Value coverage provides loose guidelines for the actual payout for a roof loss. Companies base payouts on the age of the roof, condition, and type of roof. There is a lot of wiggle room there. Limited Loss Settlement eliminates that wiggle room.
• Some companies are requiring Limited Loss Settlement on older roofs, and some companies only have it as an option for now.
• This means that your policy could have been renewed with this coverage because of the age of your roof.

Example of a loss with Limited Loss Settlement –

• Wind/Hail damaged your 15-year-old asphalt shingle roof.  The company will refer to the Roof Surface Loss Percentage Table (see example below) and see that a 15-year-old asphalt shingle roof is assigned a 55% payout to repair or replace the damaged parts of the roof.  Meaning, that the company will only pay out 55% of the cost to repair/replace the damaged roof (minus your deductible).  If your damage is$5,000.  The company would pay out $2,750(minus your deductible).
• Example of a Loss Percentage Table:

Why are insurance companies doing this?

• Cost control—Amidst rising costs, insurance companies are looking for ways to manage expenses. Soaring materials and labor costs can impact insurance payouts, which ultimately translates to affordable insurance premiums.
• Risk management – companies can better predict their financial obligations by limiting payouts on older roofs.
• Depreciation—Older roofs have a higher depreciation rate and are considered high-risk due to potential underlying issues or nearing the end of their lifespan.

What can you do?

1. 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.
2. Review your policies, at minimum, annually to ensure that all coverages are correct, you are aware of your deductibles, and so that there are no surprises if you have a claim.
3. 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.
4. Ensure the gutters and downspouts are secure and have been cleared of debris.
5. Trim overhanging limbs, prune trees around the property as needed, and inspect trees for damage after a major storm.
6. 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.