Whenever heavy inclement weather strikes, we find ourselves checking for leaks or any other issues our roofs may have sustained. After all, that is the first layer of protection that our homes have. However, in the event of finding an issue with a roof, what role does insurance play in resolving it?
Can I make money off my insurance claim? Insurance is not a quick-money scheme in the event of an accident or claim. There aren't roundabout, "thrifty " ways of getting reimbursed by an insurance company for a roofing claim while pocketing most of the check. The money you receive is meant to cover the cost of getting a replacement or repair done right the first time so that all you'll have to pay out-of-pocket is your deductible. There's no such thing as making money off of an insurance claim.
There can be confusion about the amounts received in checks from the insurance company whenever a roofing claim happens. There is also the occasional pause where you wonder if you can get the job done cheaper but still correctly. If you're having questions about how roofing claims work and whether or not you've got a chance to get some easy extra cash, read on for a better explanation of how the process works and why using the checks as they're intended will save you money in the long run.
What Insurance is Supposed to Do
In short, insurance is meant to restore you to the state you were in prior to an accident. No insurance company on earth is going to rebuild your home bigger or better than it was before a claim. They will all put it back together with "like, kind and quality" materials.
Occasionally, you'll find that the materials used for your house are no longer being manufactured or are simply out of date, in which case your adjuster determines what the quality of those materials was and what an equivalent product in today's standards would be.
Also, you'll want to make sure that your home insurance policy has Replacement Cost Coverage (RCV). Most do. You also want to have "Ordinance or Law" coverage.
Replacement Cost Coverage (RCV) puts your home back together in the state that it was in at the time that it was built. Ordinance or Law coverage is important because if a new ordinance has been passed since your home was built, the insurance company typically wouldn't pay for that new, additional requirement. If you have Ordinance or Law coverage, they factor that into your home's replacement or repair.
Here's an example: Scottsdale, Arizona passed an ordinance that all newly built homes must have fire sprinkler systems installed. The older homes of this city (which were grandfathered into this new ordinance) were not required to have the sprinklers installed.
However, if one of these older homes burn down today, the insurance company they're with will rebuild it back to the standards of the 1940s, or whatever year the home was built. They will not pay for the now-required sprinkler system to be installed unless the owners have the Ordinance or Law endorsement on their policy.
Definition: Ice and Water Shield is a layer of water-proof material which goes on a roof during the roofing process. This layer is typically self-adhesive and prevents leaks from rain or melting snow.
A more common example of Ordinance or Law coverage in the northern United States is the ice and water shield code requirements. Many states have updated their code requirements for ice and water shield. If you do not have Ordinance or Law Coverage on your home policy, this uncovered change could cost you (on an average-sized roof) $3,000-$4,000 out-of-pocket, instead of the insurance company covering it with a small endorsement.
How Some People Hurt Themselves When Trying to Profit From a Claim (Or While Trying to Save Their Insurance Carrier Money)
In the claim process, trying to save money in the short-term (either for yourself or for the insurance company) is often devastatingly expensive in the long run.
Here's an example: One of my clients had a friend who had some experience installing siding on homes. My client thought he could have his friend make the repairs for cheaper than was stated in the final invoice, and then he could keep the difference on the estimate. So, he and his friend did all of the work themselves.
It may have been done correctly, it may not have. However, he did not know he needed to submit supplements for the Ordinance or Law coverage (which he did have on his insurance policy). He also did not know he needed to send his insurance providers the final invoice as proof that the work was done, which would typically result in the insurance company sending the remaining check to cover any differences. In the end, he spent all of the money that was allotted to the roof.
I couldn't figure out why the insurance company hadn't finished sending all the money for the roof repair. As it turns out, they hadn't sent the money because they had no idea the work was completed. Once he finally put together an invoice and sent it in, they reduced the claim amount from what their adjuster had initially estimated (for having a professional do it) down to what he had actually spent on the repairs himself.
For this example, let's say the insurance company had estimated $15,000 to replace the siding on the entire house, but he and his buddy were able to get it done for $8,000. The insurance company is always willing to spend less than the amount they originally estimated. So, when the insured sent in that final receipt showing the work was done for less than the amount the adjuster had estimated, his insurance provider was more than happy to pay the lesser amount.
How did this hurt the client? He jumped through hoops. He took off work to install something himself, and he installed a product that he had never installed before. It's likely that it was installed incorrectly, as he and his friend had limited experience compared to a professional siding installer. It is also likely that he will have issues with it in the future, leading to another claim. There could be water damage if he failed to install a vapor barrier. He could have a product that is either falling off or just looks wrong because it was installed by an amateur, which creates diminished value for his entire property when he goes to sell it.
I have seen clients non-renewed by their insurance company because they did work like this themselves, and whose homes ended up with chronic leaking or damage. All because it was installed incorrectly.
Here's another problem similar to trying to make money off of a claim: When a client shops around with roofing contractors to get multiple "bids," they often hurt themselves in the long run.
Why? Shouldn't a client look at all of his or her options? The first flaw in this thinking is that the insurance claim is based only off of the contractor's estimate. That's not the case. Insurance companies have set standards and they use professional software to estimate the replacement value of any insurance roofing claim. This first estimate is done by the adjuster to get the job done right. The numbers aren't written up by the contractor's estimate (at least, they shouldn't be).
The only thing your contractor can do to adjust the provided estimate is to document anything that was not included in the original claim estimate which may have been overlooked or forgotten. They can then submit a request to the insurance adjuster to update the claim. Therefore, the only changing of the claim estimate is done by the adjuster.
Here's the second flaw with "bidding" contractors: Choosing to go with the "cheapest bid" is often the biggest contributing factor to why a home was damaged in the first place. If you're getting an estimate which is lower than what the professional adjuster estimated, then you're likely getting an inferior product. It often means this particular contractor is looking for ways to cut corners, which is not what you want for your roof.
As we learned in the last example with my client and his siding-savvy friend, the insurance company is always happy to pay less. However, looking for corners to cut and the cheapest options available usually ends with the roof leaking again within the next three years.
At this point, the insurance company and the homeowner have to go through this entire process all over again. The insurance company has another entire claim to pay for and file. Insurance rates could go up having yet another claim on the homeowner's record in such a close time period, and they also have another deductible to pay (not to mention more contractors and construction going on in their house.)
Long story short: your insurance company is contractually obligated to get your roof or home repaired correctly. The adjuster has carefully estimated and set money aside for a professional contractor to have the work done correctly the first time.
It is in the insurance company's best interest to have a professional get the work done correctly the first time so that they do not have to pay out on the claim again either six months or five years down the road. They'd prefer to pay a little more upfront for a top-notch contractor who will correct any issues and guarantee the quality of the materials used, instead of getting it redone the next time it hails. This is also in your best interest.
Some roofing products today, such as Malarkey, have warranties for up to 50 years. However, manufacturers can only honor that warranty if their product was installed correctly and by certified installers.
Certified Contractors and Where to Find Them
When it comes to choosing a roofing contractor, here are five quick tips:
1. Check out their Google reviews. Keep in mind that Google reviews are people's opinions, and there are some people who are simply not going to leave a positive review for any company. You have probably dealt with these people in your own workplace. Make sure that when you read a positive or negative review, you can see that it's coming from a genuine person who has left both positive and negative reviews in the past and for several places.
2. Check with the product manufacturer to see if the contractor you are looking at is actually a certified installer. This can be done with an internet search or a quick phone call.
3. Call the local roofing supply house. You can ask for their honest opinion of the contractor and the materials they recommended.
4. If you can find one, pick a contractor that specializes in working with insurance carriers who has detailed knowledge regarding the insurance claims process. This will make everything much smoother and will allow you to rest easy knowing it's not all on your shoulders.
5. Find a contractor who is HAAG-certified. You could also look for a certified installer of the brand of shingles you would like.
In short, you may be working too hard to fix your roof problems. If you follow these five steps, pay your deductible, and allow the insurance company and the certified contractor to work together to get the job done quickly and correctly, you'll have your roofing problems fixed with care and thoroughness. You'll have nothing to worry about.
About Home Insurance Deductibles
Definition: A deductible is the amount of money a policyholder must pay out-of-pocket toward damages or a loss before their insurance company will pay the remainder for a claim.
You do not actually pay your deductible to your insurance company, as you would a premium or bill. If you file a claim and it is covered, the deductible is subtracted from the amount of the claim.
For example, say you have a $500 deductible and you file a claim for $10,000. Your insurance company would pay you $9,500 for that claim. This keeps money from getting sent back and forth over and over, simplifying the entire process.
There are generally two types of deductibles: a dollar amount and a percentage-based amount. The difference between these is how your deductible is calculated, and there are a couple of nuances depending on what your home is valued at. Once it has been calculated, the deductible amount that a homeowner pays to file a claim is fixed for the length of that policy.
I've had clients with both a fixed-amount deductible and a percentage-based deductible because of an endorsement they added onto their policy.
One particular client had a $1,000 deductible set overall for any home claims. She also added an endorsement onto her roof that made it a percentage-based deductible. This saved her about $30 per year on her premium but ultimately cost her an additional $1,500 above the $1,000 deductible in the event of a roofing claim.
Confusing? This was also very confusing for her. Let's talk about insurance policies and how they affect claims.
There's a myriad of options when you're choosing home insurance. You may have a policy that is actual cash value (ACV). In short, this means the insurance company is only going to pay you the depreciated value of your property in the event of a claim.
Here's an example of how ACV works: A storm damages your roof, it might cost you $15,000 to replace your roof because it's currently 30 years old. Your insurance carrier is only obligated to give you the $5,000, in total, that the depreciated roof is worth at the time of the accident leading to the claim.
Disclaimer: this is only an example of how ACV works. I don't know you or the depreciated value or the replacement cost value of your current roof.
If you have an ACV policy, be prepared to pay your deductible plus a large portion of your claim out-of-pocket.
On the other hand, there are replacement cost value (RCV) policies. Replacement cost value, as I stated earlier, provides enough money to rebuild your home back to the condition it was in when it was built. It does not factor in depreciation and is completely covered by your insurance provider, so you pay nothing out-of-pocket except your set deductible.
An RCV policy is obviously better than an ACV policy. Providing that your city hasn't passed any ordinances since your home was built, you should only have to pay your deductible. On that note, you should call your insurance agent to make sure you have a replacement cost coverage (RCV) policy on your home, and also that you have an endorsement called "Ordinance or Law" coverage.
If you do have a replacement cost coverage policy and an ordinance or law coverage endorsement, it's likely that your only out-of-pocket expense will be the set deductible for your policy. Once again, remember that the insurance adjuster has estimated the claim amount so that the contractor can install "like, kind and quality" materials on your home.
3784 E 175 N, Rigby, ID 83442
Why Choose Us:
Tyler Slade began in the roofing industry in 1997. He is a certified Malarkey contractor, HAAG-certified, and a professional insurance consultant. Tyler has received numerous awards in the insurance field. His understanding of insurance and roofing combined, allows him to better serve homeowners when dealing with roofing claims or repairs. Tyler and his wife, Sherida, have eight children. They enjoy hiking, traveling, camping, visiting historical sites, and playing board games together.
With over 20 years of project management, sales and marketing experience, Dee Armstrong brings the synergy needed to complete your roofing project. With over 13 years of college education, a Masters in Public Administration and a dissertation away from his PHD in Adult Education, rest assured that you will work step by step on the project with an accomplished professional. Dee and his wife, Sarah, have five children and enjoy spending time together playing games, competing in different sports, and working together.
Slade Roofing began when Tyler Slade, an insurance agency owner, became frustrated with contractors taking advantage of clients, talking clients into filing claims that they never should have filed, failing to show up on time, billing for more than they contracted, and taking longer on jobs than they estimated. The list of frustrations could go on. There had to be a better way. He reflected on his own experience as a roofer. It would be much better if the contractors were professional, understood the mechanics of insurance policies, and communicated effectively. Slade Roofing was born. Our philosophy is "Under-promise, over-deliver.” We replaced the “con” in construction with professionalism. You are going to love Slade Roofing.