How is Your Roof Damage Covered by Home Insurance


How is Your Roof Damage Covered by Home Insurance

Roof damage is one of the most common home insurance claims. However, a few damaged shingles is often not a sufficient reason to file a claim. There are three levels of severity when it comes to roof damage:

  1. Light Shingle Damage - Damaged shingles (1-20 shingles), less than 50% of roof area, roof structure intact
  2. Heavy Shingle Damage - Damaged shingles, more than 50% of roof surface, roof structure intact
  3. Structural Roof Damage - Damage to roof structure and shingles (eg a tree fell on your roof)

If you have a roofer come out to give an estimate after a storm, the roofer will always tell you to file a claim with your insurance company (they get paid more). It may not be in your best interest to file a claim if there is only Light Shingle Damage. When the insurance adjuster comes out, they will look at the roof, see a few shingles need to be patched, and say the insurance company will cover the patching for around $500-$4000 (hardly enough to cover your new roof). In general you don't want to be filing small claims on your homeowners policy as they stay on your record for the next 5 years and could cost you more in future insurance premiums.

If you have Heavy Shingle Damage or Structural Roof Damage, you most likely want to file a claim. 

How much of my roof will be covered?

If the insurance adjuster determines you do need a new roof and it is covered, there is two factors that determine how much you will be paying out of pocket vs the insurance company:

  1. Your deductible for that specific type of damage
  2. Roof covered at Actual Cash Value or Replacement Cost

If wind damaged your roof, you may have a wind specific deductible that is higher than your normal deductible. This would be the amount you are responsible for in a claim scenario if wind was the cause of damage. Let's look at an example assuming your roof is covered at Replacement Cost:

Example 1
Coverage A: 300,000
Wind/Hail Deductible: $1,000
Roof Damage: Heavy Shingle Damage
Roof Coverage: Replacement Cost

Wind Damage: $15,000 for new roof
You Pay: $1,000
Insurance Pays: $14,000

Example 2
Coverage A: 300,000
Wind/Hail Deductible: 2% ($6,000)
Roof Damage: Heavy Shingle Damage
Roof Coverage: Replacement Cost

Wind Damage: $15,000 for new roof
You Pay: $6,000
Insurance Pays: $9,000

If you have an older roof, your roof may only be covered at Actual Cash Value. This means they are only going to cover the useful remaining life of the roof (not the full replacement). This is also called covering the roof at the depreciated value. Some more examples:

Example 3
Coverage A: 300,000
Wind/Hail Deductible: $1,000
Roof Damage: Heavy Shingle Damage
Roof Coverage: Actual Cash Value
Roof Age: 15 Years
Roof Useful Life: 25 Years

Wind Damage: $15,000 for new roof
Roof Depreciated Valued: $6,000 = (25yrs-15yrs)/25yrs*$15,000
You Pay: $10,000 = $1,000 deductible + $9,000 depreciation
Insurance Pays: $5,000

Example 4
Coverage A: 300,000
Wind/Hail Deductible: 2% ($6,000)
Roof Damage: Heavy Shingle Damage
Roof Coverage: Actual Cash Value
Roof Age: 15 Years
Roof Useful Life: 25 Years

Wind Damage: $15,000 for new roof
Roof Depreciated Valued: $6,000 = (25yrs-15yrs)/25yrs*$15,000
You Pay: $15,000 = $6,000 deductible + $9,000 of depreciation
Insurance Pays: $0

glee what GIF

Yes, insurance math is painful at times. Try to avoid actual cash value coverage on your roof, or you may be responsible for the entire bill of a new roof yourself. Of course, if there is no damage to your roof, you would still be responsible for full cost to replace the roof anyway.  

Hope that helps you better understand your home insurance coverage.

At your service,
Young Alfred