Your Roof and Your Homeowner’s Insurance: 5 Things You Need To Know

Understanding what is covered by homeowner’s insurance is vital. It’s important to know what is covered versus what needs to be covered prior to an incident — meaning, homeowners will want to make sure they are fully covered prior to anything happening. This is especially important for people here in Florida where many fall victim to devastating weather. Weather and fire damage can destroy homes, requiring homeowners to get roof repairs.

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The Insurance Information Institute explains homeowner’s insurance coverage is available to homeowners for damage due to unexpected events. “Homeowners coverage provides financial protection against loss due to disasters, theft and accidents. Most standard policies include four essential types of coverage: Coverage for the structure of your home; Coverage for your personal belongings; Liability protection; Coverage for Additional Living Expenses,” the Insurance Information Institute said. 

When it comes to coverage for a homeowner’s roof, they’ll want to look closely at their policy for the structure of their home. Here are five things to consider.

1)  What Coverage Should I Get?

There are many things to consider when looking over policy options. The Insurance Information Institute says that homeowners will want to get enough coverage to rebuild their entire house. “If disaster strikes, you’ll want enough homeowners insurance to rebuild the structure of your home, to help replace your belongings, to defray costs if you’re unable to live in your home and to protect your financial assets in the event of liability to others,” the Insurance Information Institute said.

Getting enough coverage to rebuild the home is important because, “your homeowners policy pays to repair or rebuild your home if it is damaged or destroyed by fire, hurricane, hail, lightning or other disasters listed in your policy,” the Insurance Information Institute said. This means if fire or weather destroys the home, the insurance company will cover the cost to completely rebuild the home. In Florida, there is a risk of fire, hurricane, hail, lightning and more — Florida homeowners will want to make sure their home is completed covered. 

Some other things the Insurance Information Institute says homeowners should consider is making sure homeowners have coverage for any detached structures, garages, sheds, etc. Homeowners also need to know that, “a standard policy will not pay for damage caused by a flood, earthquake or routine wear and tear,” the Insurance Information Institute said.

2)  What Is Protected?

What is protected by homeowner’s insurance coverage? Well, this depends on the type of policy — and as the Investopedia puts it, “all insurance is definitely not created equal. The least costly homeowners insurance will likely give you the least amount of coverage, and vice versa.” There are many different insurance companies and policies out there for homeowners to choose from. However, there are eight standard types of policies most insurers use. Depending on what kind of coverage a homeowner needs will decide the coverage that homeowner should invest in. Investopedia breaks it down as three main levels of coverage: Actual cash value, replacement cost value and Guaranteed (or extended) replacement cost value. 

Each homeowner will have to decide if they want their insurance to pay out for the damage minus the depreciation of the home, the damage of the home at the original price, or a full replacement for the damage at today’s market price. 

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3)  What Is The Difference Between ACV, RCV and Guaranteed?

Insurance companies will offer many types of coverage. As a homeowner, you can specify coverage where you need it. An insurance agent can help homeowners decide what coverage they need. Knowing the difference between ACV, RCV and Guaranteed can help homeowners know what to aks and consider when going in to speak with an insurance agent about coverage options. 

Actual Cost Value 

ACV coverage provides standard coverage for a home. The biggest thing to consider with ACV is depreciation. This is because this policy pays for the homeowner to fix damages at the current worth of the home. For example, if a tree falls on a person’s 10-year-old roof damaging the entire roof, the insurance company would give that homeowner money equal to the value of their 10-year-old roof. 

The Mutual Benefit Group, a mutual insurance company, explains it like this: “If your policy is for ACV, your insurance company will pay the actual cash value of your roof at the time of a covered loss. This means the actual cash value minus your deductible amount minus the depreciation cost according to the age of your roof.” 

While ACV coverage is many times less expensive upfront, homeowners may end up paying thousands of dollars if something happens to their property. 

Replacement Cost Value

RCV coverage also provides standard coverage for a home, based on what the homeowner has covered. What is important to understand here is that this policy pays for the price of the property at the condition it is now, or when that homeowner got the policy. For example, if a tree falls on a person’s 10-year-old roof damaging the entire roof, and they got their RCV coverage 10 years ago when the roof was new, the insurance company would give that person the money equal to the original price of their roof.  

The Mutual Benefit Group explains it is like this: “If your policy is for RCV, your insurance company will pay the replacement cost value of your roof at the time of a covered loss. This means the replacement cost value minus your deductible. There is no deduction for depreciation under the RCV valuation method.”

It is worth keeping in mind that a new roof today probably costs more than it did 10 years ago. The homeowner will most likely have to make up that cost difference. 

Guaranteed Replacement Cost Value

This is an extended policy and is usually the most expensive. However, it gives you the most coverage. It guarantees that the insurance company will pay for you to fully get your home repaired. Using the example from above: the homeowner would get the money for a brand new roof despite the fact their current roof is 10 years old. The homeowner doesn’t need to worry about depreciation costs or the price difference of materials through the years. The only thing the homeowner will need to pay is their deductible. 

Investopedia explains it like this: “The most comprehensive, this inflation-buffer policy pays for whatever it costs to repair or rebuild your home—even if it’s more than your policy limit. Certain insurers offer an extended replacement, meaning it offers more coverage than you purchased, but there is a ceiling; typically, it is 20% to 25% higher than the limit.”

4)  What Is Not Protected

What is not protected really depends on each individuals policy. Standard policies coverage most fire, weather, theft and accident damage. Hurricanes, flooding, earthquake and war damage are many times not covered in standard policies. 

Some additional factors homeowners will want to consider is the age of their property. Insurance.com explains that insurancers factor the age of a roof heavily when creating coverage policies. “Insurance companies view roofs as one of the most important parts of a home. Roofs protect homes from the elements and can prevent home insurance claims … If you have a damaged roof, you’re likely going to have problems within your home that will lead to more claims. With that mind, many insurers are becoming more restrictive with roof coverage. Some insurers won’t even cover your home if it has an older roof,” Insurance.com said. 

This is why it is important for homeowners to take care of their roof, clean their roof and get yearly inspections done on their roof. Allstate expands on the importance of homeowners taking care of their roofs. Allstate says that damage because of neglect or wear and tear is often not covered. “homeowners insurance generally does not cover damage resulting from lack of maintenance or wear and tear. Instead, it typically helps pay to repair sudden, accidental damage. So if its age or an unresolved maintenance issue are to blame for your leaking roof, homeowners insurance likely won’t pay to repair the leak or the resulting damage,” Allstate said. 

Check into Cache Roofing’s Worry-Free Roof Program that helps customers save time, money and energy by having a professional maintain, inspect, and repair their roofs for them each month.

The Insurance Information Institute says homeowners should check the condition of a roof because a roof in good condition matters to insurance. A new roof or a roof that has disaster-resistant elements will get better and potentially less expensive coverage. “Depending on the type of roof and whether or not it’s made with fire and/or hail resistant materials, you may even qualify for an insurance discount,” The Insurance Information Institute said. 

5)  What To Do If You Need To Make A Claim

Homeowners who unfortunately need to make a claim should first look at their policy and see what is and isn’t covered. From there, they should call their insurance agent and ask questions to get any clarification they need. 

Once the homeowner understands their policy and what is covered, they can make the claim. This involves providing documentation of the damage. “No matter the age of your roof, the adjuster will require extensive documentation and proof that your roof is indeed damaged to the point of needing repair,” List With Clever, a real estate company, said in their blog. “Take pictures of exterior and interior damage. If damages were caused by a natural occurrence, such as a hail storm, snowstorm, hurricane, or tornado, pull any corresponding news articles related to the storm to prove time and date of the incident,” List With Clever suggests. 

Remember, some policies require homeowners to make claims within a certain timeframe of damage. It’s important to have before and after pictures of the roof to submit. Submitting evidence can help homeowners get the most for their claim. 

Once the claim has been made, the insurance company will send out someone to make an estimate. Homeowners can appeal the estimation if they are unhappy with it. 

In summary, homeowners should invest time in knowing their policy and making sure their policy has appropriate coverage. This can eliminate headache and unexpected expenditures later.

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