Is a Roof Payment Schedule Right for Me?
We've got a saying here in Texas for when something doesn't seem right.
"That dog doesn't hunt."
When it comes to home insurance protection for your Texas home, you can't afford to have a dog that doesn't bark and chase the negative possibilities away.
One of those varmints exists in the form of a roofing claim gone bad.
As a Texan, you may already know:
- Hail claims make up a large percentage of insurance claims in Texas
- Homeowners and roofers took advantage of the claims process causing insurance carriers to raise their rates
- Insurance carriers can offer replacement value or actual cash value as the settlement for your roofing claim
Hail Claims
For most North Texans, it's not about if you are going to suffer hail damage to your roof, it's about when. If your home has sustained hail damage, you're probably wondering what to do next. hail damage is often covered by
homeowners insurance, but the claims process can be daunting. Here's a quick overview of what to expect:
- First, you'll need to file a hail damage claim with your insurance company.
- Be sure to include as much detail as possible
- Prepare to provide photos or video evidence of the damage
- Once your claim is filed, an adjuster will be sent to evaluate the damage and determine the cost of repairs
What Went Wrong?
Texas roofers got "creative" with roofing claims with a scheme known as "eating the deductible", whether known or unknown by the homeowner. This is how it worked.
- The roofing contractor would meet with the insurance adjuster and agree on a price for the repairs
- The contractor would then tell the homeowner that their deductible was "X" amount of dollars and that they would need to pay that out-of-pocket
- The contractor would then complete the repairs, but instead of billing the insurance company for the full amount, they would only bill for the remaining balance after the deductible was deducted
- The contractor would pocket the deductible
This scheme went on for years until insurance companies began to catch on. In many cases, the contractors would even provide the adjusters with false invoices showing a higher repair cost, in order to justify the deduction of the deductible.
Needless to say, this was all illegal and resulted in many roofing contractors getting into hot water with both the insurance companies and the law.
What Options Do You Have?
There are two ways an insurance company can settle your claim:
- providing full replacement cost
- providing actual cash value
If you have replacement cost coverage, your insurance company will provide you with the full amount needed to replace your damaged roof. This coverage is often more expensive than actual cash value coverage, but it provides greater protection in the event of damage.
Actual cash value coverage will only reimburse you for the depreciated value of your roof. This means that if your roof is damaged, you will only receive a portion of the cost to replace it. This coverage is often less expensive than replacement cost coverage, but it does not provide as much protection in the event of damage.
What is a Roof Payment Schedule?
Basically, it is the insurance carriers' way of making the actual cash value option sound better since ACV is now saddled with a bad connotation.
There are a few things to keep in mind if you're considering a roof payment schedule:
- Not all insurance companies offer this type of agreement, so be sure to check with your insurer to see if they do
- A roof payment schedule is not a guarantee that your roof will be replaced for free. Your insurance company may still require you to pay a deductible, and they may only cover a portion of the cost of replacement.
- The amount of money the insurance company pays towards roof replacement costs will generally decrease over time. If your roof is 15 years old, your insurance company may decrease the amount of money due to you by 75 percent
- A roof payment schedule can allow a way to save money on your homeowner's insurance, but it's important to understand this option may end up costing you more in the long run
All this to say, when it comes to a hail insurance claim if a roofing contractor offers to "eat the deductible" and a roofing payment schedule is offered to you by your insurance agent instead of full replacement cost, those are two dogs that don't seem to hunt very well.
At Insurance For Texans, we want you to have the type of coverage we look to have for ourselves, our family, and our other interests.
If you have any doubts about your current coverage or are due a new look, let's talk about it.
The contact form at the top of the page will help us get to know you and your situation a little better.
If you don't know what it means to have True Texas Insurance, well, we can help you there.
This dog hunts like a champion.
