In Case of Storm Damage, Is Your Roof Repair Fully Covered?

Your home insurance policy might not fully cover the cost of repairing or replacing your roof- here’s how to tell. 

What is the difference between partial and full coverage for roofs and how do I know which my insurance policy covers?

With storm season around the corner the big question is, will your current insurance policy cover the full cost of a new roof in case of damage? Depending on your specific policy your insurance may cover the full cost of replacement, reimburse the depreciated cost of your ageing roof, or not cover replacement at all due to age/previous damage. Knowing the jargon used in insurance policies could be the difference between them writing you a $2,000 and $12,000 check when your roof is damaged during storm season. Learn the terms you need to know here:

ACV “Actual Cash Value”

When you see this term, read “depreciated value”. This policy covers the value of your roof in its current state. Everything depreciates over time and if your roof is 10 years old it will have less cash value today than it did when it was first installed. This value changes year after year even if you never adjust your insurance policy. They will be able to appreciate the current value of your roof whenever you call in for a quote and it will never be worth as much to them as what you paid for it on the day it was installed. 

If you choose Cash Value Policy it is important to know the rate of depreciation and when coverage ends in the life of your roof. (Often roofs depreciate at a rate of $1,000 a year, so if your roof cost $15,000 and it is 12 years old you may only get $3,000 from your insurance policy when filing a claim.) This policy option will be more affordable, but make sure you understand the risks associated before signing.

Replacement Value

This is the equivalent of full coverage in the roofing world. No matter whether your roof is brand new or has 10 years on it, this policy means your insurance will make sure it is replaced fully (minus your policy deductible). They will cover replacement with a roof of comparable value- so if you are looking at an upgrade in materials or a redesign you might be paying those extra costs out of pocket. 

These policies will cost more than ACV policies, but are well worth it in the case of a full roof replacement. If your current provider doesn’t offer this option then shop around and find the best fit for your budget and home. The availability of this policy is sometimes limited by the current age of the roof, so if your roof is over 20 years old it might not be available. 

Guaranteed/Extended Replacement Value

This is the most expensive and most thorough of the possible insurance policies. It often only applies to new homes and will cover the entire home- roof included. Typically these policies are represented by percentages, 125% or 150% of the replacement cost, which gives you excess coverage. 

Always be sure to read through your insurance policy carefully or have a trusted advisor look through it with you. Sometimes hail damage falls under a separate deductible or repairs will only be made when they affect structural integrity and not just cosmetics. Making sure you know what your policy entails will help you decide when to update it and what to expect when you file a claim. 

Often your roofing insurance policy is a clause in your overall home insurance policy. Taking the time to read through and consult a trusted advisor on whether or not you have full or partial coverage can make all the difference when the time comes to have roof repairs or a replacement done.