According to the Insurance Information Institute, your standard homeowner's policy covers roof damage from fire and most natural disasters within the limits, deductibles and exclusions of your policy. Your coverage, however, may be determined by the age of your roof and your location. If you live in an area subject to hurricanes or hailstorms, your insurer may require higher deductibles for wind or hail damage.
Replacement vs. Actual Cost Coverage
Insurers typically compute the depreciated value of your roof when determining the amount of your compensation. If you have a replacement cost homeowner's policy, your insurer will issue an initial check for the actual depreciated value of your roof to start the repairs. Upon completion of the work, your insurer will issue a second check, which is the difference between the depreciated value of the roof and the replacement cost of the roof. If you have an actual cost homeowner's policy, however, your insurer will compensate you only for the depreciated value of your roof. Most insurers depreciate roofs over a 10- to 30-year period depending on the roofing material. For example, the insurance industry depreciates asphalt composite shingle roofs over 20 years at the rate of 5 percent a year. If your roof is 10 years old, your replacement cost policy will compensate you for the full cost to replace your roof according to the two step process: 50 percent to start the work, 50 percent upon completion. Your actual cost policy will compensate you only for the depreciated value of 50 percent.
Hurricane and Hailstorm Damage
If you live along the Atlantic or Gulf coasts or in an area prone to hailstorms, your insurer may have coverage restrictions for wind or hail damage. Your insurance premiums may not be higher, but your deductible could range from 3 to 5 percent of your home's value for wind or hail damage. So, instead of paying a fixed dollar amount for your deductible of, say, $1,000, your deductible for wind or hail damage, at 3 percent of the value of your $300,000 home, could be $9,000.
Along with earthquakes, flood damage is specifically excluded under standard homeowners' policies. This includes flood damage from hurricanes. According to the Insurance Information Institute, four out of every five natural disasters nationwide involve flooding. But, less than a fifth of American homeowners have flood insurance. It is hardly consoling that your roof is covered for hurricane wind damage after your house is ruined from hurricane flooding, and you're without flood insurance. If you live in an area subject to flooding, inquire about the National Flood Insurance Program administered by the Federal Emergency Management Agency.
What's Covered in Your Homeowner's Policy?
Insurance carriers are regulated by your state's department of insurance. The same insurer can change homeowner coverage according to the age of your property, coverage limits, deductibles and exclusions based on your state's insurance regulations. The only way to know about your coverage with certainty is to read your policy thoroughly and discuss the details with your insurance agent.
Be Prepared for a Disaster
Take photos of your property, including the roof, before a disaster. Update your photos after major exterior work to your home. Take photos immediately after a disaster for comparison purposes to show your agent. Remove dead trees from your property before they cause damage. Your deductible from an avoidable claim is an unnecessary bite out of your budget.
- Insurance Information Institute: Am I Covered?
- Insurance Information Institute: What coverage is included in a standard homeowners insurance policy?
- Bankrate.com: Does homeowners insurance protect you?
- Claimspages.com: Depreciation Guide [page 12 for roofs]
- Roofing Tutor: Does Homeowners Insurance Cover Roof Damage from a Hurricane?
- Insurance Information Institute: Many Still Lack Flood Coverage As Hurricane Season Nears Its Peak
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