Unexpected damage to roofs, windows, and siding from wind, hail, and natural disasters can be costly and stressful. So, it is essential to insure these items of your home properly. To help with that task, we have identified a few details that homeowners should be aware of when buying home insurance.
Actual Cash Value vs. Replacement Cost Coverage
Replacement Cost Coverage is “to replace the damaged property with materials of like kind and quality.” This is opposed to what is referred to as Actual Cash Value (ACV), which takes depreciation into consideration. You can choose to have Replacement Cost Coverage for your personal property, your roof, or your entire home.
To qualify for Replacement Cost Coverage on your roof, some carriers require your roof must not be more than fifteen years old. The age requirement varies by insurance company, and type of roof material.
Why is Replacement Cost Coverage Important?
Imagine a hailstorm hitting your neighborhood and damaging your roof. The estimate to replace your roof comes in at $30,000.
If your shingles were ten years old and you carried Actual Cash Value Coverage on your roof, your insurance company would only pay a small percentage of the total cost to replace your roof. This is because ACV only pays for the depreciated value of your roof, less your deductible, leaving you responsible for paying the balance of the cost yourself.
If your shingles were ten years old and you carried Replacement Cost Coverage on your roof, your insurance company would pay the total cost to replace your roof, less your deductible.
Bottom line: Get Replacement Cost Coverage if you qualify for it.
Matching Coverage
As a homeowner, you may also want Matching Coverage. Some carriers now offer matching of roofs, siding, or possibly windows as an extra endorsement to a standard homeowners policy. In some instances, only one half of a roof is damaged or one or two sides of the vinyl have damage for the storm. Matching coverage would allow for reimbursement up to an amount selected when a new policy is purchased. It helps in creating a uniform appearance of the exterior of the home, and the materials would be the same age, design, etc. This agreement is essential for aesthetics and contributes to your home’s overall value.
Replacement Cost Coverage Payment
Unlike Actual Cash Value, Replacement Cost Coverage allows for Recoverable Depreciation. This agreement means that after receiving a settlement for the cash value of your roof, windows,and/or siding, a homeowner can submit receipts and invoices after the property is fully repaired and/or replaced. Insurance companies will then reimburse the difference between their initial payment and what it costs the homeowner up to the maximum of available recoverable depreciation which is spelled out on the claim paperwork.
Contact US
In the case of damage to your property, your first point of call should be to us as your agency. We will provide you with the information needed to make temporary repairs and process your claim and answer your questions. It is very important that we or the insurance company are notified in a timely manner after a storm if there are damages, as one of our carriers requires notification within six months or a claim can be denied!
Vet Your Contractors
Contractors are essential to your insurance process; therefore, it is vital to ensure they are aboveboard and trustworthy. Make sure you are working with contractors that are fully insured. Using local contractors with good reviews is usually the best way to avoid scam artists looking to make a quick buck.
Contact us if you have questions regarding the coverages available to protect your roofs, sidings, and windows. Our agents are happy to help you.
