SPONSORED CONTENT | HOMETOWN ROOFING & RESTORATIONS
What’s Actually Going On in the Roofing Industry?
For years, the roofing industry benefited from an insurance environment that made storm restoration relatively straightforward. When a covered storm damaged a roof, many homeowners carried replacement cost value coverage. After the deductible was paid and the work was completed, the policy generally covered the reasonable cost of replacing the damaged roof with materials of similar kind and quality.
Unfortunately, easy access to insurance-funded work also attracted some people who had no business being in the roofing business.
Storm chasers began flooding neighborhoods after every major weather event. Some used high-pressure sales tactics, encouraged questionable claims, promised to “take care of” deductibles or disappeared as soon as the insurance check cleared. Homeowners were sometimes treated like claim numbers instead of neighbors.
After major storms, temporary contractors can flood neighborhoods. Homeowners should look beyond the first person who appears at the door and choose an established, licensed local company.
That behavior is not the only reason insurance is changing. Severe weather, rising construction costs, inflation and increasing claim expenses have all contributed. But years of aggressive and sometimes unethical storm-restoration practices certainly did not help.
Today, homeowners are experiencing the consequences.
One major change is the deductible. Many policies once carried a fixed deductible—perhaps $500 or $1,000. Now, some policies include wind or hail deductibles calculated as a percentage of the home’s insured value.
That difference can be enormous.
If a home is insured for $300,000 and carries a 1% wind-and-hail deductible, the homeowner’s responsibility is $3,000. At 2%, it becomes $6,000. That amount is owed by the homeowner before insurance pays its portion of a covered claim.
Imagine the surprise when a storm damages the roof, the claim is approved and the homeowner discovers that replacing it will require several thousand dollars out of pocket.
The natural response is, “How in the world did this happen?”
When homeowners call their insurance agencies, they may learn that notice of the change was included with a renewal packet or mailed policy document. Technically, notice may have been provided. Practically, it may have looked like another routine statement.
Most families pay their bills online. A thick envelope from an insurance carrier can easily be mistaken for paperwork they have already viewed electronically—and it may go straight into the garbage. That reveals a significant communication gap. A change that could cost a family thousands of dollars deserves more attention than an easily overlooked piece of mail.
Another important change involves actual cash value coverage.
A percentage-based wind-and-hail deductible can turn into thousands of dollars in unexpected out-of-pocket expense.
Replacement cost value, commonly called RCV, generally covers the cost of repairing or replacing covered property with materials of similar kind and quality, subject to the policy and deductible. Actual cash value, or ACV, subtracts depreciation based on factors such as the roof’s age and condition.
For example, a roof may cost $20,000 to replace. Under an ACV settlement, the carrier could deduct substantial depreciation before subtracting the deductible. The resulting payment may fall far short of the amount needed to purchase a new roof. Depending on the policy, that depreciation may not be recoverable.
Bill Stuman, owner of Deerfoot Insurance, believes homeowners must become more proactive.
“The worst time to discover what your policy covers is after the storm has already passed. Homeowners should sit down with their agent, ask how their roof is valued and know whether their wind-and-hail deductible is a flat amount or a percentage. A short conversation today could prevent a very expensive surprise tomorrow.”
— Bill Stuman, Deerfoot Insurance
Editorial note: Draft quote subject to Bill Stuman’s review and approval before publication.
The roofing and insurance industries are changing, but homeowners are not powerless. Ask your agent direct questions. Review every renewal. Know whether your roof has RCV or ACV coverage. Confirm your wind-and-hail deductible in actual dollars—not merely as a percentage.
RCV coverage and ACV coverage can produce dramatically different outcomes. Exact benefits depend on the individual policy, exclusions, depreciation and deductible.
And when choosing a contractor, look beyond the person who appeared immediately after the storm. Choose an established, licensed local company with a reputation to protect. Hometown Roofing & Restorations holds an A+ rating with the Better Business Bureau, is certified by two of the industry’s top manufacturers—GAF and TAMKO—is an Angi Super Service Award winner and is backed by five-star Google reviews. Call 205-984-4777 or visit HTRoofers.com.
The “lame roof dude” may disappear when the storm moves on.
Your roof—and the financial decisions surrounding it—will remain long after he is gone.
