Roof Insurance Claim Process: Critical Terms To Know

Key terms to know for your roofing insurance claim

If you have an insurance claim on your roof, there are several roof insurance claim terms to know. And there’s more to it than just understanding the definition of these terms. You should be aware of rules and policies that, left unheeded, could cost you unnecessarily or even make your roof no longer insurable. Read below to learn what you need to know about roofing insurance claims.

1. Adjuster

This is the person who comes to inspect the property, define the scope of damage, and determine if your roof is covered under the insurance policy. The adjuster either is employed by your insurance company or by an independent company. Regardless, this person will have your best interests in mind. They will spend about one or two hours inspecting your roof damage and they will take lots of photos. Be sure to tell them about any potential damages they might not be aware of, such as stains on the ceiling. You will not pay for the report created by the adjuster, and in fact there are no fees associated with filing a claim.Important:Before filing a claim with your insurance company, consider having a reputable roofing company check your roof to determine the extent of the damage. If your damage is minor, you might choose to pay out of pocket instead of filing an insurance claim, which a) not only requires you to pay the deductible out of pocket, but also b) automatically creates a claim number that forever is associated with your property. Some realtors will tell you that you don’t want too many claim numbers associated with your home, because a buyer can see all insurance claims filed on a property by requesting a CLUE Report. This report shows a collective history of claims filed on a home, such as roof repairs, flooding, lightning strikes, etc.

2. Scope of Work

This is a line-by-line breakdown of all the items that need to be repaired or replaced per the insurance company. This written report comes from the adjuster, and the homeowner gets a copy. As the homeowner, you should plan to provide a copy to the roofing contractor, as this serves as the approved work plan that tells the contractor what is approved for repair, for replacement, etc.

3. Contract

After the you provide the scope of work to your chosen contractor, the contractor will ask you to sign a contract to perform the work as per the claim. This document should include information about your warranty, any cancellation clauses, and more.

4. Supplement Request

After a claim is filed, it is possible that your contractor will find additional damages not originally approved by the adjuster. The contractor can submit a supplement request to ask for more funds to cover damages not identified on the original scope of work. This request is submitted by the contractor on behalf of the homeowner, and it is not infrequent … happening in about one-third of roofing claims. Water damages can be difficult to spot, and they often are the source of these supplemental requests.

5. Depreciation

It’s important for the homeowner to understand depreciation, which is the reduction in the value of the roof based on the amount of the roof’s wear and age prior to your repair. The recoverable depreciation on a claim is paid at the end, when the contractor performs all the repairs and turns in all the proper paperwork and documentation to the insurance company, per the company’s guidelines. If the contractor doesn’t do everything properly, the insurance company will not release the depreciation funds to the homeowner. If you have a $15,000 roofing claim and a $5,000 deductible, you are responsible for paying the $5,000 deductible. If the insurance company determines that your roof has depreciated in value by $4,000, they will send you a check for $6,000 (which is $15,000 minus the deductible, minus the depreciation value). Then, after all work is completed on your roof, and after the contractor has completed all the appropriate paperwork and filed it, the insurance company mails a check for the final $4,000 to the homeowner. The insurance company withholds the final depreciation check until work has been completed because they want to ensure that you get the roof repaired.

Important: You can choose to forego roof repairs and keep the initial insurance check, but you will not receive the final depreciation check. And more importantly, it’s critical to understand that if you do not complete all approved roof repairs and also have your contractor submit all the final paperwork to your insurance company, your roof no longer is insurable. That means that if you have roofing damage in the future, your insurance company will not pay for it because you did not take all the final steps to repair the roof and return it to good working condition.

6. Deductible

Texas House Bill 2102 was passed recently, which says that all deductibles must be paid directly to the contractor by law, or the depreciation funds will not be paid on the claim. This bill was enacted to help protect the homeowner from scams. You should watch out for deductible scams, such as when you are told you don’t have to pay your deductible or that they can cut your deductible in half. That’s a red flag.

7. Insurance Completion Form

This is the final step in getting the claim closed out and the depreciation funds paid. The contractor completes this form based on the insurance company requirements, which can vary. The homeowner simply needs to sign the document showing that the work has been completed. Before you sign, you should feel confident that the job has been completed, the roof has been replaced or repaired according to the scope of work, cleanup has been completed, etc. Until this is signed, the claim is still open and the final depreciation check will not be sent to the homeowner.

shingle or metal roof
shingle or metal roof

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