when should you file an insurance claim?

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• Does the age, condition, or composition of my roof affect the cost of my insurance policy? If so, what can I do to lower this cost?
• Am I being charged more because I have an older roof? If so, am I eligible to receive a discount if I replace my roof?
• Does my insurance policy settle claims for damage to the roof on a replacement cost or actual cash value basis?
• Does the age or condition or composition of my roof determine whether the claim is settled on a replacement cost or actual cash value basis?
• If my policy currently settles roof claims on an actual cash value basis,  does replacing my roof make me eligible for replacement cost coverage?
• Does my insurance policy provide coverage if it is determined that the damage to my roof is only cosmetic?
• If my roof is damaged, how quickly must I report the claim to the insurance agent or insurance company?
• Could the age of my roof cause the insurance company to decide to non-renew my insurance policy?

Replacement Cost Value (RCV) means that the insurer will pay the full cost to repair or replace the damaged property with new materials of like, kind, and quality to that which was damaged.  The RCV is split into two payments: Actual Cash Value (ACV) upfront, and a second payment for depreciation after the work is completed and your contractor has submitted a proper invoice providing evidence you have submitted full payment for the job as shown in the Scope of Work provided by your insurance company.  However, to receive the full replacement cost, many insurance policies require that the damaged property be repaired or replaced within a reasonable timeframe, such as 180 days from the date of the loss. If the repairs are not completed in that timeframe, the amount of loss settlement may be limited to only the actual cash value.   Your contractor can work with your insurance company to recover depreciation and ensure you receive all reimbursements you are entitled to under your policy and avoid unnecessary out-of-pocket expenses.  Be wary of contractors who promise you they can rebate/waive your deductible. Waiving deductibles is illegal in the State of Ohio and without submitting falsified fraudulent invoices to your insurance company you and your contractor will be unable to recover the full amount of the Replacement Cost Value.  Don't let your roofing contractor make you complicit in a crime for the sake of a few dollars. 

Actual Cash Value (ACV) means that the insurer will pay the current cost of the damaged property less depreciation. The depreciation takes into consideration the aging and wearing of the damaged property. If the policy pays on the basis of actual cash value, the insured will likely not be fully compensated for the cost to repair or replace the damaged property.  These policies are often not fully explained to the insured and presented under the guise of reduced premiums but come with reduced coverage as well.

An easy way of thinking about RCV vs. ACV is the example of a car.  Let's say you buy a new car, and 2 years later you are involved in an accident.  The car is totaled.  The cost of the vehicle was $50,000 new, but after 2 years and 30,000 miles it has depreciated and is now worth only $35,000.  The car has depreciated by $15,000. The Replacement Cost Value (RCV) of the car is what it would take to replace it with a new one ($50,000).  The Actual Cash Value of the car at the time of loss was $35,000.  The difference between RCV and ACV is the depreciation.  If you have an RCV policy, your insurance company will compensate you for the full value of replacement ($35,000 ACV + $15,000 depreciation=$50,000) whereas if you have an ACV policy your insurance company will compensate you only for what the car is actually worth at the time of loss ($35,000).

Regardless of whether the loss is settled on a replacement cost or actual cost value basis, your claim will be subject to the deductible provision. A deductible is the amount of out-of-pocket expense for which you are responsible before the insurance coverage begins. It is illegal in the State of Ohio for a contractor to waive, reduce, or otherwise rebate all or part of a deductible for a homeowners insurance claim.  Be wary of roofing companies that claim they can save you from having to pay your deductible.  Other than the fact they are making you complicit in the commission of a crime,  if your contractor doesn't follow state law what other corners are they cutting?  Don't trust your home to a company or contractor that is willing to break the law. Building codes are laws too....would they respect those laws or leave your home in a compromised state? 

 Most insurance policies covering your home have an 'All Other Perils' (AOP) deductible and a wind/hail deductible. The AOP deductible is applied whenever the damage to your home is caused by perils other than wind or hail. The wind/hail deductible is applied whenever the damage to your home is due to wind and/or hail. 

The wind/hail deductible is either a flat dollar amount or a percentage amount. If the wind/hail deductible is a flat dollar amount, the amount paid by the insurance company for the claim is reduced by the deductible amount. For example, if hail caused $15,000 damage to your roof and siding, the insurer would pay $14,000 and you would be responsible for the remaining $1,000 to complete the repairs to your home.

What confuses many is that a percentage deductible is based on the amount the home is insured for, NOT the amount of damage to the home. For example, your home is insured for $300,000 and your wind/hail deductible is a 2% deductible. Your out-of-pocket expense is 2% of $300,000 or $6,000. Regardless of the amount of damage caused by wind or hail, you would be responsible for $6,000 of the repair costs.