Does homeowners insurance pay for the replacement of your roof?

The answer to this question depends upon many factors, including your homeowners insurance

policy and why your roof needs to be replaced. If your policy provides coverage for the damage,

the amount your insurance company will pay depends upon the terms of the policy, the

coverage limits of your policy and your deductible. Detailed information about how your claim

will be settled can be found in the “loss settlement method” section of your policy.

COVERAGE FOR THE DAMAGE

Homeowners policies typically cover losses that are sudden and accidental, and caused by

specific perils such as fire, wind, hail, and the weight of ice or snow. Policies usually exclude

cover the repair of the damaged portion only. You should read your policy to better understand

what types of losses are covered and which perils are excluded.

LOSS SETTLEMENT: ACTUAL CASH VALUE VERSUS REPLACEMENT COST

If you have purchased Replacement Cost Value (RCV) coverage, your policy will cover the cost

to repair or replace your damaged property without deducting for depreciation. However, most

homeowners policies require you to complete the repair or replacement in order to obtain full

reimbursement. Until the repairs are made, it is likely you will only receive payment for the cost

to repair less depreciation. Once the repair or replacement is finished, you will receive the

remaining amount that had been deducted for the depreciation.

If you have purchased Actual Cash Value (ACV) coverage, your policy will cover the

example, if your 20 year old roof is destroyed by a covered peril and must be replaced, the

policy with RCV coverage will pay the full cost to replace the roof, assuming the work is done.

The policy with ACV coverage will pay the depreciated cost to replace the roof, which will most

likely be far less.

DEDUCTIBLES

Some homeowners policies contain a special deductible for losses caused by wind, hail,

hurricanes or other storms. If damage is caused by the specified event, this special deductible

may be applied instead of the “all peril” or general policy deductible. Some insurers

automatically include this special deductible for wind, hurricanes or other storms, while other

damage. Using that same example, but changing the cause of loss to a hurricane,

if your policy has a 2% hurricane deductible, the deductible would be $2,000, and

the insurer would pay $1,000 towards repairing the damage. In this same

example, if your hurricane deductible was 5%, you would not receive any payment

from the insurer because the deductible amount would be greater than the cost to

repair the damage.

If you have questions about what your policy does and does not cover, contact your insurance

producer (agent or broker) or your insurance company. If you believe you need additional

coverage to fill a gap, you can ask your producer or the company if an endorsement is available.

If you have questions or think that the insurance company has not lived up to the terms of the