Questions About Roof Replacements

with Insurance Companies

 

Why is my check less than what my roof will cost?

 

There are two main deductions from an adjusters estimate of what your roof will cost. The first is your deductible. The second is for  Depreciation.

 

What is Depreciation, RCV, Non Recoverable Depreciation & ACV?

 

RCV stands for Replacement Cost Value. RCV is the current retail cost to replace your damaged items. ACV is the Actual Cost Value. For example, assume a roof was installed 10 years ago with an expected 20 year life then damaged in a hail storm. The cost to replace the roof is $10,000.  Then RCV would be 10,000 and the ACV would be $5,000 (10/20th of $10,000). The difference between the two, $5,000, is the depreciation which are additional funds you will receive when a new roof is installed.  Generally depreciation is paid after you or your contractor submits a final invoice.

 

If you do not know what kind of policy you have, contact your company and ask.  Most homeowners have the RCV policy and the insurance company will pay for the replacement, minus your deductible.  If you have an ACV policy, your premium is lower but you will only recieve a check for the ACV and you'll have to pay out of pocket the deductible plus the difference between ACV and RCV which is called "Non-Recoverable Depreciation" on the claim document.

 

Is the adjusters calculation of my replacement final when the adjuster is finished with his initial paperwork?

 

No, there are many factors that come into play in this process. It is common that your contractor and adjustor will need to reconcile a few items. You should never be concerned that your estimate from New Line Roofing is different than your adjuster's. The main cost factor in a shingle is asphalt which is petroleum. With the volatile price of oil, shingle prices can change at times on monthly basis.

 

Bottom line, what is the cost to the homeowner?

 

It is always your deductible plus upgrades, if you the homeowner, chooses to upgrade.

 

What about code upgrades?

 

Some policies allow for code required upgrades.  You’ll need to ask your insurance carrier.  If they do, be prepared to provide the code in writing to cover any additional costs.  New Line Roofing can help you with all code related documentation.

 

I have shopped around and found a contractor that will do the job for less than what the adjuster has calculated. Can I use this savings to reduce my deductible?

 

No. Your deductible always comes first. You only save your insurance company money by choosing a cheap/low cost contractor. When you submit an invoice that is lower than what the adjuster calculated, this will lower the amount of depreciation you will be paid.

 

Some contractors say they will “cover my deductible”. How do they do this and is it proper?

 

It is very improper to cover a deductible. Read more about this on our deductible page.  A roofing contractor should not get involved in paying a deductible for a homeowner. It is illegal for a roofing contractor to offer to cover your deductible either in full or with coupon or advertising allowance (Colorado Revised Statute 18-13-119.5).

 

Is a sign allowance or referral fee given to me proper?

 

It can be.  Generally it is just a disguise for “covering a deductible”. To be legitimate, this fee must be the same if you buy a roof or not.  Additionally, it will be reported as taxable income.

 

How long does it take to get the additional funds once I submit an invoice to my insurance carrier?

 

Not long.  Please be patient and understand that all trades need to be completed and the adjuster and the contractor have to come to a agreement on final estimate for your claim. Also you need to take into account if there is a mortgage company on your insurance, in which case this process can be time consuming but New Line Roofing is here to help with any questions you may have, or forms you may need.