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Roof Claims Explained: ACV vs Replacement Cost Coverage - YouTube
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hey this is Jeremy from shine insurance
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and today we're going to talk about roof
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claims generally that's wind or hail
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damage to your roof we've got a ton of
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it going on in my area right now I deal
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with clients every day that are
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experiencing these kinds of claims so I
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wanted to create a video that just
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walked through it for you and helped you
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to understand your insurance policy and
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how it would respond whether you're
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experiencing a roof claim right now
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or whether you just want to be prepared
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for when one happens so let's get this
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going here let's talk about first what
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we will learn so we're going to talk
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first about why insurance companies have
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different rules for your roof than for
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the rest of your house it's actually set
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up in kind of a different way and then
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we'll talk about the three types of roof
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coverage the first being the best and
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that's replacement cost the second a
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little bit lesser is actual cash value
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in the third that you really hope you
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don't have is no roof coverage at all
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we'll kind of look at all those let's
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start with a little known fact more than
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40% of all homeowners insurance claims
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involve wind or hail damage to the
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exterior of your house that could be
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your siding that could be your gutters
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but the vast majority of those claims
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involve your roof so insurance companies
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are motivated to limit their risk with
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specific coverage options for your roof
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insurance companies know that they're
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going to spend a lot of money in claims
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for roofs and that's going to increase
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your premium our premium for how much we
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pay for homeowners insurance and so
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sometimes they'll create a different
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kind of coverage that specifically for
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the roof to try and mitigate their risk
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in the situation so they've created a
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completely different name for the kind
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of damage that usually happens to your
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roof and that name is right here it's
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wind hail coverage so if you look at
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your homeowners policy there should be
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some reference to wind hail coverage
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specifically and if it's not you need to
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figure out what that is and where it is
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because almost every policy has wind
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hail coverage separate it out on the
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policy so let's start with wind that is
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heavy movement of
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air like wind gusts tornadoes hurricanes
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etc so especially if you live in Florida
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or somewhere like that wind coverage
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super important because that includes
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hurricanes the Midwest we have tornadoes
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and things of that nature but it can
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even be just high wind gusts that cause
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damage to your home those do not include
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by the way by the way your drunk uncle
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talking politics that might be a lot of
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wind but not included on your homeowners
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policy the second part of that is hail
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and those are frozen ice balls falling
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from the sky they could be the size of
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pennies they could be the size of golf
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balls they could even be the size of
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grapefruit Texas had some of that
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recently hail is frozen ice balls
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falling from the sky so wind hail
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coverage is what's going to specifically
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cover those two things all right so
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let's start with a roof claim example a
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storm comes rolling in and oh no there's
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hail coming hitting your house it's
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starting to cause damage to your roof
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look at that damage that's terrible I've
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never really seen a roof turn quite that
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bad but a wind hail storm comes through
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and suddenly you have a claim situation
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you have a roof that is damaged in this
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case by a hail possibly by wind as well
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but you clearly have a situation so
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let's talk about who's going to become
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involved in this situation the first
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person is you you the homeowner are
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going to be in the center of the claim
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situation making many decisions figuring
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out how to solve this problems to take
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your roof from damaged to completely
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fixed the second one is the roofer the
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contractor who's going to take care of
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your roof and actually do the work to
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fix your roof up and the third is the
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insurance adjuster the insurance company
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will put someone in charge of figuring
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out how to pay the claim for you and
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that's the insurance adjuster so that's
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the individual who represents the
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insurance company in this situation so
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let's talk about the steps you're going
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to walk through step one in my opinion
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is to call a roofer roofers are the
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spell
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lists and they're going to be the one
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who can tell you what damage you're
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actually dealing with so to me I would
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call a local well-known roofer that has
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a reputation in your town they're
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absolutely fly-by-night roofers that
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roll in and knock on doors after Hale
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claims are hail storms and tell people
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they're happy to take care of it those
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are not the people you want to work with
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they often don't use quality products
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there's nothing you can do if three
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months down the line you realize they
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didn't do the job well now they've
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disappeared and you can't find them so
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call a local reputable roofer and have
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them come out and take a look now they
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might say one of a few things they might
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come out and say you know I don't see
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any damage to your roof I don't think
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you have hail damage or wind Hamet
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damage in this situation they may say
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yeah I see some hail damage it's really
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bad like the roof in this example
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clearly we've got major problems going
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on here and it will likely need to be
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replaced or they could say yeah there's
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a small amount of damage I see it
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they're likely we're going to repair it
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so we might replace a few shingles or
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deal with a smaller repair rather than a
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complete replacement of your roof
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so the roofer could give you a sense
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right off of is there any damage at all
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is it a limited amount of damage or is
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it likely that we're going to have to
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replace your roof so step one is getting
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that estimate from your roofer step two
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is starting the claim so this is kind of
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the parallel line you've got the
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contractor the roofer involved the
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roofer is saying there's some damage
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that needs to be dealt with and so step
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two is you're going to start an
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insurance claim you may call your
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insurance company directly you may call
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your local independent agent like I am
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and tell them the situation and make
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sure you have that claim what's going to
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happen first is they're going to give
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you a claim number which is what you
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refer to throughout throughout the
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process so that's an important bit of
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information to have and they will likely
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schedule an insurance adjuster to come
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to your home that adjuster is going to
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come out and take a look for themselves
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at the damage what the extent of the
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damage is and what needs to be dealt
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with so
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that should happen second and then step
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three you're going to have the insurance
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adjuster come out so let me give you a
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pro tip right here super important will
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help the process immensely and it's
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really simply just be nice to your
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insurance adjuster this is a person who
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has serious power in the scenario most
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insurance adjusters are great people
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have your best interests in mind and are
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going to take good care of you but in
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all things if we treat people nicely
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they are more likely to treat us nicely
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as well if we are combative with that
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person or treat them as if we distrust
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them we could have a different kind of
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experience so my advice be nice to your
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insurance adjustor throughout the
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process even if you disagree with
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something they say okay so you're
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definitely be nice to this adjuster
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let's talk about what the possibilities
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are that the adjuster could say the
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adjuster is first going to look at the
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damage to the roof and deem whether he
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or she agrees with the roofer oftentimes
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the roofer and the adjuster don't agree
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and so you have to work through that but
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in this case let's just say that the
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adjuster agrees with the roofer it's
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going to cost $8,000 to replace your
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roof now I need to throw in real quickly
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a part of your insurance policy that
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we're going to talk about as we go
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through the different options and that
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is your deductible and all insurance
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policies have deductibles and a
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deductible is the portion of damage that
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you agree to pay to fix so you're
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agreeing that I will pay X amount and
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the most common homeowner's deductible
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is $1,000 and that's the example we're
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going to use here I agreed to pay a
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thousand dollars of the damage and you
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as the insurance company are going to
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pay then what your responsibility is
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above and beyond that amount so
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deductibles are incredibly important to
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understand as you're trying to
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understand your roof coverage so let's
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start with the worst coverage well that
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would just be no wind hail coverage at
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all your policy does not have coverage
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for wind or hail damage very common in
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high hurricane areas like Florida but
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in other places as well so it's super
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important that you check out your
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insurance policy and make sure that you
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actually do have wind hail coverage if
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you don't have wind hail coverage the
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cost to replace your roof is eight
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thousand dollars insurance company
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obviously is going to pay zero you are
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going to pay $8,000
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it's kind of a bummer hopefully you have
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some coverage so let's talk about the
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two different kinds of coverage that are
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there when you do have it and the first
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one is called a CV or actual cash value
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coverage a CV coverage says your policy
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does have wind or hail coverage but the
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insurance company is going to factor in
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the age of your roof and subtract the
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amount they pay out based on the age of
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the roof so in this example we have an
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$8,000 fix we've the roofers say it's
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going to cost $8,000 to fix your roof
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but let's say it's 10 years old the
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insurance company is going to say well
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that 10-year old roof is only actually
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worth $6,000 not the $8,000 it's going
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to cost to replace and so they're only
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going to figure based on that $6,000
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plus they'll subtract your deductible
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from what they pay out a thousand dollar
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deductible is the example we're using
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here and in the end you end up paying 3
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of that $8,000 out of your own pocket to
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fix your roof so a CV coverage has
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coverage and that's good in this example
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you still got $5,000 paid out from the
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insurance company but it doesn't pay the
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entire replacement cost of the roof and
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so that's that can be a surprise to
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people in a real negative for folks now
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replacement cost coverage is what you
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want to see on your insurance policy
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this says your policy has wind hail
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coverage and the insurance company pays
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to replace it of course minus the
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deductible which we've talked about
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already so in our example the cost to
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replace the roof is $8,000 the insurance
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company is going to pay $8,000 minus
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your thousand dollar deductible so
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they're going to pay $7,000 you're going
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to pay $1000 which is the best version
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of coverage for you replacement cost
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coverage is what you want to have
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because they're going to pay to replace
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the roof
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no matter the age of your roof so check
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your insurance policy out and make sure
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it has replacement cost coverage now how
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is going how is this going to happen
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step four is actually fixing the roof
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you've had the roofer come out they said
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you had damage you had the adjuster come
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out they talked about your insurance
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policy told you exactly what kind of
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coverage you have and hopefully you had
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replacement cost coverage and so we're
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going to get things fixed and so we're
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going to talk about how this gets paid
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out because it can be confusing to
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people and kind of you feel like ah
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what's going on here so I'm going to
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make it real easy for you and lay it out
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when the claim first starts the adjuster
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is going to give you money a check for
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the AC V value if you have AC V coverage
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that's all you're going to get but if
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you have replacement cost coverage you
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say wait a minute the whole point of
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having replacement cost coverage is to
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get the full amount to replace your roof
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minus the deductible but I got this AC V
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check what gives well the insurance
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company is trying to make sure that you
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actually use the money to replace the
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roof so they're incentivizing that
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process by holding back some of that
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replacement cost money and giving it to
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you after the roof is fixed so you're
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going to give the money to the roofer
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and then the roofer is going to go and
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they're going to get that work done so
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they're going to do some work and get
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rid of that damage fix the roof on that
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side then fix the roof on that side and
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the roof is completely fixed everything
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is done at that point either you or the
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roofer is going to send the final tally
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to the insurance company and the
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insurance company is going to write you
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a second check they're going to write a
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check for the rest of the replacement
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cost of the roof and then you're going
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to pass that on to the roofer plus your
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deductible generally a thousand dollars
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and the situation will be resolved now
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one last little piece about fixing your
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roof sometimes those checks from the
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insurance company include the mortgage
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company's name on the check and that
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could be kind of a pain because you've
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got to work that out well they're
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protecting the interest of the mortgage
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company in your house they've got a
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mortgage on the house they're using that
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house as collateral if you don't fix
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your roof and you've got a beat-up roof
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then their collateral isn't
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good so the mortgage companies want to
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know that they're taken care of and
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that's why their name sometimes is on a
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claim check all right so your roof is
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all fixed everything's taken care of the
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claim is over
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finally our rookie mistake and this is
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an obvious one not paying attention to
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wind hail coverage on your policy take a
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look at your policy right now pause this
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video go look at it figure out what kind
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of wind hail coverage you have so you
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know in a claim situation what will
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happen and if you don't like the
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coverage that you have you can fix it
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now instead of after the damage has
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happened all right
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that was it what do we learn today why
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insurance companies have different rules
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for your roof and that's simply because
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there's such a high amount of claims
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that happen on roofs that insurance
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companies are trying to mitigate their
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risk
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we also learned replacement cost the
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best kind of coverage for your roof ACV
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coverage for your roof - depreciation
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for age and finally the worst no roof
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coverage at all so check it out and see
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what kind of coverage you have on your
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policy if you want to watch some other
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shine videos we've got some great ones
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for you it starts off with a new home
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buyers guide we walk you through from
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thinking you want to buy a house all the
[875]
way through the process of purchasing
[877]
and closing on that new home of your
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dreams we'll give you a step-by-step on
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that great video to check out five steps
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to a homeowner's claim really fairly
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similar to this one but really lays out
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in general how homeowners claims work
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and then finally if you just want funny
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how not to light a bonfire you can laugh
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at that and go on with your day with a
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big smile on your face finally what's
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next as always the last step in this
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video is to subscribe to our channel on
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youtube if you haven't done so already
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we try and make great videos just like
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this one explaining things about
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insurance or finances that just give you
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step-by-step ideas of how they work
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hopefully make you smarter about the
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topic so subscribe to our Channel and
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we'll get those out to you every time we
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publish and finally if you like this
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video if you think it could help a
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friend maybe someone who just had hail
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damage to their house or someone who
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lives in the Midwest or in Florida
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for hurricanes any of that kind of stuff
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pop that out on your social media and
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share this information with others all
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right that was it hope you learned a ton
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from this video and we'll see you next
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time
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