What does your insurance actually cover? Enter Hailstorm

[Jerry W.]

On July 1, 2019 an extremely bad hail storm hit the town I live in.  Every roof I own is damaged, some roofs are badly hit, some siding is ruined on one or 2 sides, many windows are broken, and there is broken glass inside some houses, even rain gutters are beat up.

Here is the deal, I have 24 buildings spread across 5 insurance policies, and even 1 or 2 buildings with no insurance.  I have met with several adjusters, I have talked with numerous insurance representatives, multiple contractors, and the information I am receiving varies wildly.  the town is flooded with storm chasing contractors who are literally going door to door to get contracts signed.

I would like input from folks on how to handle these claims, what can be challenged, what can not be challenged successfully and how it works.  I plan to chronicle the events on here to perhaps help others be ready and more prepared to handle something like this.  Keep in mind that no one probably keeps an emergency repair fund large enough to pay to replace every roof in their rental stable.

Areas that I will try to address as I get answers:

1. ) Do insurance companies pay the entire cost of a new roof or do they only pay for the depreciated value.  There appears to be recaptured and unrecaptured depreciation.  This may vary between policies and coverage and insurance companies.

1. a.)  What if your roof has 3 layers of shingles?  Will they only pay for stripping off 1 layer?  If it has asphalt over shake shingles what will they pay?  and finally If your roof does not have drip edge or ice guard on it will they they pay to have it installed on your new roof?

2. ) If your siding is damaged and the type of siding is discontinued will they pay to replace the entire house siding, or only the side that is damaged?  This appears to vary by state.  The adjuster who looked at my siding said they will only pay for the side that is damaged.  He said that is the rule for this state.

3. )  What if the price the insurance gives you for doing the roof is lower than the bids you get from contractors?  Ie, they pay $350 a square to replace roofing, but your bids are $400 or $450 per square?

4. ) If your house had paint knocked off of it on one side will they pay to paint the entire house if you cannot find matching paint?

It appears that some of these answers may be decided by the state insurance commissioner, clearly others are based upon your policy.

Here is what I have been told by one insurance company.  We only pay for the side where the siding was damaged regardless of if you cannot match it.  We will pay to strip off all layers of shingles, but will not pay for new decking unless the hail was what damaged the sheathing.  In my case it is asphalt over shake shingles, and the shake shingles are on 1 inch by 4 inch boards with a 4 inch gap inbetween them, so all new sheathing is required.  One insurance company said their deductible for hail is different than any other claim so the $1K deductible for say a fire, is now a 2% deductible of the total value of the house insured amount.  So my deductible on a $100K house is now $2K, plus they take out the depreciation of the old shingles.  A 20 year old roof with 30 year shingles that costs $6k in shingles is depreciated by 2/3s, so you only get $2K for shingle costs, and then take out the deductible.  The good news is that where both windows were broken out they pay to replace the carpet, not just clean it.  There is no depreciation on labor costs.

Any feedback from others who have weathered this storm (pun intended) is welcomed.  I will post my experiences as I learn, in hopes of helping others. 

P.S. My insurance agents did not know the answers to these questions, so ask yours now.

[H. Page Dyer III]

@Jerry W. - I am speaking from my experience as a restoration contractor here in Colorado, but regardless of state, many things will be similar. Make sure that your contractor is licensed in your state and can list you as additionally insured on the contractors COI (also a great way to make sure the contractor is insured). Most insurance companies will allow up to 2 years to complete the work, so no one has to rush to sign a contract and get work complete. Much of the actual coverage is dictated by the policy language for each property under that policy. With that said, your scope of loss that lists all the items that are to be replaced will “RCV”, “ACV” and the “Depreciation”.

The “RCV” is the replacement cost value assigned by the estimating software based on geographic guidelines. The “ACV” is the actual cash value for the work at the time of the adjustment/loss. Typically, a check for the ACV amount is given to you to get the work started with your contractor of choice. The depreciation is paid out at the end. If the amounts listed under the depreciation have “($12.34)” it is Recoverable. However, If the amounts have “<$12.34>” it will be NOT paid out at the end when you or your contractor of choice submits all the final paperwork and these amounts are Non-Recoverable.

The process of supplementing is how to ensure that the other things you mentioned (additional layers, drip edge, code items, etc.) are included in the scope review. If done at the beginning, it tends to be an easier conversation when working to get paid out and understand coverage. Other things to consider and know is if your policies included O&L-Ordinance and Law (code upgrades). As most municipalities require work to be brought up to current adopted code guidelines. This can become a large out of pocket expense if the policy doesn’t have the coverage and needs to be code compliant.

As for the one side vs entire property, most adjusters will tell you it this is a Non-Matching state and that they aren’t required to replace more than was damaged by the event. This is true. And no one can guarantee that you can get the entire property done with one side of damage. Using companies like iTEL to analyze the product will show if the product was discontinued or can be substituted with a similar product. This is likely easier with a type of vinyl or aluminum siding but not as much with paint.

Deductibles are moving more and more toward the 1-3% value of the property. So it is not uncommon to see deductibles of $2,600-$5,000. It’s always best to talk with your licensed