How to get a free roof

Question

Whenever a cloud passes overhead in my neighborhood, the "storm chasers" aka roofers start ringing the doorbell saying hail was in the area and they can likely get me approved for a new asphalt-shingle roof and siding. I personally think it's a crock. The house is 13 years old, with aluminium siding. LMFAO WTF kind of hail would we have to get to damage aluminium siding? Most of my neighbors, with houses of the same age have gotten roofs replaced. I call BS because my roof faces the same "hail storms" and is functioning just fine.

My question is, does anyone use this to their advantage on investment properties they own? Specifically, flips they own? I'd imagine if you bought a house, then quickly filed a insurance claim, the insurance company would want to see the dates of the last hail storm, and they would check to be sure you owned the house on or after that date. How often do these "destructive hail storms" pass through any given area every year?

I'm not advocating for, or insinuating fraud. I'm just wondering how, if ever, these types of claims can assist with flipping properties. Thoughts? Stories?

Account Closed · Answer

@Eddie Egelston I was told at an insurance conference that houses that have claims and landlords that have claims are put into a database. Guess what? That affects your premiums. Go figure. So, a house that has a couple of claims may end up not being able to get decent coverage for a decent price. And, this is regardless of whether the claim was justified. Remember the reason Insurance Companies are in business, it is not to insure your loss, it is to insure profit for the shareholders.

Account Closed · Answer

In North Texas, we have much more hail than you.  People often get "free roofs" here.  That being said unless you have a high deductible policy (which many landlords do) you are basically financing a new every so many years via insurance premiums.

I think there have been at least three storms this year within 10 miles of my home with at least baseballs size hail.  One of them had softball size.

Yes that can ruin aluminum siding.

John Mocker · Answer

There's no rule on how many claims are too many.  Each Insurance company has to file their rates for each product in each state with that state's Insurance dept.   It includes the guidelines for acceptable new policies and renewal policies.  Those guidelines spell out how many claims will cause the company not to offer a policy or to renew a policy.  It could be one claim in 3 yearr, 2 claims in 5 years,  etc.

The CLUE system is an Independent non-profit database created to help prevent people applying for a new policy to lie about their claims history.   Since those people are not paying what they should the rates for everyone else were higher when there was no way to double check them.

Michael Meeks · Answer

I've have asked the question about filing a claim and it affecting the cost of insurance and deductible. The answer I received, is you filing a claim does not affect you individually. The insurance companies look at the amount of claims in a region and base premiums on the losses in that geographic area.

I'm sure repetitive claims could be an issue.

Having dealt with multiple insurance companies, as a roofing contractor, I can tell you State Farm was by far the easiest to work with, and far less stringent than other companies I dealt with. This was on single family homes.

They also look at weather data for support of hail reports in the area.

You can go to this website, enter a date and see storm reports anywhere in the US and if hail was reported, along with what size it was.

http://www.spc.noaa.gov/climo/reports/today.html

Generally, you need about 3/4" hail before you start to see any real damage.

Federico Gutierrez · Answer

There's no free meals in life, or in this case roofs.

You'll get what you pay for, get the roof and your premiums are likely to go up or get dropped by the insurance company. They are out to make money

Aaron Mazzrillo · Answer

I filed a claim on one of my properties due to a ruptured hot water heater that the tenant didn't discover for about 12 hours. The wood floors in the house were ruined as well as the kitchen cabinets, drywall, etc. That claim caused me to have problems with insurance quotes on other properties I acquired since. It almost isn't worth it unless the expense is going to be extremely high. My claim was on a rental so I don't know how that might affect you doing flips, but like I said, I had issues with getting new policies on properties since that claim.

Eddie Egelston · Answer

Account Closed, when in fact maybe the reverse should be true? Do they or can they get that detailed in their reporting?

Eddie Egelston · Answer

Account Closed Thanks for the reply. Yes, my hail storms are pretty tame compared to yours. I get it, in the long run you are basically the one paying for the roof through premiums and deductibles.

That's why I specifically mention flips. In that instance it's pretty much just the deductible. If you chose a higher premium, lower deductible, and then file a claim, you add a $10,000 roof to a house and then immediately sell the house. A brand new $10,000 roof may add $5,000 in resale value, if you are replacing a very old and worn roof. This sounds lucrative to me.

Again, not trying to commit fraud, I'm trying to work the system. For example, if you buy a $30,000 used car, and a month later you crash it, insurance picks up the full value of $30,000. However, if you crash that same car 10 years later when the car's market value is $5000 your insurance only pays you $5000.

Compare that to roofs. You install a $10,000 roof, then next week hail destroys it; insurance pays for another brand new $10,000 roof. Alternatively, you install a brand new $10,000 roof and then 20 years later a hail storm destroys it, insurance pays for a brand new $10,000 roof.

That's the inefficiency. Insurance companies don't depreciate the roofs like they do with cars.

Account Closed · Answer

@Eddie Egelston   I suggest high deductibles.  In general, that means less claims.  The damage also tends to be more apparent.

In Texas, it is not rare for entire streets and sometimes neighborhoods to need roof decking.

Jim D. · Answer

Gotta love the creative thinking for some extra yield here. Problem is, of course, that you can't predict the weather, so you can't factor it into your flip budget. Would just have to either get lucky, or commit fraud.On a side note, why the hail are people in North Texas still installing asphalt shingle roofs?

How to get a free roof

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