Is Your Roof ACTUALLY Covered On Your Insurance?

[Cameron Moore]

Obviously everyone knows that the roof is included in most policies with the exception of Wind/hail Exclusions but are you aware of your deductible? ACV or RC? 

A new roof can cost anywhere from $9000-$30000 depending on material and location. Some investors weigh monthly cash flow against premiums for insurance and If they are not careful, can be talked into a 2-5% deductible on the roof. On a $250k house that is $5k-$12.5k out of pocket for a roof that could only cost $15k-$20k. You are almost self insuring in that case. Make sure your broker/agent is very clear on your deductible. 

The less obvious coverage I see often, is ACV over RC. That is Actual Cash Value instead of Replacement cost. In simple terms, Replacement cost pays no attention to depreciation while ACV factors in the material depreciation when replacing the property. That means the older your roof becomes, the less the insurance company will actually pay when it becomes less functional. 

Make sure you understand your coverage, and try to find a healthy balance between Value and Price. 

[Aaron Porter]

@Kyle Mccaw  Very valid.  that is where knowing your agent, and your agent knowing the market and the products that they sell are absolutely gold!  Texas is hard, especially in the coastal regions.  We only have a couple of carriers that will even write a homeowners/landlord policy, and only one of them will include wind and hail.  In the eyes of the Insurance companies there are way too many roof claims in the coastal areas and if they have to pay out on them (insurance policies are legal contracts, they are legally required to pay out unless it is an exclusion in the contract)  as there are way too many claims in the coastal areas they are forced to make a choice, do we offer the insurance but charge an exorbitant amount for the insurance?  Or do we just not offer it?