What is the difference between filing an insurance claim and buying a new roof out of pocket (retail)?
For this month's post, we addressed one of the questions we often get in the field. When owning a home most mortgage companies will require you to have the dwelling insured to prevent big losses if a natural disaster or accident happened to the home, when it comes to choosing what insurance to buy is, of course, up to you, the one thing you should consider getting is a recoverable cost value policy, instead of actual cash value, even though these policies seem to be a bit more expensive, they will save you thousands of dollars in the long run, when your home gets hit by a storm or natural disaster. When your home gets hit by a storm, you want to get a knowledgeable contractor to check for any damage to your roof and other structures, and you also want someone that knows what to look for if your home has damage.
Once the damage has been found; you should file a claim with your home insurance company, to make sure all damage done can be confirmed by an adjuster. It is important to have your contractor present at your adjuster meeting to make sure all damage is accounted for and to validate the damage generated by the storm. Your contractor will be your advocate and help account for all repairs as needed. Please note we can help you through filing your claim, meeting with the assigned adjuster, and sending all necessary paperwork to complete the insurance claim process from beginning to project completion. Anyways, going back to the differences… Once the adjuster report is done and the claim has been approved you will receive a scope of work from your insurer that will tell your contractor what the project will cost to make the repairs needed or replacement of the same type of roof your home originally had so in most instances, your insurance company decides what will be paid out to you to get a new or repair your roof. At this point, you do not need to summon various bids or estimates, because your insurance company has already determined the cost of your specific claim.
You will first receive an initial check called ACV (actual cash value) which is the depreciated value of your damaged roof in current conditions (which means it is not the actual complete payout) the initial check will be to get your repair or replacement started. This check is usually just one portion of the total cost to replace or repair your roof and any other structures affected, you will of course have to pay your deductible on a separate payment. Please note it is considered insurance fraud to NOT pay your deductible and to receive payment from your insurance company and not fulfill the repairs or replacement.
Once the repair or replacement project has been completed you will now get a second and perhaps a third check from your insurer called RCV (replacement cost value)Check, this accounts for the other portion of the cost now covering in full the value of your new roof. This means your new roof should continue to be covered by your policy since you got it replaced or repaired.
On the other hand, when requesting bids from different contractors to find the lowest bid it is automatically considered a retail project, meaning you will be paying the project out of pocket or at retail price, this is the only way to get a lower price than the insurer dictates. When filing a claim, getting it approved, and then requesting bids from different contractors. This would mean you are pocketing the money from your insurance company, which would make it fraud, most insurance companies will eventually catch on because you have to provide proof that your roof has been completely repaired or replaced for them to release the rest of the claim payout and continue insuring your roof in the future when receiving different bids, please make sure you are considering the roof grade your bidders are providing and if they are including a partial or complete tear off of the old materials (both shingles and felt or if metal, tear off to the deck), this is very important for the longevity of your newly replaced or repaired roof. We are customer advocates and insurance specialists and are happy to deal with your insurance claim process and help you get the best roof possible for your HOME.
