Insurance Claim Questions And Answers
Why Getting 3 Roofing Bids Costs You Big Time!
Q: WHY WOULD MY INSURANCE COMPANY REPLACE OR REPAIR MY DAMAGE?
A: The purpose of homeowner's insurance is to protect homeowners against losses in their property's value due to damage that is beyond their control. If you have hail or wind damage, you have experienced a financial loss in your original investment (home). Your insurance policy covers you to bring the property back to "whole". Your insurance company will compensate for the total cost in today's dollars for your loss and replace or repair of most of your damaged property.
Q: WHEN AN INSURANCE ADJUSTER INSPECTS MY ROOF, HOW DO I KNOW IF HE UNDERSTANDS ROOFS ENOUGH TO SPOT HIDDEN DAMAGE?
A: The best results, for the benefit of homeowners, is obtained when an experienced hail damage inspector walks through the inspection with the insurance adjuster and calls to the adjuster's attention any damage that he sees.
Q: SHOULD I GET SEVERAL BIDS OR ESTIMATES?
A. When insurance is paying for the work, the dollar amount of the bid is not important as long as it is equal to or less than the insurance company estimate. In all such cases, you will only be paying your deductible, so your cost will be the same. Therefore, you should choose your contractor based on the one you feel most comfortable with and whom you feel will perform the best quality job. Shopping for the lowest bid will not allow you to put the extra money in your pocket. The insurance company will pay based upon the final invoice they receive from the contractor. For example, if the insurance company estimates $10,000 for damages and you pick a contractor that will do it for $8,000, the insurance company will only pay the $8,000. After the invoice of $8000.00 is sent to the insurance company, they will send a payment of $8000.00 (-) your deductible. Of course, a contractor in collusion with a homeowner can submit falsified invoices. However, doing so is insurance fraud, and a felony.
Q: WILL MY INSURANCE COMPANY CANCEL MY POLICY IF I FILE AN INSURANCE CLAIM?
A: If your roof has any damage what-so-ever you have a VALID insurance claim and should file with your insurance company. Insurance companies cannot cancel your policy for an "Act of God" disaster related claim.
Q: IF I DO NOT FILE MY CLAIM WILL MY INSURANCE COMPANY RAISE MY RATES?
A: After a disaster, insurance companies may raise everyone's rates. By not filing your claim your personal rate increase is paying for everyone else's damage except yours.
Q: HOW LONG DOES THE WHOLE PROCESS TAKE?
A: There are so many factors it is hard to say. Generally from the time you call your insurance company you should expect the whole process to be complete within 2 -3 months. The major hold-ups are things like: How long did it take to get the insurance adjuster on site and the report back? Does your mortgage company have to endorse the insurance check? City permits and city inspections may also add to delays.
Q: MY INSURANCE COMPANY DENIED MY CLAIM, SO AM I OUT OF LUCK?
A: You're entitled to a re-inspection once you choose a contractor who is willing to work with your insurance company adjuster. This is where you need a storm repair company to represent you that has the expertise in this area.
Q: MY ROOF LOOKS FINE! COULD IT STILL BE DAMAGED?
A: Roofing systems must be physically inspected by a structural damage inspector to determine if there is actual hail damage. Hail damage is insidious in nature and may not physically cause leakage for years after the hail storm. A report was found, on the Internet, depicting the details of many insurance companies and their adjusters quoting certain engineering companies. It stated that granular loss did not necessarily constitute damage to the asphalt shingles themselves. They tried explaining that the shingles are designed to lose granules, which is partly true. However, shingles that suffer accelerated granular loss due to hail storms decrease the product life and performance. The following report clearly states that granular loss that exposes the asphalt mat of a shingle constitutes damage. Read what one of the largest shingle manufactures has to say:
Q: DO I NEED TO GET MY ROOF REPLACED RIGHT AWAY?
A: The insidious nature of hail damage is that it may pose no immediate threat to the structural integrity of the roof. However, many insurance companies have a "statute of limitations" on how long a hail claim is viable. If you have experienced a loss such as hail damage it is prudent to take care of the problem in a timely manner before it leads to other associated problems and/or your insurance company will no longer cover your damages.
Q: MY ROOF IS NEW; CAN I ASSUME IT IS COVERED BY MY MANUFACTURER’S WARRANTY?
A: No, manufacturers exclude hail impacts from their warranties.
Q: THE INSURANCE COMPANY WITHHELD DEPRECIATION, WILL I GET THAT MONEY?
A. Yes. The money that was withheld will be paid to you when the work is completed.
Q: WHY DID THE INSURANCE COMPANY WITHHOLD DEPRECIATION?
A: There are two reasons that the insurance companies hold some money back. The first reason is to make sure that you get the work done. Past experience has shown them that, if they give the customer all the money up front, many people end up spending it on something else. The second reason is that they wish to make sure that you pay your full deductible. The insurance company's reason that, if you are given all the money to being with, many people would naturally try to find a contractor who would perform the job for the dollar amount in hand. By holding a retainage amount, they can adjust the amount of the final payout based on the roofing contractor's invoice, thus assuring that their customer does pay the deductible.
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Getting 3 Roofing Bids, Favors The Insurance Company, Not The Homeowner!
The way insurance claims are processed has changed over the last 5 - 15 years. It used to be that the insurance company would give the homeowner a check for the full amount of the loss and then the homeowner could bid out the job as they saw fit. If the amount of the job came in below the amount the insurance company paid, the homeowner could keep the difference.
Insurance companies now break the payments into a minimum of two checks, one for the Actual Cash Value (ACV) of the roof, and the second for the Depreciation (DEPR) of the roof. The insurance company is legally required to pay the homeowner the ACV portion of the claim in all circumstances. So, they will send a first check for the ACV portion of the claim. They are NOT required to pay the homeowner for the DEPR portion of the claim unless the work has been verified as completed. This means insurance companies now require an invoice showing the final balance of the work billed to the homeowner.
Why did they make this change?
Because a certain percentage of homeowners were using repair money to fund lifestyle choices, such as going to Vegas or getting a hot tub. This actually contributed to the 2008 housing crisis, as many banks suddenly discovered the houses they had lent on weren't worth what they thought they were because repairs had not been made.
Why Do Insurance Companies Tell Homeowners To Get Bids On Roof Replacement?
Insurance companies are the only ones to benefit from bidding out a roof seeking the lowest bid. Insurance companies hope that home and business owners will try to pocket some money from their claim, that way when they receive the final invoice, and they won't have to pay the full amount of the claim. The policyholder does not benefit and is usually hurt by this as they will typically receive a lower-quality roof, and no extra money in their pocket.
How Should I Select A Contractor If Bids Don't Matter?
* Reputation (Good reviews)
* Quality (Roof installation process, quality control system, good materials)
* Reliability (In business at least 5 years, will be around to service warranty)