With so many storms happening in the midwest where we are — in St. Louis and Oklahoma City especially — incurring damage to your home due to a storm is certainly stressful. Here are some things to keep in mind regarding your homeowners policy. If you have homeowners insurance, damages to your roof are covered.
There are two primary types of policies: Replacement Cost Value (RCV) and Actual Cost Value (ACV). Every insurance policy has a deductible. The deductible is the portion of your claim that is not covered by your insurance company. Note that you are responsible for your deductible – a specific amount or a percentage of your home value (usually 1-2%).
After the adjuster has been out to your home, it takes approximately 2 weeks to receive your first check. If the estimate is LESS THAN your insurance coverage (ACV + depreciation), you can notkeep the money. Submitting an inflated invoice for insurance replacement work is insurance fraud. If you are ever in a situation with a contractor that would permit this activity, stay away.
The First Insurance Check
The first check from your insurance company is the actual cash value (ACV) check, which may be co-endorsed to your mortgage company. Many contractors will ask for this check prior to doing any work or delivering material. The reason being is that they may need the funds to pay for materials. It is not always the case, but it could be an indicator of the financial stability of the contractor, so beware. In most cases you should never pay a dime before your roof is complete.
The Second Insurance Check
The second check is for depreciation, which is the difference between the ACV and the total replacement cost for your roof. This check will vary in size or percentage of your claim based on the age and/or condition of your roof. On most insurance policies (RCV), your insurance company will likely hold back the amount of your settlement that is not paid unless and until you need it. The depreciation check is not dispersed until after you submit the final invoice, and depreciation is not paid unless and until you need it.
You do not get to keep the difference between the contractor invoice and the amount of the depreciation check, so selecting the lowest bid isn’t beneficial.
Work with Construction Insurance Specialists
At Innovative, we use the same software that many insurance providers use to cost out their claims and often ICR can do the work for insurance proceeds. To do this, sometimes we will work directly with your insurance adjuster to make sure that you get paid all of the insurance proceeds that you are due so we can install a full, protective roofing system – a system that you deserve from your coverage!
Beware of contractors who claim to be insurance specialists that work 100% from your insurance paperwork without physically inspecting your roof. A quality, reputable roofing contractor would never do this. Your roof must be fully evaluated inside and out. Often, the insurance adjuster’s scope of work is based on a small section of the roof and may miss several key components. Innovative Construction and Roofing is not an adjuster – we are insurance specialists that work with you and your adjuster to make sure your insurance claim gets paid correctly.