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No More Free Roofs?

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Paul George,

No More Free Roofs?

We love our insurance companies; we hate our insurance companies.

If you haven’t noticed, insurance companies are tightening up requirements on roof replacements.  It is the consequence of their own doing.  Just about every homeowner in our area has had a roof replaced, as the average home in Ohio is over 40 years old. The most common kind of roof in the Midwest is the asphalt shingle roof and the technology hasn’t changed much over the years.  Shingles are rated by years of expected life. Most asphalt shingle roofs are designed to last 30 years.

Designed, yes, but in all actuality, they rarely last that long.  A common scenario in the past was that a wind or rain/hail event caused damage to a roof, and it was pretty easy to get a new roof paid for by their homeowners insurance company.  Roofing companies were very persuasive to prove something other than age caused the roof to fail.  Homeowners loved the fact that a 20-year-old roof was covered if they were “lucky” enough to have hail damage.  Even if only a portion of the roof was damaged, roofers claimed the repaired damaged area would not match the existing shingles so the whole roof would need to be replaced.  In the past, insurance companies did not push back.  In many cases, the roof might have been damaged but not leaking, and left some homeowners with a check for a new roof that they subsequently wouldn’t get replaced.  I have had situations where I sold a house, the roof was inspected, and it was deemed that a new roof was needed.  The homeowners received a check years ago for the roof but did not see the need to replace it when it wasn’t leaking.  That process has since changed but it happened a lot during the last “derecho” that hit our area.

The insurance companies were too generous in handing out new roofs in the past no matter what the age or conditions were.  Now, they are changing.  The pendulum is swinging the other way (too much in my opinion).

My sister got a notice from her insurance company out of the blue, threatening to drop her if she did not replace her roof or prove it was less than 10 years old.  If you are purchasing a home, many insurance companies will not cover it if the roof is more than 10 years old.  Many are only covering a portion of the roof replacement cost and are depreciating for the age of the roof.  Many are using an ACV (actual cash value).  What’s the value of a 15-year-old roof?  It might be 50% of the cost of a new roof so a $20,000 roof might cost you $10,000 out of your own pocket.  I have had buyers purchasing a home with a 15-year-old roof, but they had a really hard time finding an insurance company to cover the house, it delayed the closing for a week (their mortgage company required it of course).

Every insurance company is different so needless to say, you need to talk to your insurance agent.  Many of the companies have changed their policies and many homeowners are caught off guard by the changes, so make sure you have a conversation with your agent.

 

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