Is Homeowners Insurance The Right Choice For You?

If you’re a homeowner, then chances are you have insurance to protect your investment. And if you’re considering homeowners insurance, then you’ll want to read this first! We’ve outlined some of the pros and cons of this popular policy below, so that you can make an informed decision before choosing a provider. 

Everybody’s Getting New Roofs, Do I Need One Too?

As any homeowner knows, a roof is a vital part of your home’s structure. Not only does it protect your home from the elements, but it also helps to insulate your home and keep out pests. However, roofs can also be expensive to maintain, and they typically need to be replaced every 20-30 years. So, if you notice that your neighbors are all getting new roofs, should you replace yours as well?

The answer to this question depends on a number of factors, including the age of your roof, the condition of your roof, and the climate where you live. If your roof is more than 20 years old and starting to show signs of wear and tear, then it’s probably time for a replacement. Similarly, if you live in an area with severe weather conditions (e.g., high winds, hail), then a new roof may be necessary to protect your home from damage. However, if your roof is in good condition and you don’t live in an area with extreme weather conditions, then you may not need to replace it. 

In the aftermath of a major storm, it’s important to have a pre-claim inspection conducted by a knowledgeable contractor. This will help to ensure that any damage sustained is properly documented and that you have a good understanding of what needs to be repaired or replaced. However, it’s important to keep in mind that insurance companies have their own criteria for determining whether or not damage is covered. 

So just because your neighbor got their roof replaced doesn’t mean that you will automatically be eligible for the same coverage. The adjuster will take many factors into consideration, such as the age of your roof and the severity of the damage, before making a determination. In the end, it’s important to work with both your contractor and your insurance company to make sure that all of the necessary repairs are made and that you are getting the coverage you need.

However, what many policyholders don’t realize is that some insurance carriers have different criteria for roof replacement than most other insurers. The criteria to establish this is based on the amount of damage found within 100sf of your roofing materials (not unlike every other insurer), however, some insurance providers may require 13-16 hail hits within this 100sf, whereas State Farm may require 5-8 hits per 100sf. 

This means that the provider must find Double the amount of damage to warrant replacement, so if your roof is damaged, by the standards of countless other companies, you are stuck with a damaged roof that you are now responsible for replacing, while your neighbors’ roofs are being replaced at no cost to them. 

Why? Simply put, your premiums do not increase for filing a claim or being paid for a claim due to a catastrophe; they only go up when other claims are being filed in “your area.” 

Estimating the Cost of Damages

Insurance carriers have a large network of adjusters. These adjusters are responsible for investigating claims and determining how much the company should pay out. While most adjusters are honest and fair, some may be difficult to work with. This is often the case when a contractor is involved in the claim. Contractors are typically knowledgeable about the repair process and can offer helpful insight into what should be covered and why. However, when a contractor challenges an adjuster’s findings or costs, the adjuster may become difficult to work with. This can be frustrating for both the contractor and the policyholder. If you find yourself in this situation, it’s important to stay calm and be polite. Remember, you’re more likely to get what you want if you’re respectful and professional.

It’s no secret that insurance companies are looking to save money whenever possible. And while there’s nothing wrong with that, the way some insurance companies go about it can be very frustrating for both customers and businesses alike. In particular, several insurance companies have developed a reputation for being particularly difficult to work with when it comes to disputes over repair costs.

The reason for this is that they take a very hard line when it comes to negotiating repairs. Their adjusters are often very matter-of-fact and inflexible, and they’re not afraid to be rude if they feel like they’re not getting their way. This can make it extremely difficult to get them to agree to reasonable repair costs, even if it’s in the best interest of the customer.

There are still many insurers out there who are willing to work with businesses to ensure that both parties are satisfied with the final repair cost. And while a few insurance providers may not be the easiest company to work with, they’re certainly not the only option out there.

Restoration projects can be quite complex, with many different variables to consider. Asking a computer software to properly process all of those considerations would be simply impossible. That’s why we use the same estimating software as most insurance companies. That’s why we feel it’s so important to have a discussion with the adjuster. They’re the ones who have the knowledge and experience to properly assess the situation and come up with an accurate estimate. Without their input, it would be very easy to miss something important and end up costing either the insurance company or the homeowner more money than necessary.

What is RPS coverage?

From what we can piece together, RPS seems to be a new way for some insurance companies to save money by severely limiting what they will pay out on claims. We urge anyone with a Homeowners Policy to call their agent immediately and demand an explanation of their coverage. 

RCV, which stands for Replacement Cost Value. An RCV policy is basically an insurance policy that pays out the full cost of repairs, minus your deductible, when you complete the prescribed repairs. So, if you have an RCV policy and your home is damaged in a storm, you would get paid the full cost of repairs less your deductible once the repairs are completed. In contrast, some insurance policies only pay a portion of the cost of repairs, regardless of whether or not the repairs are actually completed. 

An ACV policy stands for Actual Cash Value, and upon completion of the prescribed repairs you will not receive depreciation. Therefore, you’re now responsible for your deductible and the depreciation amount. Think that last one was bad, in walks an RPS coverage. RPS basically means they can issue you, and charge you, for an RCV policy but pay you as an ACV policy if they feel like your vehicle isn’t worth very much at the time of the claim. They DO NOT have to notify you that they are downgrading your policy type, nor do they HAVE to give a reason why. 

When it comes to roof replacement, most homeowners are only covered for the actual cash value (ACV) of their roof. The ACV is the cost of the repairs minus the depreciation, minus your deductible. 

For example, if you have a 30-year architectural roof that is now 15 years old (halfway through its life), you would then depreciate it by 50%. So, if the cost to replace your roof is $20,000, your ACV would be $10,000 (minus your deductible). This means that your insurance provider would only owe you $7,500 and you would owe $12,500 out of pocket. 

Cost to replace roof   $20,000.00

(minus 50% depreciation)  $10,000.00

   (minus your deductible)   $2,500.00

Insurance Provider now only owes  $7,500.00

And You’ll Owe $12,500.00

Be sure to check with your agent to see what type of coverage you have.

The Bottom Line

We’ve all heard the saying “you get what you pay for”. When it comes to insurance, this couldn’t be more true. Your premiums are meant to protect you in the event of an accident, but if you don’t fully understand your policy, you may not be as protected as you think. That’s why it’s so important to review your policy regularly, and form questions if anything is unclear. If you’re still unsure after reading through your policy, don’t hesitate to call your agent. They should be more than happy to help explain any details or clarify anything that’s confusing. 

Remember, when it comes to insurance, there is no such thing as a stupid question. You’re making a financial investment, and you want to be sure that you’re fully protected in the event of an accident. Asking questions now will save you a lot of headache (and money) in the long run.

For more information or to find out how Exterior Plus can help you, call us today at 952-345-3408 or fill out a contact form on our website. We look forward to hearing from you soon!