Catastrophe… Now what?
We hope you never have to file a claim for roof damage or replacement. In case a catastrophe happens, our helpful guide gives you confidence with easy to understand instructions for disaster recovery.
Reporting the Claim
1. Report your claim to your insurance company by calling the catastrophe claims number in your policy and obtain your claim number. An adjuster will be assigned to you. This adjuster will contact you within a few days to set an appointment to inspect your property damage in order to set an amount for the claim.
2. We consider ourselves to be your advocate and whenever needed, we like to be present at the time of the adjuster’s inspection and measurements. Please call to let us know when your adjuster will be there.
3. Prior to receiving your Adjuster’s Claim Summary from your adjuster, we have the option of using an open ended, contingency contract. This is very similar to the type of contract real estate agents use. If your insurance provider does not find damages warranting replacement, your contract is null and void. There is no further obligation on your part. If the insurance company approves your roof replacement, we then have a binding agreement to install your roof. Important Note: The insurance company initially determines the scope and cost of the job, not the contractor. This is why contingency contracts are helpful. The price can be adjusted later through negotiation if necessary.
4. You will be asked to sign an authorization form allowing us to speak with your insurance company regarding your claim. This will speed up the process and cut back on distracting phone calls in which you relay every message back and forth in a serious game of phone tag. This simple form can be faxed to your insurance company when filing the claim or later in the process. You will still be involved in the decision making process of course, but will not have to address every little detail.
5. Within several weeks, you will receive a breakdown from your insurance adjuster listing all the items on your home to be replaced and/or repaired called an Adjuster’s Claim Summary. When you receive this Adjuster’s Claim Summary, fax a copy to our office so that we can review the data to ensure that an adequate settlement is reached. Depending on the experience of the adjuster, there may be details the adjuster has overlooked. They are extremely busy following a storm, and many have no roofing background. The missing items will be noted and negotiated. The insurance company will most likely fund these through supplements.
6. Insurance plans are written two different ways. They will usually be either Actual Cash Value Plans or Replacement Cost Coverage Plans. If you have an Actual Cash Value plan, you will receive one check around the same time of your Adjuster’s Claim Summary. This check will be the adjuster’s figure for replacing the roof based on his or her calculations, minus the depreciation for the age of the roof (A percentage of the replacement cost is withheld based on the amount of years left on the life of the shingles) and minus the amount of your deductible. You will personally have to fund the amount of your deductible. There is no legal or ethical way around that. For example, let’s say you have chosen this type of policy and your $100,000 home has 20 year shingles that are 10 years old, with a 1% deductible. If the price of your new roof is $5,000, your insurance company will pay half of the replacement cost and withhold the amount of your deductible ($2,500-1,000). The check you receive would be $1,500. You would be responsible for paying the other $3,500 out of pocket.
If you have a Replacement Cost Value insurance policy instead, you would most likely receive your funding in two separate payments. You would still receive the same Actual Cash Value check with the adjuster’s claim summary. However, when the roof job is completed, you can request a second check from your insurance company for your Replacement Cost or what is sometimes referred to as Recoverable Depreciation. To keep our same scenario, if you had no other changes to the claim summary, this reimbursement check would be for $2,500, for the amount they withheld for the depreciation of the aging roof. You are still responsible for your deductible. The process for requesting this check is explained further down.
7. If this adjuster’s summary does not adequately cover the expense of a quality roof replacement, we will negotiate to get what you deserve. This is when having a seasoned contractor who understands the insurance process is vital. This back and forth process may take 4-6 weeks, depending on availability of your adjuster. It is important to be patient during this process. The insurance companies have certain steps or layers of resistance they go through as a rule. By the end of negotiations, we are usually very successful in obtaining supplements to cover everything that is needed for a high quality roof. Many claims do need supplementing to provide a quality roof job, which is what you want as a homeowner.
8. Important Note: The checks from the insurance company are written to both you (the policy holder) and your lien holder (mortgage company if applicable). It must be endorsed by both parties and deposited in your account. It takes time for the mortgage company to endorse the check and return it to you, so do NOT hold on to this check. Send it off immediately to the lien holder for endorsement. We get paid by you personally, not the insurance company. The funds will need to be available in your account upon completion of the job.
Many banks hold insurance checks for up to 10 days before releasing funds. After you receive your check, it may take up to four weeks to actually have the funds available in your account. This is why we encourage you to not hold on to the checks, but to send them off immediately for endorsement.
9. Once an adequate price is determined through negotiations (or immediately if the first check adequately funds the project from the beginning) and you have received and processed your first check from the insurance company we will schedule your roof replacement. Once the job begins, it typically will take only a couple of days to provide you with a beautiful new roof that will last for years to come.
10. At the completion of the job, we will collect a personal check from you for the full amount of the roof replacement, which is the amount decided upon by the insurance company after negotiations. You will most likely have received any supplement checks by then. We will give you a receipt for the total cost of the job. (The first insurance check + your deductible amount + any supplements agreed upon by the insurance company.) If you have a Replacement Cost Value Policy, you will fax this receipt to the insurance company immediately in order to show them that the project has been completed, your deductible met, and that the funds have been spent as they were designated. Along with the receipt, request them to send your reimbursement check for your “recoverable depreciation”, or replacement cost value. Recoverable Depreciation correlates to the amount they discounted in the first actual cash value check for the depreciation for the life of the roof. (Remember our example above for a roof with 20 year shingles that has aged 10 years.) They will now issue another check for the balance of the job. If you do not fax the necessary items and request the depreciation check, they will not send another check. It is your responsibility to request it. This two step process is an effective method used by insurance companies to make sure the work they pay for is actually completed. It takes more time, but serves a valid purpose overall.
11. To summarize, you will be paying for your roof job upon completion with a personal check. If you have a Replacement Cost Value policy (also known as a Recoverable Depreciation Policy) the only out of pocket expense you will ultimately have at the end of your project is your deductible. The insurance company reimburses you for the full amount of the roof job, except the deductible you agreed to when you set your policy. If you have an Actual Cash Value policy, you will receive a percentage of the replacement cost (depending on how much your roof has aged) less your deductible.
Tips and Secrets
12. This can be a very confusing process, especially if it is your first claim, but we can help you along the way to make sure your interests are not overlooked by your insurance company or an overworked, well meaning adjuster.
Important Note: Read over your policy to make sure you have an RCV policy (one with Recoverable Depreciation.) Otherwise, you may be personally responsible to fund a large portion of your project.
One Last Important Note: In most insurance related projects, the only out of pocket expense for which you will be responsible is the deductible which you set. To attempt to avoid paying your deductible by submitting inflated prices from a contractor or keeping the insurance money without using it as designated is not only unethical, but constitutes insurance fraud, a third degree felony. The system works better for everyone when proper procedures are followed. Make sure to set a reasonable deductible.