Posted on Monday, February 20th, 2023 at 12:10 pm
You must follow specific steps to file an insurance claim for roof damage. However, the process can be confusing and stressful. Most challenges are related to recoverable depreciation. Homeowners often don’t know whether their insurance policy offers it and how it works.
Here we explain recoverable depreciation, the insurance policies that offer coverage, and how a roof damage claim involving recoverable depreciation works.
What Is Recoverable Depreciation?
Roof depreciation refers to how much the value of a roof decreases over time due to wear and tear. Depreciation is the difference in dollars between the replacement value of the roof and its cash value. The insurance company will determine your roof’s depreciation when you file a claim.
You might be able to recover your roof’s lost value through recoverable depreciation, depending on the type of policy you have. The first check you get from the insurance company is for the current value of your roof. Then you’ll receive a final check for the depreciated value of your roof when the repair or replacement is done.
Insurance Policies with Recoverable Depreciation
Some insurance policies offer policyholders the right to recoverable depreciation. Two types of policies are available:
- Actual Cash Value Policy – An Actual Cash Value (ACV) policy pays for the current depreciated value of the roof. The insurance company will send a check for the actual cash value once your claim is approved. You are responsible for out-of-pocket expenses for repairs beyond the ACV.
- Replacement Cost Value – A Replacement cost value (RCV) policy pays for an entire roof replacement. However, you don’t receive a check upfront. The first check is for the actual cash value of the roof. Once the job is complete, you receive a second check for the depreciated value.
Recoverable Depreciation in an Insurance Claim for Roof Repair
If you have an RCV policy, once the insurance carrier approves your roof damage claim, you should receive an estimate for the scope of work necessary to restore your roof. The insurer should send you a check for the actual cost of your roof while withholding compensation for the recoverable depreciation.
After you hire a roofing company and they replace your roof, the roofing contractor can submit proof to the insurance company of the work they did according to what’s covered by the policy. Anything missing from your claim will be supplemented by that information when the job is complete.
If the insurance company is satisfied with the proof, you should receive another check with the recoverable depreciation covering the remaining costs of repairing your roof. However, if the roofing company doesn’t complete the scope of work exactly as the insurer estimated in the claim or the job is never finished, you won’t receive the depreciated part of the claim.
That means you will likely have to pay out of pocket for the expenses you incur from the services you receive. Getting the insurance company to pay for unfinished work is insurance fraud.
How to Avoid Insurance Fraud in a Roof Damage Claim
You only get recoverable depreciation if your roof is replaced or repaired according to the scope of work listed in the insurance claim documents. That’s why insurance carriers require proof of the work performed to confirm it matches the estimate they were provided.
If you don’t meet the requirements of the claim and request a check for recoverable depreciation, the insurer might accuse you of fraud. Many homeowners don’t realize they commit fraud if the roofing company they hire doesn’t complete the job or does work not covered by the claim.
However, you also commit insurance fraud if you purposely hide information or evidence of additional expenses and try to secure another check for the recoverable depreciation.
You can avoid accidental or intentional insurance fraud by hiring a reputable roofing company. Maintain ongoing communication during the project to ensure the contractor follows the scope of work the insurer has agreed to cover. Inform them of your insurance claim and provide a copy of the paperwork so they know what they can and cannot do while performing the job. You should also ask for copies of every expense receipt related to the repair or replacement to provide to the insurance company.
Get Help with Your Roof Repair
RoofsOnly.com offers a range of dependable roofing services to residential and commercial roofing customers in Texas. We won’t try to talk you into unnecessary services that don’t meet your needs. Your goal will be our goal. We will only do the job you hire us to do.
If you’re looking for roof repair or replacement services suited to your budget and schedule, call (512) 746-7090 or contact us online for a free estimate today.