MISTAKE #6: Not Knowing What Type Of Coverage You Have
There are two basic types of coverage for wind & hail damage on your property: Replacement Cost Value (RCV) and Actual Cash Value (ACV). Your RCV coverage will pay all costs for a full replacement of your roof if it is “totaled” by a storm. An ACV policy will pay only the amount that the roof is actually worth after the depreciation amount has been deducted from the claim. If you have a roof that is 15 years old, then your claims adjuster will account for that when he assesses the value of your claim. This could potentially reduce the amount of your claim by THOUSANDS of dollars.
Why would anyone want an ACV coverage policy?
If they actually knew the details, very few people would probably choose coverage like this, especially here in eastern Colorado, since we get so many hailstorms. The problem is that some roof types will only be covered by Actual Cash Value, so the homeowner may not have a choice if he stays with the insurance company he has. Also, if you have filed a property claim in the past, and did not have the repairs done, your next, future claim will most likely be an ACV claim.
What Should You Do?
If you have an older roof, especially a roof with T-Lock shingles, or if you have filed a claim in the past and did not complete the repairs, you should definitely call your insurance agent before filing a claim for wind or hail damage and ask your agent what type of coverage you have on your roof. An additional question you should ask before filing a claim is whether you have “code upgrade”, also known as “Ordinance and Law.” If you don’t have that coverage, you may end up paying the roofer extra to meet current building codes that were not in effect when your roof was last installed.