I have a roof with 1/2" medium cedar shake shingles. After a recent hail storm, we call our insurance company to inspect for damage. They agreed with our roofer that the damage warrants a total roof replacement. They also agreed on a price with our roofing company to replace it with the same 1/2" shakes. Now that the replacement cost value has been established, we are considering downgrading to a less expensive asphalt shingle. I've been told the cost savings will be captured by myself to help with the deductible. The insurance company now tells me they only pay up to the invoice amount from the roofer. If we were replacing with the cedar shakes, that would indeed be correct. However, I've been paying premiums for years based on replacement cost of the shake roof. Because I'm downgrading to asphalt, shouldn't the savings come back to me? Again, they agreed to the full replacement cost of the wood shakes and it is higher than the asphalt we want to install. Please help!!
Hail Damage
- Thread starter canu4see
- Start date
Danielsfuture
New Member
- 13
Principal of Indemnity?
- 11,997
You have a deductible which means that's the amount you pay before the insurance company pays a dime. That's the policy you agreed to when you paid your policy.
I can see your point and why your thinking is the way it is, but that's just not the way deductibles work. Probably not the answer you were looking for, but it's the truth.
- Thread starter
- #4
So, if the replacement cost of the shake is $30,000 and I have $1000 deductible, then the insurance would owe $29,000. Now I want to downgrade to a roof that cost $25,000, all they have to pay is $24,000? Even though I've paid premiums on a $30,000 replacement cost policy? Seems they should still owe the $29,000 because that was the cost of replacement.
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Danielsfuture - What does this mean? "Principal of Indemnity?"
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Danielsfuture - What does this mean? "Principal of Indemnity?"
Last edited:
- 11,997
Again, I see your point, but your agreement was to pay the $1,000 deductible. That happens first with either type of roof.
Danielsfuture
New Member
- 13
You are not allowed to profit from a claim.
You saved the insurance company money. Rub it in their faces and maybe they wont non-renew you for your claim at the end of the policy period.
You saved the insurance company money. Rub it in their faces and maybe they wont non-renew you for your claim at the end of the policy period.
- 1,473
That seems very expensive roof. 30K to replace your roof.
Brand new roof and it will cost you a $1000 I will take this all day long. Plus ask the adjuster if you take the roof that cost $24k to replace if he can credit your deductible maybe $500.Shake roofs are considerably more expensive to replace.
The point that is getting missed is that you didn't have the roof insured for $30K, you had the roof insured to get replaced at cost. They are paying the cost to replace the roof, always minus the deductible.
No, you can't pocket the difference. Why? Because people would do this all the time. Have a claim, say they want something 'cheaper' but to get paid at the higher value and earn a few bucks. Sets up a huge moral hazard.
In the policy, if you read it, it will say something to the effect of paying actual cash value (depreciated value) until repairs are done with like kind and quality, then payment for replacement cost is earned. What this means to you is if you don't do the repairs (if you could avoid them) is that you will get a check for the value of the roof as it was. After everything is completed, they will cut a second check up to the amount of the repairs (minus deductible) for the work. They will not pay for betterment (higher quality roof than you had).
They are willing to replace the roof with what was there so they are living up to what you paid them for. If you want a different roof, so be it, but you can't profit from it.
Dan
The point that is getting missed is that you didn't have the roof insured for $30K, you had the roof insured to get replaced at cost. They are paying the cost to replace the roof, always minus the deductible.
No, you can't pocket the difference. Why? Because people would do this all the time. Have a claim, say they want something 'cheaper' but to get paid at the higher value and earn a few bucks. Sets up a huge moral hazard.
In the policy, if you read it, it will say something to the effect of paying actual cash value (depreciated value) until repairs are done with like kind and quality, then payment for replacement cost is earned. What this means to you is if you don't do the repairs (if you could avoid them) is that you will get a check for the value of the roof as it was. After everything is completed, they will cut a second check up to the amount of the repairs (minus deductible) for the work. They will not pay for betterment (higher quality roof than you had).
They are willing to replace the roof with what was there so they are living up to what you paid them for. If you want a different roof, so be it, but you can't profit from it.
Dan
- Thread starter
- #9
I'm not upgrading. Of coarse that would be my responsibility to pay the extra if that were the case. But in this instance, they should owe the value of the existing roof. Not only have I paid premiums on this amount, but I've paid premiums on a higher amount because the insurance companies calculate predicted cost of replacement at a future price after appreciation will occur. So, not only are they ripping me off the difference in cost of the two roofs, but also the amount of premium increase for the future price after the value rises. The roof isn't that old but a stagnant real estate/construction market would negate that for them anyway. By the way, the numbers I presented were just nice big round numbers for simplicity. It won't cost $30,000 to replace my roof. There is no moral issue except that the insurance company is taking my money every year and not wanting to pay the value those premiums were based on. How is that an immoral act on the homeowner's part? If anyone is entitled to capture that money, it should be the person paying the higher premium based on the expected cost of replacement. Can anyone quote specifics about policies or laws regarding this issue.
Read your policy. It is in there.
Not moral issue, moral hazard. Strange way of saying it will lead to lots of additional claims.
From what you wrote, they are willing to pay your roof repairs. Have them do it. Case closed. If you are trying to pocket money from the insurance company, then they pay less instead.
If you read your policy, chances are, you will find all of this spelled out in there. I'll grant you, it makes very little sense till you start to put it in context of a claim, but its in there.
If you go find your policy, chances are, you will find a clause similar (if not exactly) like:
This comes from: http://www.insuringflorida.org/assets/docs/pdf/HO3_sample.pdf
page 13 of 22. Don't get concerned that this references FL in the url, its a generic HO-3 policy form, from which most homeowners policies are constructed.
What the limit is for you is number 3, the amount actually spent. They won't pay more than that.
Dan
Not moral issue, moral hazard. Strange way of saying it will lead to lots of additional claims.
From what you wrote, they are willing to pay your roof repairs. Have them do it. Case closed. If you are trying to pocket money from the insurance company, then they pay less instead.
If you read your policy, chances are, you will find all of this spelled out in there. I'll grant you, it makes very little sense till you start to put it in context of a claim, but its in there.
If you go find your policy, chances are, you will find a clause similar (if not exactly) like:
This comes from: http://www.insuringflorida.org/assets/docs/pdf/HO3_sample.pdf
page 13 of 22. Don't get concerned that this references FL in the url, its a generic HO-3 policy form, from which most homeowners policies are constructed.
What the limit is for you is number 3, the amount actually spent. They won't pay more than that.
Dan
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