Most people usually don’t think about their roof unless there’s been a recent hail storm or a damp spot appears on a room ceiling. As long as it’s not leaking, we tend to ignore it even when we see it pulling into the driveway. This past week roofs have been the subject of three conversations, two were with clients and the other with a Dallas realtor on behalf of a client with an offer on a home.
While a homeowner may not think about their roof, insurance companies do, a lot. That’s why a roof can impact a home insurance policy on one of three ways. It can lower the cost of the home insurance, cause it to cost more, and in some cases lead to a policy being cancelled or not renewed. Anytime I talk with a prospective client, we discuss the home’s roof to determine if the roof will save them or be an issue we need to address.
Insurance Savings: There are two ways a roof reduces the price of home insurance. One is based on the newness of the roof itself, the other is based on the material the roof is made of. Regardless of the home’s age, I ask every buyer and homeowner, when the roof was last replaced. Most insurance companies provide a discount for roofs that are 10 years old or younger, regardless of the age of the home. The reason for the new roof discount, is insurers know they are less likely to leak and are typically in good shape.
In addition, many Texas insurers will provide a discount if the material the roof is made of is hail resistant. Hail resistant surfaces include metal roofs, or roofs covered with tile, slate, concrete, or fiberglass shingles. These surfaces result in an attractive discount from most insurance companies. In order to qualify for the hail resistant roof discount or credit, the homeowner usually needs to provide a certificate from the roofer stating the classification (1-4) of the new roof.
Increased Insurance Cost: A roof can also raise the cost of home insurance based on its age and type of roofing material used. Due to the recent number of hail claims, many insurance companies in Texas have changed the way they’ll insure an older roof. These companies either raise the wind/hail deductible from 1% to 2% of the dwelling value or will only insure it for actual cash value instead of replacement cost (see http://188.8.131.52/~wiseinsu/the-two-types-of-home-policies/) for roofs 15 years old and older. Whether the deductible is raised or the roof is insured on an actual cash value basis, the impact is the same; the homeowner will pay more out of pocket for a roof related claim.
The type of roofing material used can also impact the cost of home insurance. Roofs covered with steel panels, concrete shingles, slate, or tile cost more. Their higher cost is factored into the replacement cost calculation each insurance company uses to determine the amount of home needed to replace it if a loss occurs. More expensive roofs mean higher insured values and higher premiums.
There are still some homes in the Dallas / Fort Worth area that are covered with wood shake shingles. Not every insurance company will write a wood roof, and for those that do, they are typically insured with a higher wind/hail deductible of at least 2% of the home’s insured value and may be subjected to an additional surcharge of 10% to 20%. The reason for the surcharge is if the roof’s replaced, it will need to have plywood decking installed in addition to new shingles.
One of the calls I received this week involved a home with an overlay or more than one layer of shingles. There are two types of overlay roofs we run into from time to time; roofs with two layers of composition shingles and composition shingles over wooden shingles. This happens when a roofer simply lays new shingles over old shingles to keep the roof replacement cost down. Insurance companies don’t like them because they cost more to replace due to their being two layers that need to be removed before putting the new roof on.
The insurance company the buyer has been with for many years refused to write a home. While we have several companies that will write the home with the roof as is, there will be either a higher wind/hail deductible or a surcharge on the home premium. Either way, the impact is the homeowner will pay more for their home insurance than they should have to.
Declines and Non-Renewals: Every home policy that’s written is followed up with a home inspection, regardless of the company that writes the policy. The purpose of the inspection is determine if the home’s condition is acceptable to the insurance company. Some of the roof related issues requiring the homeowner’s attention include cutting back tree and shrub limbs to keep them from touching the roof, repairing flashing around the edges of the roof, and replacing boots on vents.
Once the repairs are made, we submit photos of the home to underwriters showing the work has been completed. Failure to complete these tasks can result in the policy being cancelled within a 60 day period or not being renewed next year. Most homeowners agree with what needs to be done or realize if they didn’t make the requested changes or repairs, it would come up again with the next insurance company.
Next time you pull into your driveway, look up at your roof. Can you take advantage of one of the discounts offered or do you have a project that needs to be addressed? Share your comments, questions, and experiences with me in the comments section of our blog or on our Google + and Facebook pages. I’d love to hear from you!