Roofs are one of those things that keeps coming up when I talk with people about home insurance in Texas. This is because roofs impact homeowners and home buyers in so many ways: they can cause the home insurance to cost more, cost less, or impact it in how a weather related claim is paid (see http://22.214.171.124/~wiseinsu/home-insurance-roofs-impact/).
There are two things home insurance companies look for when determining whether to charge more or give a discount on the home insurance premium and also affect how to address a roof claim. These are: a roof’s age and the material used to make the roof.
Roof Age: The age of the roof has a direct impact on what most insurance companies charge for home insurance. Many insurance companies provide a discount on the home insurance for roofs less than 10 years old, some offer a discount if the roof is less than 20 years old.
This may be written as a declining discount meaning the discount becomes less each year the policy is renewed until there is no discount on the home policy based on the roof attaining a certain age. A few companies utilize a one-time discount that’s offered when the policy is initially written. In these cases, the discount falls off when the policy renews for the second year. If you’re buying a previously owned home, knowing when the roof was last replaced is very important if you’d like to save money on the new home policy.
Homes with roofs older than 10 years can have a surprising impact on the way a roof claim is handled. Many companies are changing how they write the roof due to the large numbers insurance companies have paid for hail claims the last few years. Some companies are changing the home policy for roofs older than 10 or 15 years. These changes may result in a roof being covered on an actual cash value basis instead of on a replacement cost basis (see http://126.96.36.199/~wiseinsu/home-insurance-replacement-cost-actual-cash-value/). When this happens, the roof’s value is depreciated based on its age so that less is paid for a 15 year old roof than one that’s only 10 years old.
Other companies raise the deductible from 1% to either 1.5% or 2% of the home’s insured value. For a home with an insured value of $200,000, this raises the wind / hail deductible from $2,000 with a 1% deductible to $3,000 or $4,000 for a 1.5% or 2% deductible. Whether the deductible is raised or the claim is paid on an actual cash value basis, the net result is the homeowner pays more out of pocket to replace the roof when it’s damaged.
Roof Material: What a roof is made of can raise or lower the cost of the home insurance. This happens in two ways; it impacts the home’s insured value, and it can provide a discount. Most home roofs are covered with composition shingles. These are the most inexpensive roofs and are sold based on their life span, a 10, 20, or 30 year roof. No discount is given based on the life span of the shingle, however, if hail resistant fiberglass shingles are used, most insurance companies will provide an attractive discount on the home insurance. The key to receiving this discount is having something which shows what category or class of hail resistant shingle was used. The higher the number, the greater this discount.
There are other types of hail resistant roofs including steel, slate, Spanish tile, and concrete shingles. Some insurance companies still want to have something showing the hail resistant class of the roofing material, while other companies automatically apply a discount because they know how hail resistant they are. The other thing to note when these materials are used is they are more expensive and add to the insured value of the home. A higher home value has a correspondingly higher wind / hail deductible, however, the discount will help offset the cost over a few years.
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