Working with insurance companies is enough to drive
any sane person crazy.
It seems like with precious few exceptions do I see that an
insurance company has the best interest of their customers
in mind. Hi everybody, this is Tracy Bookman owner
of Homestead Roofing and on today's walk in the park video
we're going to talk about the five ways your
insurance company avoids paying for your re-roof claim.
Now a lot of you know that on our walk in the park videos, we take time to talk
about roof repairs, roof replacements, and the insurance
claim process, but today we are in the aftermath of a hail storm
and so we're in the thick of working with insurance companies
and it is just driving me crazy. So I want to talk about ways that we're
seeing actively right now, that insurance companies, especially the
big ones, are avoiding paying legitimate claims
to their customers for their roof repairs or their roof replacements.
Tactic number one that your insurance company uses to avoid paying for your
roof replacement, is to raise your deductible. Well what
does that do? Well that makes you liable for more of the cost
of the roof replacement. Well you think, okay,
well that's that's legitimate. All right. If they've told me that they're going to
raise my deductible, then I have the opportunity to go look
for insurance somewhere else where the deductible isn't as high. Well,
that's the game that they play though isn't it? Because they "tell you"
that they raise the deductible, but the way that they do that
is by including that information in the declaration page that you get
well, actually, the your policy renewal document that you get every year.
And who takes time to read through that 25 or 30 page
document when it shows up in your email or shows up in your mailbox? But
that's where they've informed you that they've raised your deductible. Okay,
but let me make a note because you're probably
asking yourself, well that doesn't avoid paying for my roof replacement,
you're right. But it's putting more of the the share of the cost
on you as the homeowner to pay for it, and so if your deductible goes from
a thousand dollars to fifteen hundred dollars,
the insurance company just saved themselves five hundred dollars off of
that particular job. Multiply that by thousands and thousands
and thousands of claims that they get. And a lot of times your a homeowner's
deductible isn't going only from a thousand dollars to five
hundred dollars, sometimes it's going from a thousand
dollars to two thousand dollars, twenty five hundred
dollars, six thousand dollars, I mean we've seen ridiculous deductibles
recently, as high as twelve thousand dollars. Tactic number two, that the
insurance companies use to get out of paying for your roof
replacement is, they'll just simply deny the claim.
Why do they do that? Why do they think they can get away with that? Because they
can get away with it. What happens is, you know, maybe a
homeowner calls an insurance company and asks for an adjuster
to come out, and if there's a lot of claims
in the area, or if that company is suffering from a lot of claims because
of catastrophes in other areas, they might
simply just deny your claim, because they know that the
majority the vast majority of homeowners are just going to accept
whatever the adjuster says, and if the adjuster says well there's no damage or
there's not enough damage up there to warrant a claim
the homeowner is going to believe him, because the homeowner trusts
the insurance company and and the, the representatives of the insurance company
and I'm telling you that's not always the best idea.
Sometimes that's an okay idea, sometimes that's an okay thing to do
but not always. We've had plenty of experience
with insurance companies that have denied claims that have had valid damage,
sometimes with with hail hits as big as this
with holes going all the way through the shingle, and the insurance company denies
it. Tactic number three that your insurance
company uses to avoid paying for your roof replacement
is, to just simply fight with your contractor.
So maybe your contractor has sent in an estimate, maybe your contractor has
finished the job and has sent in an invoice asking for payment for a
total dollar amount, and the insurance company will fight
with the contractor about this line item, or that line item, or the price on this
particular line item, or say we don't pay for that particular
item to be installed, or to be replaced or whatever,
on and on and on it goes, all these just little
itty-bitty battles that your roofing contractor has to go through
with your insurance company to get paid what it is that he needs to make
to be profitable on that job and to sustain his business.
But your insurance company knows that they have far more resources,
both in personnel and in capital to be able to fight that battle on an
ongoing basis, whereas, most contractors don't
so they just try to wear the contractor down. Whether it's a roofing contractor,
or a general contractor, or a siding contractor, it doesn't matter,
they do the same thing with any contractor. They try to wear the
contractor down, because they know eventually
the contractor needs to keep his cash flow going, so the contractor will just
simply give up and accept whatever it is that
they're offering to to pay. Tactic number four that your
insurance company uses to avoid paying for your roof replacement
is, that they prorate your replacement coverage.
Well, what does that mean? Well, most people have what's called replacement
cost value coverage on their insurance company, and they
expect that their insurance company is going to
indemnify them for a hundred percent of the cost
of replacing their roof or replacing whatever property it is that's damaged.
And historically that's been what has happened,
is that the insurance company is, is paying the homeowner 100%
to replace the damaged property. But what some insurance companies have started to
do, and a lot of them are starting to follow
suit, pro-rate that replacement coverage. So that means
that it, it's no longer 100 percent
indemnification, 100 percent replacement cost.
So one proration schedule that I just recently saw from one of the major
carriers here in town, shows that, that you have a hundred
percent coverage for the first year, and that's
the first year after you have a new roof installed, but then
after that first year, in year two it goes down to 97 percent.
The next year it goes down, it goes down even more.
Until like after 10 years, if you've got a roof that's 10 years old,
if you file a claim, then you're only going to get 70 percent
of the value of that roof. So here's the implication to you as the homeowner.
Let's say, just like has happened here in the
Colorado Springs area, we get two major storms in a two-year period,
let's, let's say it's five years, and you're
with a company that prorates your coverage. And so let's
say by that fifth year ,you're down to, I don't know,
ninety percent coverage. What that means is that
they're going to depreciate the value of the roof
and you're going to only get instead of a hundred percent
of replacement cost, so that you know five years from now whatever it costs to
replace a roof you would get a hundred percent of that amount,
now you're only going to get 90%, or 95%, or 80%, whatever amount it is so
that 10% amount, hypothetically, that 10% amount comes out of your pocket,
in addition, to your deductible. Again, they're not avoiding
completely paying for your roof, but they're keeping back a significant chunk
of change, for themselves, making - putting that cost
on you, and then when you spread that out over
thousands, or sometimes even maybe even millions of
claims, that really adds up to a lot of dinero
for the insurance company. So here's tactic number five that your
insurance company will use to avoid paying for your roof
replacement, and it's called cosmetic exclusions. Now,
there has been one insurance company, one of the major carriers,
that for the last few years, that's been a big deal for them,
is that they're excluding things that are cosmetically damaged not
functionally damaged. Typically it's only going to be the soft metals, so
vents, vent caps, gutters, that kind of stuff. So if, if it isn't
functionally damaged, meaning that it still works the way that it's designed
to work, but it just has some dents in it, they're
not going to pay for that. But now insurance companies are moving beyond
excluding just simply accessories like gutters, or vents, or
things like that, and now they're moving it to a whole roof.
What we're finding now, is there's one of the major carriers here in this area
that has changed their policy, so if in the past, you have had an
impact resistant roof material installed, so you could get the discount from that
insurance company that they offered, now, you are subject to their cosmetic
exclusion clause, which means that if they come out, and
they - if you file a claim, the adjuster comes out, and he determines
that the, the roofing material is not functionally damaged, meaning the hail
hasn't penetrated it, if it's a shingle it
hasn't broken the mat, if it's metal, it hasn't caused an actual
break in it, it's probably all bent bent up if it's metal, if it's a shingle
it's probably full of pock holes and stuff like that,
but if it's not functionally damaged, it's
cosmetic damage, and they're going to deny the whole claim. Now I heard about
this, just, what, a couple days ago, from an
adjuster for that company, and he was complaining about it because
he was writing up total losses for homeowners to get their
roofs replaced, and the company that he works for, was
denying the claim. Boom. Boom. Well, that's incredibly
maddening. Sure it's maddening for us as roofers, because
we rely on that work for our income, but for me it's actually more
maddening from the, for the homeowner, because the homeowner
oftentimes doesn't know that's going to happen to him.
So maybe he paid to upgrade his roof to an impact-resistant material or
something like that, and now it's gotten damaged, because you
know golf ball size, tennis ball size, baseball size hail is going to damage
any roof material that you put on there pretty much,
and so, maybe he paid some to upgrade his roof,
and now he's getting the unpleasant surprise of having a roof that's totaled,
and a roof that looks horrible, and he's gonna have to pay to replace
that himself .because the insurance company says,
nada. All right, so two if's, if you're an insurance agent watching this
video, and if you've stuck with me all the way
to this, this far, please, let me
make an appeal to you, as an insurance agent,
please. If the policy that you're writing for your customer,
has these exclusions, has this kind of stuff
in it, let the customer know. So that way, they don't get a complete
shock, that they're going to have to pay out of
pocket to replace their roof, when it's legitimately damaged.
So, I know this is kind of a hot topic, it's hot topic for me,
it's a hot topic for adjusters as well, so if you've got any questions about
this, please, give us a call at our phone number
right up here 719-433-6991 you can also visit our website, that's
right down here, HomesteadRoofingColorado.com we've got a
ton of information out there, lots of other videos that will educate
you on this whole process. If this video has been helpful for you,
we'd love it if you give us the big thumbs up, leave a comment in the
comment section down below. Let us know, hey what questions do you
have, that you'd like us to answer, what situations have you encountered with
insurance claims, that you'd like us to address. Also,
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And until our next walk in the park video, I'm Tracy Bookman,
owner of Homestead Roofing.