Roof Coverage Explained

Something we want to keep you informed of is a change that several insurance providers are making, and it is something that we want you to be aware of in the months to come. Various insurance companies have begun to either switch or include actual cash value (ACV) policies in their roofing coverage terms. In the past, insurers would offer replacement cost policies when dealing with roofs and any accident that may befall them.

Basically the difference is this: a replacement cost policy would pay to fix or replace the roof without considering any depreciation, or wear and tear, that the roof may have already sustained previous to the hailstorm or falling tree or whatever incident may have occurred. An ACV policy will pay for the cost of the repairs or replacement minus any wear and tear that the roof already had.

Let’s put this into a scenario for you. Say your roof is eleven plus years old, and this spring a particularly bad storm rips through Franklin and drops quite a bit of hail on your house. A replacement cost policy would pay for the entire replacement of your roof, a hypothetical $10,000, without considering its age. An ACV policy would provide the coverage after deducting the value of the wear and tear of the roof, which we will say amounts to about $4,000. Your ACV policy would therefore provide you with the remaining $6,000 with which to replace or repair the roof.

These tongue-twister words and figures being tossed around can often be very confusing, especially for us, so we hope we have helped shed a little light on a hazy situation. Our number one goal is to be available to you, and we always want you to feel comfortable asking us questions or for more information. Stay tuned for more entertaining and informative blog posts!

By: Dominique Postma
FSI Intern