Houston Roof Replacement Insurance Claims

If you do have damage and decide to move forward with a claim, your Blue Ribbon Roofing representative will be there to answer any questions you may have as you file your claim. Generally, once a claim is filed with the insurance carrier, they will contact you with a date and time for their adjustor to inspect the damage. We will make ourselves available for that inspection in case you or the adjustor needs us. We will be there for you every step of the way to answer questions and re-explain anything that you may need clarification on.

The normal process begins when the insurance company provides an estimate. This estimate is typically broken down into four main components:

• RCV (Replacement Cost Value): This represents the total cost of the claim. It’s what the insurance company believes it will cost to fully cover the claim.

• ACV (Actual Cost Value): This reflects the current value of the items, taking depreciation into account. As time passes, items lose value and are no longer worth what they were when new.

• Depreciation: The amount the insurance company will withhold until the project is completed. You’ll need to show proof of construction before this amount can be released, ensuring that the items are insured at 100% of their worth.

• Deductible: The amount you are responsible for paying out-of-pocket, similar to a doctor’s office visit.

It’s important to have an RCV policy rather than an ACV policy because depreciation is not recoverable under an ACV policy. This means the depreciation amount is essentially an out-of-pocket expense.

Policy holders beware: While agents may offer lower rates, there is often a catch. These lower rates usually come at a much greater cost to you in the end.

Once the construction is complete:

• Your contractor will send proof of replacement, a completion letter, and an invoice to your insurance company.
• The invoice confirms the work was done at the allowed amount and that the initial check and deductible have been paid.
• Some insurance companies may require proof of cleared checks and transactions.

For a more in-depth breakdown of insurance claims, check out our insurance claims examples page.

Most policies are Replacement Cost Policies (RCV Policy), meaning the common answer would be your deductible.

• If you have an Actual Cash Policy (ACV Policy), any depreciation on your roof would be NON-RECOVERABLE.

• It’s important to verify this information before moving forward with a claim, as it could significantly increase your out-of-pocket costs, especially if your roof is old.

The only situation where it could cost you more than your deductible is if you choose to upgrade your roof. In this case, insurance will only cover the cost of replacing the roof with the same grade material that’s currently installed.

Homeowners should be aware of the new law that took effect September 1st 2019. This bill enforces the illegal act of waiving deductibles by fines and jail time. If a free roof sounds too good to be true, IT IS!

The deductible constitutes the homeowner’s financial responsibility in an insurance claim. Any discount offered by a contractor would result in a savings for the insurance company and not the homeowner. For instance:

• If the insurance company estimates a roof replacement at $15,000 and the ACV (Actual Cash Value) is $10,000 after depreciation, and your deductible is $3,000, the first check from your insurer would be $7,000 (ACV minus deductible).
• If a contractor offers to do the work for $14,500 instead of the $15,000 estimated by the insurer, the final invoice sent to the insurance company must reflect this amount to release the depreciation. However, if the insurance is invoiced for the full $15,000, but you only pay $14,500, it’s considered insurance fraud.

By falsely invoicing the insurance company that the entire deductible was paid or that their estimate was paid in full, you are now exposed to being found guilty of penalties ranging up to felonies with serious jail time. Regardless, I would be leery of doing business with any contractor willing to commit a crime in order to attain your business. If he or she is willing to do that, who knows what lengths they are willing to go to when it comes to the quality of your roof and being there down the road to warranty it.