Homeowners insurance: Changes to roof coverage

[TripleDigitRide]

I was wondering if other insurance companies have made similar changes. 

 

Farm Bureau sent me a letter to inform me that they have made changes to their coverage for replacing roofs has changed. Much like automobile insurance takes into account the actual cash value (deprecation), it appears Farm Bureau is doing the same thing where roof replacement is concerned. It appears they will still cover 100% of the labor costs, but are prorating the roofing materials. They will now be paying anywhere from 25% to 100%, depending on the age and type (quality) of the existing roofing materials.

 

I am somewhat new to this whole homeowner thing, but I suspect builders don't worry about using top quality shingles. In return, this means higher out out expenses for the homeowner, in the event you need to file a claim for a damaged roof.

 

Anyone else receiving similar letters from other insurance companies?

[EMB145]

I'm with the same company and received the same letter. 

[bersaguy]

I would begin checking with other companies and see if their coverages are the same or similar. They may have all gone to that or similar. Insurance companies kinda operate in a click and kind of watch what others do and then will follow shortly after.....jmho

[Garufa]

I have heard other companies are starting to do this as well, especially after the storms a couple of years ago.  They shelled out untold millions for new roofs.  Have not heard from my provider yet, so I don't know what their policy is.

 

Personally, I think it's a crock.  With auto insurance you are paid the replacement cost of your vehicle, so if they have to replace a 5 year old car it is assumed you can find the same make, model and year as that value.

 

You can't go out and find a used roof to throw up on your house.  Say you're 12 years into some 25 year shingles and disaster strikes.  Now you're going to get only 50% of the replacement cost of new materials, and you HAVE to get a new roof, an expediture you had not planned on for another 12 or 13 years.  It's a rip, IHMO.

Edited September 22, 2013 by Garufa

[Sam1]

If you're interested I can get my wife to message you when she gets back in town, she started working for Liberty Mutual and would at least be able to tell you the specifics for them.

 

But State Farm has not changed anything as of yet; just the deductible and costs, don't think they depreciate.

[TripleDigitRide]

According to what I've been reading, due to the sever tornadoes, hail storms and floods in recent years, Farm Bureau has been paying out more money than they've brought in since 2008. I'm not sure how that compares to other insurance companies.

[Smith55]

Allstate prorates the shingles based on age and origional quality

[TripleDigitRide]

I guess I need to get a roofer out here to tell me what quality of shingles I have and how much it would cost to replace the roof. This sounds like something that I'll need to plan ahead. It seems the deductible plus out of pocket expenses for shingles would be fairly substantial. 

[Hozzie]

I am with Farm Bureau and got the same letter.  While I preferred the old method (who wouldn't?), I completely understand this.  Why should an insurance company replace a 20 year old roof with a brand new one and bear all of the cost.   It seems pretty fair to me.  They replace what value is left and we have to pick up the difference.  The same goes with your car, they don't replace it with a brand new model of the same car, they pay you up to the current value of your car.  If you're driving a 1986 Camaro and it has severe hail damage, they aren't giving you a new one, they give you the $1000 your old car is worth.  Same thing on this.

Edited September 22, 2013 by Hozzie

[Guest nra37922]

Hope you all have earthquake insurance on your homes.

[Wiljo05]

The problem lies in all those storm chasers that promised and followed thru with getting people new roofs when their roofs were old and in need of replacement just by calling it storm damage.

I was with Farm B. and cancelled them and went with liberty mutual because for now they don't prorate roofs

[JG55]

I have auto owners no changes . Also when I shopped prices they were less expensive for same coverage compared to farm bureau.

[midtennchip]

Yes, State Farm is doing it, as well.

[Monkeyman2500]

Thank goodness we just got ours replaced under full coverage. I heard that this was coming from our roofer. We had bad damage on only 8 year old roof and gutters.

[M6HTZ]

I switched to Erie insurance and have never looked back.  A+ rating, lower rates and first class service.  You don't see them advertise like the others, I guess they save the money to pay claims and keep their rates in check. 

[peejman]

I have State Farm and have a line item that says something to the effect of "new item replacement" which means that while they do depreciate the cost of the roof over time, my policy says they'll cover a full replacement regardless of age.  It's an extra you have pay more for, but it's minimal and I think it's worth it. 

 

I had my 15 yr old roof replaced last year due to storm damage.  They assume the life of the roof is 30 yrs so the depreciated value was about half the cost of a new one.  So I basically got 2 checks.  The 1st check was for that depreciated value.  The 2nd check covered the rest of the replacement but they sent it only after I sent them a signed contract with the roofer.  I only got the balance of the full cost after the work was done.  I found that a bit annoying, but I also understand why they do that. 

[tnguy]

I was kinda surprised. We were getting ready to pay out of pocket for a new roof. The old one was worn out and, to be sure, was not put on properly (I'd replaced parts of it myself and there were multiple things done wrong by the previous installer). Called in the roofer to get a quote, ready for the big hit and he managed to put it all on insurance. We got architectural shingles and didn't have to pay a penny.

 

To be sure, there was a bit of damage from a storm but mostly it was just plain worn out. Can't really blame the insurance companies for wanting to avoid paying all of that. If I wrecked my 2000 car, I wouldn't get to drive a 2013 model off the lot.

Edited September 23, 2013 by tnguy

[Erik88]

This policy makes sense in a way but at the same time I would be upset if they only covered part of the replacement cost. We just bought a 10 year old house and the building inspector said there is no reason why we can't get another 10 years out of the roof, it's still in great shape.

I would like to know what they assume is a normal lifespan for a roof.

[Dennis1209]

Yep, got the very same letter. I believe they are falling inline with other homeowner insurers. Tennessee Farm Bureau is a reputable company in my opinion.  

 

In addition, two or three years ago they dropped my earthquake rider policy and no longer insure for earthquakes. Living almost smack dab on top of the New Madrid fault line, I feel it's prudent to have coverage since the odd's of a big shaker are increasing.

 

Funny thing is... To my knowledge, no American insurance company insures for earthquakes any longer. I had to insure with a foreign insurance company reinsured by Lloyd's of London?

[bersaguy]

The problem lies in all those storm chasers that promised and followed thru with getting people new roofs when their roofs were old and in need of replacement just by calling it storm damage.

I was with Farm B. and cancelled them and went with liberty mutual because for now they don't prorate roofs

 

 

I am thinking the same way as you on this issue roofer are a lot like ambulance chasers and many times they will quote a price just under what insurance companies would sent out an adjuster for and just approve the replacement. That drives up everyones insurance rates........jmho

[TripleDigitRide]

This policy makes sense in a way but at the same time I would be upset if they only covered part of the replacement cost. We just bought a 10 year old house and the building inspector said there is no reason why we can't get another 10 years out of the roof, it's still in great shape.

I would like to know what they assume is a normal lifespan for a roof.

I believe they base it on the quality (10 year, 20 year, etc.) of the shingle. They claim the professionals can tell ny simply looking at the shingles.

[TripleDigitRide]

[quote name="Dennis1209" post="1037683" timestamp="1379948085"] Yep, got the very same letter. I believe they are falling inline with other homeowner insurers. Tennessee Farm Bureau is a reputable company in my opinion. In addition, two or three years ago they dropped my earthquake rider policy and no longer insure for earthquakes. Living almost smack dab on top of the New Madrid fault line, I feel it's prudent to have coverage since the odd's of a big shaker are increasing. Funny thing is... To my knowledge, no American insurance company insures for earthquakes any longer. I had to insure with a foreign insurance company reinsured by Lloyd's of London?[/quote] Lloyds of London is a very common insurer within the trucking industry. Edited September 23, 2013 by TripleDigitRide

[jphillips63]

If you pay for full replacement value I'm sure then its 100% covered or they be under breach of contract.

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[ed228]

Liberty Mutual sent me the same letter with our renewal paperwork a few weeks ago.