What the Hail Happened?

After the last couple of fire seasons, insurance companies were forced to extend certain coverage to their policies. Since they were re-writing the policy anyway, they made a point to make some changes that would help their bottom line as well. This is where the 1-2% deductibles, non-matching policy, and ACV (Actual Cash Value) on roofs came in. When shopping around, these are things you want to ask about. Some companies went straight to ACV, meaning you only get the depreciated amount of your roof (like car insurance), and you don't get the full replacement cost on the back end. Not every company has done this though. Some companies created a roof payment schedule. This is essentially a scheduled amount that your roof is worth at X years. This is what my company has chosen to do, just to not have to go to straight ACV. The roof payment schedule is slightly better than straight ACV.

Of all the things mentioned, to me, the non-matching policy is the one to least worry about. The 1-2% deductible, you may be able to get a normal deductible with a higher premium. As far as the payment schedule, with my company I believe you can purchase an endorsement that will allow you to receive full replacement cost as long as your roof is 10 years-old or newer. After 10 years the schedule kicks in no matter what. Off the top of my head, I believe my company's payment schedule runs down to 20% for composition roofs 20 years or older. It never goes to zero value though.

*If you know which company I work for, shut up about it. I try to provide information when/where I can, but that will end immediately if names start getting thrown around. No one has ever said anything to my knowledge, but you might have noticed that I've got quite a few posts hanging around so it's not like they are difficult to find.* :)

If anyone remembers the hail storm that roared through Green Valley Ranch very early in the season, while the hail punched holes straight through vinyl siding and vinyl fences, and would have produced pictures like above, many of those homes had tile roofs that didn't even notice there was hail.

Yup, major changes happened with how most insurance companies handle roofs. As you've noticed, home rates in CO are kind of expensive compared to 5 years ago. That's what happens when you have multiple catastrophic hail storms every year. Then add in the roofs that are just old and worn out yet insurance was still having to pay for those because of "hail" damage. Sure, there's damage but the bigger factor was the roof was 30 years old and worn out. Think of how insurance handles tires on your carif it's totaled. They buy out the rest of the life left since tires wear out and aren't designed to last forever. Roofs are the same no matter what year warranty you get. Those warranties usually exclude hail damage. So insurance had to modify things or else rates would be $3,000 a year for $200k in coverage.

Now, each company did it or will do it differently. Some just slipped a 1-2% wind/hail deductible and listed the change in your renewal. These policies may not have seen as drastic of rate jumps on those renewals though. Now you're finding out why. They shifted another few thousand dollars to the insured. IMO, these are terrible plans because the high out of pocket pertains to the entire claim and your chances of a hail claim are almost 100% anymore over a 5 year span.

Other companies just do depreciated value once your roof hits X amount of years (tile roofs get more years than comp). So while it's new(er), they'll pay the full cost. But after its Been worn down for a while, it moves to reduced payment. This makes more sense to me because it's only reducing benefit for the one worn down item and let's you retain a low $1,000 deductible for hail storms.

I also think this is going to drive down the cost of roofs. As more people can't use the hail reason on older roofs to get it replaced, roofers will have to bring down the cost for people paying out of pocket.

We dealt with this a lot over the past year or so. We, like all companies, saw some spikes in one rates which caused people to shop. We explained to all of them the changes in the industry and what questions to ask. Our older policies were grandfathered in so they hold tremendous value due to full roof replacement, no matter the age of roof. We made sure they understood the monetary value of that because saving $200 a year sounds great until you have $2500 out of pocket at claim time. Some stayed, some people still left. But at least we knew they had the information to make the best choice.

To put Colorado into perspective, we've had probably a billion dollars in claims over the past 1.5 years. This storm was at 220 mil, the storms in April/may totaled over 100 mil, Black Forest fire was 400 mil and that doesn't count all the other hail storms and other types of non-catastrophe claims. Something had to change or, like I said, rates would be $3,000 a year.

I know none of that takes away the frustration towards the insurance industry. You use it and rates go up. You don't use it and rates go up. Unfortunately, theres not much that can be done with that. Group insurance is the only way to make insurance viable.

Also, take 30 min to read your policy each year. Ours fully explain the coverages and even lays out coverages not purchased. That stuff is on the first 3 pages so it's not even "buried" in the policy.

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Originally Posted by Irving

They told you at renewal probably. There will be an endorsement to your policy. Now you know one more thing to ask about when shopping around. Do you know if just the wind and hail deductible is 1% or the general policy deductible? I had a lady with a 2% deductible the other day.

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All I've been able to find is the renewal policy for this year (which begins November 1) so far, which states 1%, and then an even higher number than they ad quoted me over the phone when I was speaking to the Claims Adjuster. Where do they get that number from, anyhow? I'm going to continue to dig and see what else I can find in my older paperwork.

How is it legal for them to sneak in something other than what I agreed to?

...and by the way, I thank everyone that's sharing information about how these insurance policies work. I now it's my own damn fault for not paying close enough attention to my policy write-up. I got complacent and now it's costing us bucketloads of money.

What about a metal roof? Does anyone know if they will withstand these brutal storms? What are the drawbacks? Do they dent?

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Originally Posted by TheGrey

How is it legal for them to sneak in something other than what I agreed to?

What about a metal roof? Does anyone know if they will withstand these brutal storms? What are the drawbacks? Do they dent?

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For the first part, you can cancel your policy at any time, and your payment of the premium is your agreement to the contract. They can't cancel for any reason, but you can.

Metal roofing will dent. Some of the soft metal on your roof will dent long before your shingles will even notice there is hail, but metal roofing is generally tougher than the flashing and soft metal vent caps. I would say tile and concrete roofing are easily the most hail and fire resistant. They are likely significantly more expensive though.

Don't stress too much about finding some ultimate roof. You can go out and get a 50 year roof (they call them "Lifetime" roofs currently), and a bad enough hail storm can still destroy it. Try and get a decent product, try harder to get a decent policy, and then don't sweat it too much. The concept of insurance is built around nature damaging our property in the first place.

Concrete tiles can look like clay. I imagine they weigh a lot though. http://www.explodedhome.com/concrete-tile-roofing/

If you do metal, ask how they handle claims on metal roofs. Some companies won't pay if it's cosmetic only damage on metal roofs. Just because it dents doesn't mean the roof is bad. Its another one of those changes going on in the industry.

Tile roof is your best bet to avoid hail claims on your roof. But you have to have an engineer check it out to make sure your structure can support the weight. Insurance won't pay for the additional fees for that because you're upgrading. They only owe for similar kind/quality.

Some tidbits for anybody trying to decide if your roof will hold tile. These are just ballpark statements and are not intended to replace an actual evaluation by a professional engineer. These are thumbnail statements I give people to have a starting point to decide how to proceed when considering tile roofs.

Is the roof of your house built with trusses meaning a complete factory designed and built system? Trusses are most often able to hold the additional weight of most common types of tile roofs. The additional weight of tile is generally minimal compared to the live loads (wind and snow) that are considered when designing a truss system. Most track homes since the early 70's are built using trusses, most houses built until the 60's did not have truss roofs. Trusses started to show up in larger numbers throughout the 60's. Custom and semi-custom homes typically have roofs built with a mix of trusses and site built dimension lumber. Different tile products have different weights and specs will vary. Concrete tile and fiberglass tile have significant weight differences. Types of roof sheathing materials also varied greatly throughout the years and have an effect on the roofs ability to support tile.

Having said this it is worth exactly what you paid for it, but it is a place to start and some food for thought.

Good points, all. I've got a contractor coming to discuss the damage this upcoming week, so I'll ask her about tile roofs and hi-impact shingles, etc.

Just remember that her job is to sell you a roof. You start asking about a high dollar roof, and she'll start telling you about one.

We were hit really hard in this past storm. Worst customer service I've experienced with Allstate in 20 years. Worst customer service by Excel Roofing I've experienced with them. Some companies won't return calls because they have all the business they need right now and want to push you down the road until spring. I am very angry with the whole situation right now.

Do you know if it was a catastrophe adjuster that responded to your claim by any chance?