When it comes to homeowner’s insurance, many homeowners wonder if they will need to pay a deductible when replacing their roof.
Here’s what you need to know:
How Does an Insurance Deductible Work for Colorado Roof Replacements?
An insurance deductible is the amount of money an insured individual must pay before their insurance company covers any remaining costs. This means that if you have a deductible of $1,000 and your claim is for $5,000, you will need to pay the first $1,000. Then, in most cases, the insurance company will cover the remaining $4,000.
Note that the specifics of what you owe and what your insurance will cover vary depending on your insurance company and your specific homeowner’s insurance policy.
Deductibles typically don’t count toward any extras you plan to add to your re-roof project, like upgraded shingles. In these cases, you’ll pay the difference between a standard shingle replacement and your upgraded shingles.
Do You Have To Pay Your Deductible for a Roof Replacement?
If you have homeowners insurance that covers roof damage and your roof needs to be replaced due to a covered peril, you will need to pay your deductible.
How much you’ll need to pay out of pocket depends on your specific insurance policy. If the cost of your new roof isn’t fully covered, you’ll need to pay more. In addition, if you want to upgrade your roof, you’ll need to pay the difference out of pocket.
Should You Let a Roofing Company Pay Your Deductible?
Some roofing companies may offer to pay your insurance deductible as an incentive to choose their services. However, you should never accept such an offer.
It’s essential to note that the Colorado Senate signed a bill that says it is illegal for roofing contractors to cover the cost of your deductible. Roofing contractors who make such an offer put you and themselves at risk of committing insurance fraud in the state of Colorado. It is illegal for a roofing contractor to pay, rebate, or waive your deductible.
Colorado isn’t the only place this is illegal, either. Never accept this type of incentive or discount. It’s one of the most common scams in the roofing industry, and you should stay away from these offers to stay on the right side of the law and not commit insurance fraud.
Not only that, but a roofing company offering to pay your deductible likely will have poor workmanship – and no recourse is available to you because you broke the law in getting the new roof.
While it may be tempting to save some money by allowing a roofing company to cover the cost of your deductible, it’s illegal, a red flag from the contractor, and certainly not worth committing insurance fraud.
Instead, work with a reputable roofing company that doesn’t pressure you into any questionable tactics.
Why Would a Roofing Company Offer To Pay Your Deductible?
The main reason a roofing company may offer to pay your deductible is to gain your business. By covering the cost of your deductible, they may be able to entice you into choosing their services over another roofing company. However, as mentioned before, you should never accept such an offer.
In the state of Colorado, it’s illegal for a roofing contractor to pay, rebate, or waive your deductible. Not only that, but the roofing contractor will likely have poor workmanship when doing the roofing project.
What Other Costs Are Incurred When Getting an Insurance Roof Replacement?
There are two common types of policies that determine how much money you’ll get from your insurance company and how much you’ll need to cover on your own when getting your home’s roof replaced. The policy will also outline the additional costs you will be responsible for paying during the roof replacement process.
Actual Cash Value Policy (ACV)
With an ACV policy, your insurance company will only pay for the depreciated value of your roof. This means that the insurance company will consider your roof’s age and condition. The insurance company only needs to cover the depreciated value of your roof at the time of the claim.
With an ACV policy, you shouldn’t expect your payout to be enough to cover the total cost of a roof replacement, and you’ll need to cover the rest of the expense out-of-pocket.
Due to an increase in claims in Colorado due to major snow and hail, many insurance companies switched to ACV, as the cost for RCV (Replacement Cost Value) premiums wasn’t offsetting the cost of the roofs that needed replacing.
Replacement Cost Value Policy (RCV)
With an RCV policy, your insurance company should cover the total cost of replacing your roof, regardless of age or condition. However, you will still be required to pay your deductible before receiving compensation from the insurance company.
This type of policy usually offers a higher payout than an ACV policy, but it also typically comes with a higher premium for your homeowner’s insurance.
The way it works is this: you’ll get one check for the ACV of the roof, and then, once the new roof is complete and proof is provided that it was completed per the claim, you’ll get a second check that covers the recoverable depreciation.
You shouldn’t have to pay much more than the deductible for this type of policy. However, you’ll still need to cover any added upgrades.
Need a New Roof? Contact Scott’s Roofing Colorado!
If your Colorado home needs a new roof and you’re unsure about the costs involved, contact Scott’s Roofing for a free estimate on our residential roofing services. Our experienced team can guide you through the insurance claim process and help you understand your policy’s coverage for a roof replacement.