Roof Insurance Deductible 101

After suffering storm damage to your roof, going through the process of filing an insurance claim may seem intimidating. Unfortunately, this often means having to take on a hefty insurance deductible—but don’t worry! In this post, we’ll explain exactly what a deductible is and answer commonly asked questions surrounding it; plus, if you’re short on funds for one right now, there are still some options available to you.

What is an Insurance Deductible?

The deductible is how much the homeowner must pay out of pocket before the insurance company will start paying for repairs or replacements.  As the cost of homeowner’s insurance premiums increases, the insurance deductible amount will decrease. Conversely, if you’re looking to save on premiums, it may be worth considering a policy with a higher deductible – remember though that this will require more cash from your pocket when filing an insurance claim.

For instance, if you have a roofing deductible of $1500, then you must pay the full amount out-of-pocket before your insurance company compensates you for any additional expenses.

Can the Roofing Company Pay the Homeowners INSURANCE Deductible?

It is illegal for a roofing company to “pay the homeowner’s deductible” so don’t ask the roofer for this. The deductible is a small price to pay for a new roof that will typically cost 10 times or more than the deductible.

Can I Have it Waived by my Insurance Company?

No, as your deductible is a key part of your agreement with the insurance provider.

You might be wondering how others around you have had their deductibles waived, or why a contractor has informed you that they can do it for you. Unfortunately, if this did occur then fraud was committed each time – and possibly without the homeowner even being aware of it! However, ignorance is not an excuse; regardless of whether they were aware of the fraudulent activity or not, they may still face punishment should they get caught. Now let’s dive into how these companies typically perform such activities and explain why exactly it doesn’t make sense to partake in them.

After your insurance provider has approved the roof replacement, you will receive multiple checks. The initial payment is likely to cover only half or two-thirds of the total cost; henceforth, to obtain full compensation for depreciation, a contractor must provide proof of installation along with an invoice detailing the overall expense incurred. Subsequently, the insurer will remit the totality minus what was in the previously issued check and insurance deductible amount.

Standard Insurance Breakdown:

Replacement Cost Value of the Roof (RCV): $20,000
Depreciation of the Roof: $10,000
Homeowners Deductible: $1,500

Total Payout After Installation: $18,500

Example #1 of Deductible Fraud

Replacement Cost Value of the Roof (RCV): $20,000
Depreciation of the Roof: $10,000
Homeowners Deductible: $1,500
Roofer Invoices RCV Minus Deductible: $18,500

Total Payout After Installation: $17,000

Although the contractor may offer to send an invoice that avoids you from paying any deductible, this is not possible. Insurance companies have the right to pay less than what they initially offered if their bid comes in lower. All too frequently, roofers will come back to you claiming the insurance isn’t covering enough and obligate you to honor the contract; thus, forcing you to pay the insurance deductible (and commit fraud) regardless. As you can see the insurance company is the only one that won in this situation.

Example #2 of Deductible Fraud

The second option, where a roofer sends an invoice with the deductible but doesn’t charge you that total when paid, commits fraud. This is because contractors are aware they are deceiving insurance companies about how much they charge customers. Homeowners can face penalties, even unknowingly, if they are found to be an accessory in fraud. To prevent potential charges and consequences of this sort, never work with any contractors that offer to waive a deductible as this means you’re being set up for deception.

Additionally, be warned that if your roofer is willing to commit fraud and take a loss on the replacement itself, they are most likely making up for it in other ways. This could include cutting corners, reusing materials, or shoddy workmanship.

Roofing Insurance Deductible

What Are My Options to Pay for the Deductible if I Can’t?

Your main options are to finance the insurance deductible through your roofing contractor. Most high-quality roof contractors offer roofing finance for roof repairs or complete replacement.  You can also tap into home equity, get a loan from the bank, or use a personal line of credit.

Have Questions? Reach Out Today!

If you have any questions about deductible fraud or roof insurance deductible payment options, feel free to book a consultation today. We’re always here to help answer your questions or provide resources and advice. Don’t hesitate; get the answers you need now! We look forward to helping you with all your roofing needs.