How to Read a Roofing Insurance Claim
Most homeowners make mistakes when filing roofing insurance claims for the simple reason that they don’t understand the claim form. Filing an insurance claim can be a complex, drawn-out process that produces more questions than answers. Unfortunately, if you do not understand the process or the form you are filling out, you may end up receiving a lower payout or the insurer might even deny your claim.
Fortunately, there is an easy way to fill out your claim, by contacting a roofing contractor to inspect the roof damage. The roofing company will assess the damage and help you fill out your claim. They can also meet with the roof insurance adjuster to confirm the cause of the damage and the repair costs. In the meantime, here are some tips on how to read a roofing insurance claim.
Insurance Companies Use Xactimate Software
Before we get into the claim details, it should be noted that most insurance companies use Xactimate software to create, fill out and print claim forms. Xactimate provides pricing information based on national rates for building materials and labor. Residential roofing contractors also use Xactimate when drawing up roofing job estimates.
This software gives insurance companies a rough idea of how much they will have to pay out to the person filing the claim. Keep in mind that this is just one factor they consider. The adjuster will also take into account any pre-existing conditions, maintenance and repairs done before the current damage, what kind of repairs your policy covers, the age of the roof and how quickly you filed the claim.
Most claim forms start with a claim summary, which the insurance adjuster will fill out after inspecting the damage. They will include information such as the nature and cause of the damage and a cost estimate of the repair claim. The summary may include the following items:
|Line Item 1||Materials and Labor||The total of all the line items in your claim before tax.|
|Line Item 2||Materials Sales Tax||Add in the sales tax in your state.|
|Line Item 3||Recoverable Depreciation||The value or what it costs to restore your roof back to its condition before the damage.|
|Line Item 4||Calculated Depreciation||The insurance company divides the cost of your roof, minus its salvage value, over the remainder of its projected lifespan.|
|Line Item 5||Actual Cash Value||The replacement cost value of your roof minus the depreciation.|
|Line Item 6||Deductible||How much you must pay for repairs before the insurance covers the remainder.|
|Line Item 7||Net claim||The amount on the first check that the insurance company sends out to start the project.|
|Line Item 8 & 9||Remaining Claims||Further losses or claims that you are entitled to collect after the roof repair has been completed.|
The summary page may also include miscellaneous information such as the necessary code or details of the roof damage that the insurer will not cover. When reading the summary, make sure you understand what your policy will cover and what will be billed to you.
Naturally, the most common complaints (or misunderstandings) normally relate to the payout or the amount of the checks. It is important to understand that you may never see a check in the mail, since the insurance company may send the check directly to the roofing contractor. There is no standard practice, as each insurance company handles payouts differently.
If the insurance company sends you the payout directly, you will receive a check with a loss statement. This check will cover the initial costs of labor and materials, allowing the contractor to be able to start the project. Additional checks should follow as the job progresses. The contractor may contact the insurer directly to update themself on the progress and request more funds. Again, each contractor and insurer will handle this process slightly differently.
If the insurance company uses Xactimate software, you may receive the claim or loss statement as a spreadsheet. While this can be intimidating, it is the easiest way to read the summary. The spreadsheet will contain five columns, as shown below.
|Col. 1||Item Description||A description of each item that the contractor will repair. Every roof component and each step within the project will be listed individually.|
|Col. 2||Item Quantity||The contractor will specify the quantity for each item. “Quantity” may refer to either the measurements of the item or the number of pieces.|
|Col. 3||Unit Price||The unit price is based on the current market price of each item. Because of this, the price may change from month to month. The contractor or the insurer will include the unit price for both materials and labor.|
|Col. 4||Depreciation Value||The value of your roof may have depreciated since you purchased your house. The insurer will calculate depreciation based on the roof’s age, its condition before the damage and whether you maintained the roof regularly.|
|Col. 5||Actual Cash Value||The actual cash value (ACV) of your roof will be reflected in the quantity of the insurance payout. This column shows how much the insurance company will pay up front with the first check. The ACV is broken down by item.|
Calculating the Total Payout
If you are like most homeowners, you really only want to know three things: the extent of the damage, the predicted cost of professional roof repair and whether the insurance payout will cover the repairs. However, because of the way the forms are structured, finding the bottom line in a claim form or loss statement can seem almost impossible.
The roof replacement cost value (RCV) gives the total cost of repairs. The RCV typically includes overhead costs, taxes, deductibles and depreciation. If you receive several summaries (spreadsheets), in order to calculate the total RCV you will need to add the total given in each summary. The total RCV is also the total amount that you will receive from the insurance company for repairs.
Contact Us About Your Roof Insurance Claim
Roof insurance claims can be difficult to understand. Fortunately, we can help. Quality Roofing Solutions can meet with you to discuss your roof damage and the details of your claim. We offer roof repairs from insurance claims for homeowners in Florida.