How to Read a Roofing Insurance Claim
Most homeowners make mistakes when filing roofing insurance claims simply because they don’t understand the claim form. Like insurance itself, filing a claim can be a drawn-out, complex process that creates more questions than answers. Unfortunately, if you do not understand the process or the form you are filling out, the insurer may deny your claim, or you may receive a lower payout.
Fortunately, there is a way to fill out your claim with greater ease. You can contact a roofing contractor to inspect the roof damage. The contractor can 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 cost of repair. In the meantime, here are some tips on how to read a roofing insurance claim.
Before we get into the claim details, it should be noted that most insurance companies use Xactimate software to create, fill out, and print claims 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.
The software gives insurance companies a rough idea of how much to pay out after filing the claim. Keep in mind that this is just one factor they consider. The adjuster will also account for any pre-existing conditions, maintenance, and repairs before the current damage, what your policy covers, the age of the roof, and how quickly you file the claim.
Most claim forms start with a claim summary. The insurance adjuster fills out the summary after inspecting the damage. They include information such as the nature of the damage, cause of the damage, and the cost of repair estimate. The summary may include the following items.
- Summary of damage on all sides of the house
- Additional structural damage around the house
- Additional content damage inside the house
The summary page may also include miscellaneous information, such as necessary code or parts of the roof damage 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, one of the most common complaints (or misunderstandings) is regarding the payout or the amount of the checks. First, you need to understand that you may never see a check in the mail. The insurance company may send the check to the roofing contractor. There is no standard practice, as insurance companies handle payouts differently.
If the insurance company sends the payout to you, you will receive a check with a loss statement. The check will cover the initial cost of labor and materials so that the contractor can start the project. Additional checks should follow as the job progresses. The contractor may contact the insurer directly to update them on the progress and request more funds. Again, contractors and insurers handle this differently.
If the insurance company uses Xactimate software, you may receive the claim or loss statement in the form of a spreadsheet. While this can be intimidating, it is actually the easiest way to read the summary. The spreadsheet will contain five columns.
|Col 1||Item description||Contains a description of each item the contractor will repair. Every roof component and each step within the project is listed individually.|
|Col 2||Item quantity||The contractor provides the quantity of each item. Quantity may refer to either the measurement or number of each item.|
|Col 3||Unit price||The unit price is based on the current market price of each item. Since it is based on the market, the price may shift from month to month. The contractor or the insurer will include the unit price on both materials and labor.|
|Col 4||Depreciation value||The value of your roof may have depreciated since you purchased the house. The insurer may calculate depreciation based on the age of the roof, the condition of the roof before the damage, and whether you maintained the roof regularly.|
|Col 5||Actual cash value||The actual cash value (ACV) of our roof is reflected in how much the insurance company pays out. The column shows how much the insurance company pays upfront on the first check. The ACV is broken down by item.|
Calculating the Total Payout
If you are like most homeowners, you simply want to know three things: 1) the extent of the damage, 2) the cost for professional roof repair 3) whether the insurance payout will cover the repairs. However, finding the bottom line in a claim form or loss statement can be impossible, mostly because of the way the forms are structured.
The Replacement Cost Value (RCV) is the total cost of repairs. The RCV typically includes overhead costs, taxes, deductibles, and depreciation. If you receive several summaries (spreadsheets), you add the total of each summary to get the total RCV. The total RCV is also the total amount that you will receive from the insurance company for repairs.