How to read a roof insurance settlement

The document your carrier sends after the adjuster visit is usually twenty pages of line items and three numbers that matter. Most people read the last number, find it smaller than the estimate they were given, and conclude something has gone wrong. Usually nothing has.

The three numbers

Replacement cost value. What it costs to rebuild the roof today. Materials, labour, tear off, disposal, permits.

Actual cash value. The replacement cost minus depreciation for the age and condition of the roof. A fifteen-year-old roof has used most of its life, and the carrier subtracts that.

Recoverable depreciation. The gap between the two. On a replacement cost policy it is released to you once the work is finished and invoiced. On an actual cash value policy it is not released at all, which is a much worse policy and considerably cheaper.

Why the first cheque is small

The first cheque is the actual cash value minus your deductible. That is by design: it stops a homeowner banking the full replacement cost and never doing the work. Finish the roof, submit the invoice, and the depreciation follows.

This catches people out because the estimate they were shown is the replacement cost. Both numbers are real. They arrive at different times.

Deductibles in this state

Oklahoma policies frequently carry a percentage deductible on wind and hail rather than a flat sum. Two percent of an insured value of $300,000 is $6,000, not the $1,000 people assume from their auto policy. Check the declarations page before you decide whether a claim is worth filing.

Line items worth looking for

Read the scope for what is missing, not just what is priced.

• Ice and water shield in the valleys and at the eaves
• Drip edge, which is code and is often omitted
• Ridge ventilation, not just the shingles over it
• Detach and reset for gutters, satellite dishes and solar
• Steep and high charges if your roof is above eight-twelve
• Permit fees

Supplements

Once the old roof is off, things appear that nobody could see: rotten decking, a second layer, flashing that was never installed. A supplement is a request to add those to the scope. Carriers pay them routinely when they arrive with photographs and refuse them routinely when they do not. That is the entire trick.

One thing that is never negotiable

Your deductible is your share. A contractor who offers to waive it, absorb it or pay it for you is proposing fraud on a claim form that has your signature on it, not theirs. It is also arithmetic: the money comes from somewhere, and the somewhere is a price that was inflated to begin with.