Oklahomans and their insurance companies continue to battle very heavy wind and hail damage over the last 5 years. As rates have increased, consumers, many of which have been very loyal to their insurance companies, have decided it’s time to “shop around”.
Consumers can save money by taking the time to ask more questions about the coverage being offered on their roof surface in light of the fact that the vast majority of claims filed in Oklahoma are for wind or hail damage to roof surfaces.
Simply put, there are two ways that a roof surface claim can be paid by your insurance company. One is known as “Replacement” and the other is known as “Actual Cash Value” (ACV). Under Replacement, it is possible to recover the full cost of replacing your roof, less whatever deductible that you have. Under ACV, the insurance company takes a deduction from your settlement in addition to your deductible. This deduction is called “depreciation”. The amount of depreciation taken is based upon how old your roof is compared to the average life of your roof. For example, if the average life of your roof is 20 years and your roof is now 10 years old, the deduction for depreciation is 10/20, or 1/2 (50%). Therefore, if the cost to replace the roof is $15,000, you will have a $7500 deduction (50% of $15,000) for depreciation in addition to the deduction you have for your deductible. So, at the end of the day, you end up receiving $6000 or so on your $15,000 claim and the family vacation is on hold. Suddenly that great home insurance deal you got two years ago isn’t looking so great. When shopping for Oklahoma home insurance, here are some of the questions you should ask the agent………
1. Are you proposing Replacement or ACV coverage on my roof surface?
2. Is the approval of this coverage subject to an inspection?
3. Does the company change the coverage from Replacement to ACV after my roof reaches a certain age?
4. Do wind and hail claims have a separate deductible than other claims?
Von Nix, CPCU
Von, and his wife Cheryl own Statewide Insurance Agency in Edmond, Oklahoma. Statewide is an independent insurance agency specializing in home, auto, mobile home and other personal insurance products. They can be contacted by going to their web site, www.okstatewide.com.