Roof depreciation on insurance and replacement cost help

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Roof depreciation on insurance and replacement cost help

Post by dopamineagonist » Thu May 18, 2017 6:12 pm

We had a storm that blew through my neighborhood, so I had a roofer came to look at it and he tells me that I should file a claim with the insurance. Its a 15 year old roof that looks like it needed replacing a couple of years ago. anyway long story short, the adjuster came and approved the claim and a week later i get a check for 1500 dollars and a letter of explanation. the letter state Replacement cost $10,000. less rec. depreciation 6000, actual cash vaule is 4000 and minus my deductible 2500. So I called the roofer and told him no way I can afford to fix it right now due to the small insurance pay out. He told me that base on my letter he is able to replace my roof, and all I will pay is my 2500 deductible and he can recover the 6000 depreciation from the insurance. He said I will not be on the hook for anything more than my deductible. Is this right? Can someone shed some light into this? Im hesitant on approving the work order since Im worry what happen if he can't get the other 6000 from the insurance.

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Re: Roof depreciation on insurance and replacement cost help

Post by StevieG72 » Thu May 18, 2017 9:26 pm

The adjuster should have explained the recoverable depreciation.

Basically they have "paid" $4000 on the claim minus your $2500 deductable you got a check for $1500.

Now if you replace the roof you can recover everything paid over $4000 up to $10,000 for your new roof. So basically they will pay $6,000 more if your new roof costs $10,000.

The reason the insurance company structures payments like this is so that you will not pocket the entire payment without making repairs.
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Re: Roof depreciation on insurance and replacement cost help

Post by August » Thu May 18, 2017 9:51 pm

Yep, what StevieG72 said.

I usually explain it as two payments. One payment upfront to get the roofer started and a second check once it's complete. Only out of pocket cost is your deductible unless you upgrade the roof.

The exception to this is if you have what is called an ACV roof policy, but since the letter specifically stated rec depreciation (recoverable depreciation) that does not sound like the case here.

Enjoy your new roof.

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