Roof Loss Settlement – understand your coverage!

Insurance companies have been consistently increasing homeowner’s rates in the state of Wisconsin over the last year – and will continue to do so for the immediate future.  If you haven’t seen a rate increase in your home policy recently, chances are that you’ll realize one in the coming months.

One of the main reasons that insurers are increasing their homeowner’s insurances rates is due to the weather-related losses that they’ve suffered in recent years. Wisconsin has experienced heavy storm activity including wind, hail, rain, and other harsh elements.  These elements have combined to cause an excruciating amount of claims activity for insurance companies.  Luckily, the large majority of companies have responded positively and recognized the fact that this is the reason they are in business – to restore individuals and families to their condition prior to the loss.

In addition to rate increases, these losses have also affected how insurance companies are settling losses on roofs – particularly wind and hail claims.  A homeowner’s policy has two specific items that you need to be aware of:

  1. A separate wind or hail deductible
  2. An actual cash value loss settlement option on your roof

    How will your homeowners insurance policy cover damage to your roof?

These stipulations and amendments have become very common and are largely determined by:  the age of the roof, the material of the roof, the condition of the roof, the deductible on the policy, and a policy owner’s loss history.   For example, if you have a low deductible on your policy, the insurance company may mandate that you carry a higher deductible for any losses due to wind or hail since they have been both frequent and severe in our area.  Alternatively, if you have an older roof (15-20 years of age or older) or a roof that is in poor condition, the company may have the ability to mandate that the roof be settled on an actual cash value basis until the roof is either repaired or replaced.  Many insured’s choose this coverage because it may lower their premiums, but it is imperative that they understand how it affects them at the time of loss.  If you have a total loss on your roof and have the actual cash value endorsement on your policy, the insurance company will not replace your entire roof with a new one.  They will pay you the actual cash value instead, which is determined by:  taking the cost to replace your roof and deducting depreciation from that cost.  Depreciation is most commonly calculated by establishing a useful life of the roof and determining what percentage of that life remains.   Subsequently, the coverage may be cheaper but coverage is also less!

It is important to understand the difference between replacement cost and actual cash value loss settlements and how they affect the settlement at the time of loss.  Feel free to contact us for further explanation or for other measures you can take to either have a lower wind/hail deductible or get replacement cost loss settlement on your roof!  As always, read your policy forms for exact coverage.


Water and Sewer Back up Coverage 101

As fall approaches northeast Wisconsin, everyone needs to be aware of the risks and dangers that present themselves during our most colorful season.  Since September is a notoriously wet month, one of the most frequent insurance claims that we experience are the back of up sewer or drains.  These events may not happen often; however, almost every homeowner has experienced this mini disaster during their ownership experience.

Frequently, heavy rains may cause either drains to back up or cause a power outage – which may cause the sump pump to stop working.  That’s right – they stop working right when we rely on them the most!

Do you want to have coverage for this situation?! Be sure to check your homeowners insurance polciy for water and sewer back up coverage!

Did you know a standard homeowner’s policy specifically excludes coverage for this event?!  That leaves you responsible for any cleanup costs in addition to any damage caused by the water.  Damage is usually quite costly and many times, water or sewage usually destroys most things it comes in contact with. If you use your basement for storage or have a partially finished basement, it is imperative that you have this coverage.

Coverage limits can be purchased incrementally and usually starts at $2500 – which may not even be enough to cover the cost of removing the water or sewage from your home (but is better than not having any coverage!).  A separate deductible generally applies as well.  The additional cost varies depending on your risk factors; however, it is generally quite reasonable and is well worth the peace of mind!

As always, talk to your agent about your risk factors to determine the amount of coverage that is appropriate for you.  Also, feel free to contact us with any questions you may have.  Always read policy forms for exact coverage.