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Have you just gotten the good news that your insurance claim was approved?
But now you’re wondering, how exactly will insurance pay for my new roof?
It’s no secret that the insurance claim process can be stressful, and this stress is usually alleviated when you see a glorious approval!
Homeowners we work with are always curious to know how the payout process works when they’ve been approved for a roof replacement. And really, the way insurance pays for your roof can go one of two ways depending on whether you have an ACV or RCV insurance policy. If you’re not sure what type of policy you have, you can refer to the declarations page your insurance company gave you when you originally signed up for your policy.
So, how does the insurance payout process work when your claim was approved? Let’s discuss!
How Insurance Pays Your Approved Roof Claim Depending on Your Policy
When you first signed up for homeowners insurance, you chose either an ACV or an RCV insurance policy. Each policy will impact the way insurance will pay for your roofing project. In both scenarios you will receive a check in the mail from your insurance carrier. If you’ve looked at your declarations page and see that you have an ACV policy, how will insurance pay out your roof work?
How ACV Roof Insurance Pays You After Approval
When your claim gets approved, your insurance company is going to send you your ACV check. ACV stands for actual cash value, meaning that your insurance company will not pay according to the value of today's dollars, but rather according to your roof’s true depreciated worth in the current market. Because of this, the value of your loss is adjusted downwards. This check will include the depreciated value of your losses as outlined in the estimate provided by your insurance carrier. Unlike RCV, this single check should contain the full approved amount they agreed to pay for your roof replacement.
How RCV Roof Insurance Pays You in Two Stages
Suppose you have an RCV or a replacement cost value policy. In that case, the costs associated with your roof replacement are calculated based on the present-day cost of labor, materials, and services. In this scenario, your roofing contractor will submit the total billed amount to your insurance company and they will send you a check. Typically in about 2 weeks after the project is completed, your insurance company will send you another check for anything additional that needs to be accounted for beyond the original approved scope of work.
In this scenario, your deductible is usually your only out-of-pocket expense. Keep in mind that your insurance company will release the second check based on the final invoice from your roofer, not the total approved amount. What does this mean? If you don't use it, you lose it! If your roofer invoices for less than the amount approved by your insurance company, the insurance company will pay out less money. This ensures that you pay your deductible in full and don't pocket any extra money.
Insurance companies are in the business of fixing damages, not giving out money from claims. They have become proficient at ensuring this doesn’t happen.
But there is good news! With an RCV policy, cost is no longer an issue for you, and you can choose the roofer you trust the most, even if they are a little more expensive.
What to Do After Your Roof Claim is Approved
Getting an approval on your insurance claim is always a relief, but often working with your insurance company can feel like a major task. Not only is there plenty of technical jargon involved in dealing with insurance carriers, but you also want to make sure you understand the way they plan to pay for your roof damages.
If you’ve been approved for an insurance claim and you haven’t involved your roofing contractor in the process yet, I highly recommend doing so. It’s important to note that it is mutually beneficial to share this information with the roofing company you plan to work with. The reason is that your roofer likely works with insurance carriers daily, meaning they’re well versed in the lingo used and the way they operate. Not only that, but they’re likely to ensure that you're approved for code items and any additional work necessary to provide you with a safe and long lasting roof.
While I like having my project management team involved in the insurance process from start to finish, we are always eager to jump in and help you no matter what phase of the process you’re in. So, if you’re looking for a roofing company that can take the hassle out of your roof improvement project, we’re here to help!
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