Problems with RPS (Roof Payment Schedule) Insurance

If you’re a homeowner – you know insurance on your home is crucial. Especially for homeowners in Myrtle Beach, where we endure various types of weather year round! But understanding the complexities of insurance can be stressful and overwhelming.

Many homeowners we speak to on a regular basis find themselves surprised when it’s time to file an insurance claim. They’re surprised to learn that their insurance policy is riddled with confusing language but more devastatingly, a policy that might not be in their best interest. While some homeowners have an awareness of the ACV (actual cash value) and the RCV (replacement cost value) policies, we’ve found that some homeowners have an RPS (Roof Payment Schedule) policy. And they’re often displeased to realize this about their homeowners insurance when it’s time to make a claim on their roof. 

Here, we’ll explain what RPS insurance is and why it can be a problem for homeowners in Myrtle Beach. 

What is RPS (Roof Payment Schedule) Insurance?

Roof Payment Schedule (RPS) insurance provides coverage for roof repairs, but with restricted payouts based on a depreciation schedule. Unlike more common policies such as ACV or RCV, RPS insurance reimburses homeowners according to the age and condition of the roof, often leaving them with significant out-of-pocket expenses when damage occurs.

For instance, while ACV also calculates depreciated value, RPS insurance tends to offer even less compensation, as it ties payouts directly to the roof’s age. This can result in substantially lower reimbursements, particularly for older roofs.

It’s important to note the differences between ACV and RPS insurance policies. Though we always recommend RCV policies, despite their slightly higher premium cost, we know this information will help you make a decision that best suits your needs and budget.

ACV vs. RPS Insurance Policies: 3 Ways They Differ from One Another

1. Coverage for Damage: ACV policies typically cover damages caused by specific perils such as hurricanes or windstorms, while RPS policies may cover a broader range of damage, including general wear and tear.
2. Payment Terms: RPS insurance uses a roof payment schedule, which lowers the payout amount as the roof ages. For instance, if your roof is over 15 years old, you might receive only a fraction of the cost for repairs. ACV, though also based on depreciation, often provides slightly higher payouts compared to RPS.
3. Cost of the Policy: RPS insurance is usually marketed as a low-premium option. Homeowners may pay less in monthly premiums but face higher out-of-pocket costs when a claim is filed. ACV policies tend to have higher premiums due to their broader coverage of specific types of damage, offering more protection in certain cases.

So, from all of this information, what are the main problems we see homeowners struggle with as a result of having an RPS insurance policy?

Top 3 Problems with RPS (Roof Payment Schedule) Insurance Policies

Often the lower premium rate is what attracts homeowners to this policy. But with a lower premium comes some significant drawbacks that can have a negative impact on you financially if you have to make an insurance claim. 

The main problems with RPS insurance include:

1. Restricted Payouts: The payout decreases as the roof ages, which means that homeowners with older roofs may receive very little reimbursement.
2. High Out-of-Pocket Costs: RPS policies often leave homeowners covering a large portion of repair or replacement costs out of pocket, especially when dealing with older roofs.
3. Lack of Transparency: Many homeowners may not fully understand the limitations of RPS insurance until they attempt to file a claim, at which point they might be surprised by how little coverage they actually have.

Unfortunately these issues cause homeowners quite a bit of stress – in a situation that is already quite stressful. While only about 5% of homeowners opt for RPS insurance due to its lower premiums, this affordability can quickly turn into a financial burden when it’s time to file a claim. Homeowners should carefully weigh the pros and cons before committing to RPS insurance to avoid costly surprises. 

In every scenario where your roof is damaged, it’s key to include a trusted roofer in the insurance claim process – regardless of what type of insurance you have. This can help eliminate some of the stress and confusion that comes with insurance jargon.

Partnering with a Roofing Expert Through the RPS Insurance Claim Process

While we can’t turn back time, we can provide assistance and information about your RPS insurance policy. Regardless of the type of insurance you have, insurance claims are overwhelming. But they don’t have to be with help from a trusted roofer.

At Linta Roofing, we know that a homeowner’s best defense will always be knowledge. Which is why we tend to strongly recommend ensuring you have an RCV insurance policy. This policy will cover the cost of your roof replacement in today’s dollars. But, if you know that is not your current situation – we want to provide you with some guidance through the insurance process and lift some of the burden off of your shoulders.