If you're thinking about putting a metal roof on your house you may want to call your insurance company and find out what little surprise they have in mind for you if you do that.
If you already have a metal roof on your house, it's likely that you have felt the screws tighten with how much you're paying for your insurance, but you may not know what your insurance company is doing that will dramatically increase your out of pocket costs if you ever file a claim for your roof.
Read this blog post to find out what your insurance company's "dirty little secret" is that will end up costing you a lot more money.
A lot of people ask me about metal roofs. They want to know what I think of them. They want to know if I think they should replace their asphalt shingle roof with a metal roof. Usually when I ask people why they want a metal roof they tell me that it's because they want a roof that will last forever, especially here in Colorado where we get a lot of hail.
Homeowners have a perception that a metal roof is indestructible and that hail won't damage a metal roof, but that's just not true and I will explain that a little bit further in this blog post.
But there's a dirty little secret from the insurance companies that homeowners don't typically know about when it comes to metal roofing. It has to do with what type of insurance coverage you can get for your metal roof.
Metal roofs are usually quite a bit more expensive than an asphalt shingle so you would think that if a metal roof is so much more impact resistant and less susceptible to hail damage, then insurance companies would be incentivizing people to have metal roofs installed, because by doing so they would be reducing the number of claims made, and therefore the total amount of money they would have to pay for those claims on damaged asphalt shingle roofs.
To a degree some insurance companies do offer incentives in the way of discounts on your insurance rates, but most of those companies have offset the amount of money you save on your insurance premiums by penalizing you financially in other ways.
Here are some of the ways they do that
#1 - Give you full coverage on your roof for a certain number of years, then after that period has expired, they move you to a pro-rated actual cash value policy. That means that once your full coverage period has expired they're only going to pay for a part of the total cost of the replacement of your roof. (Confused about the difference between Replacement Cost Value and Actual Cash Value coverage?)
One example of this is an insurance company that gives you full coverage for 20 years for your metal roof and then it drops to pro-rated coverage after that. So in year 21, from this company, you only get 79% of the full replacement cost, and it goes down every year after that.
You might think that's not a problem for you because you don't expect to be in your house for the next 20 years. But what about the next person who buys your house? Or even the person after that?
If you try to sell your house in the future and your buyer knows that he's not going to be able to get full coverage on his roof after a certain number of years, do you think that will potentially affect the sales price of your house? Do you think that it could possibly even affect your ability to sell the house?
#2 - Another thing that some insurance companies are doing is they're not even going to write your policy with a full replacement coverage from the start of your policy period. What that means to you is that you can't get full replacement cost coverage for your roof - EVER. Your policy coverage would be actual cash value right from the start, which means that the amount of your liability in a claim would be much higher right from the beginning of your policy period. If you have a hailstorm that damages your roof you will have to pay a much larger portion of the replacement cost in addition to your deductible (and speaking of deductibles I've got some shocking information about that which I will share in a moment).
Again, you might be willing and agreeable to have reduced coverage on your home but if you ever want to sell it, will your potential buyer be agreeable having reduced coverage because the house has a metal roof?
#3 - Another thing that some insurance companies are doing is they are writing policies with full replacement coverage but they will write into the policy cosmetic exclusions. What that means for you is if there's hail damage on your roof and it doesn't completely penetrate the roofing material or cause leaks
then they are going to consider that cosmetic damage and not functional damage, and they won't pay for the replacement of your roof. So if you get a major hailstorm that hits your house and leaves your roof looking like the surface of the moon your insurance company could deny coverage for the roof replacement.
You might be thinking, well if there's no functional damage then I'm OK with this situation. But again, consider how difficult it will be to sell your house if the roof looks like the surface of a golf ball.
The Dirty Deductible Secret
I told you I was going to tell you something shocking about your deductible. Well here's another dirty little secret that the insurance companies have.
To reduce the amount of liability they have in the cost of replacing your roof, they're quietly raising deductibles for homeowners.
What does this mean for you? It means that when you file a claim you'll have a much higher share of the cost of the repairs because your deductible will be much higher.
One of the major carriers used to have most of their clients at a flat rate $500 deductible. Then they moved those clients to flat $1000 deductibles. Than a few years ago they moved them all to flat $1500 deductibles. Now that same company is implementing a percentage deductible. A percentage deductible means that your deductible is a percentage of your home value.
This company is moving their clients to a 1% deductible. So if you own a house that's worth $500,000 your deductible for wind and hail damage would be $5000.
But it gets even worse!
Another major carrier is implementing a 2% deductible. So if you are with that company and you own that same $500,000 house, you will have a $10,000 deductible.
Currently the average roof replacement costs $15,000. If you have a $10,000 deductible then that means you will pay twice as much out of pocket for a roof replacement as your insurance company will pay you.
But if you have a house with a metal roof the chances are high that you probably live in a more upscale or luxury home. So if you have a house that's worth $1.5 million dollars and you're with a company that has implemented a percentage deductible you're going to have to dig pretty deep into your own pockets if you ever file a claim.
So if you currently have a metal roof, or you're considering installing a metal roof, I strongly recommend that you contact your insurance agent first and find out what that insurance companies policy is regarding paying for damaged metal roofs before you jump right in and have a roofer install a metal roof on your house.