The Truth About the Insurance Claims Process (and Other Helpful Info!)

Few things are as stressful as dealing with an insurance claim on your home. If your home gets hit by large hail, not only will you have a lot of cleaning up to do, but now you will also have to take on the task of getting the insurance company out to assess the damage and then scheduling a reputable contractor to come out and do the work. This can be a challenge!

Spring and Summer along the Colorado Front Range is prime time for hail. It’s often not a matter of if there’s going to be hail damage this year, but when and where! Most homeowners only have to deal with hail claims once or twice in their lifetime and your first time of dealing with it can be overwhelming, for sure.

We have managed hundreds of claims over the years and constantly hear a ton of misinformation and horror stories from clients. First off, before you get hit with hail, it’s important to get in touch with your insurance agent and make sure you have the correct coverage. The biggest mistake I see is homeowners opting for lower premiums in exchange for either high deductibles or subpar coverage (leading to higher out of pocket costs for you). All too often these are discovered after hail hits their home.

From our side of the fence, here’s what you need to have in your policy (keep in mind, we’re not agents, but run into these issues multiple times every year):

• Know your hail/wind deductible. $1000 used to be the standard, but not any more. It’s common to have a ½% up to 2% (of your home value) these days. I see lots of deductibles ranging from $1500-$5000 on average. This can be a big shock when you didn’t realize it had changed.
• Confirm your policy has code coverage (also known ordinance and law). This coverage provides funds to your claim in the event your roof needs to be brought up to code. If you don’t have this, you’ll most likely have to pay for these out of pocket.
• Check to make sure you have an RCV policy. This is full replacement coverage. The other option is called ACV-only which pays out the depreciated value of the roof (could be ½ or less of the total!). The ACV amount is generally not enough to cover a total replacement, so you will likely have to come out of pocket to make up the difference if you don’t have an RCV policy.

A bad policy can result into a financially stressful situation for you. We can’t tell you how many times we’ve come across claims where the homeowner has an ACV-only policy with a high deductible. Example of this: your roof is determined to be $10,000 to replace, your 30-year shingles are 15 years old (½ its life so $5000 of the total gets withheld as depreciation) and your deductible is $3000.  In this example, you would only get $2000 from your insurance company for a roof that will cost 10k to replace. Ouch! That’s not a fun conversation to have with a homeowner.

Roofing is big business in Colorado. Your roof is the most important structure in protecting your most valuable asset, your home. The vast majority of houses in Denver have asphalt roofs. Asphalt is a very light-weight and economical roofing product. Roofs are designed to shed and keep out water from the extremely expensive interiors, so the roofing material’s job is to protect the roof deck from getting damaged.

Your roof is only as good as the install, though, so make sure you only hire a highly reputable company!

The insurance industry has changed over the years and we often run up against other companies who don’t know how to navigate the claims process. While our experience makes it easy to stand out amongst our competitors, the shear volume of bad roofers in Colorado create a lot of issues to overcome (bad info, mistrust, frustrated homeowners, etc.). We always tell our clients that homeowner education is our top priority during the first meeting.

The inspection is the easy part. Yes, your roof is damaged or no, it’s not. Getting you on the same page with us is vital at this point. You don’t need to know everything about roofing, but you should be familiar with the claims process and understand how all of this is going to go.

Here are the 7 basic steps:

• Step 1: Get a roof assessment by a quality professional. Have your roofer actually walk your roof (or use a drone) and take photos of the damage. We use the term assessment because we get asked for an estimate 9 out of 10 times and that term (estimate) is generally being used improperly.
• Step 2: File a hail claim. Call your insurance company’s claim #, not your agent. They will send your claim to an adjuster who will schedule your inspection. If you would like your contractor to be there for the adjuster meeting, that is your right as a homeowner.
• Step 3: Give your claim estimate to your contractor. We can’t stress this enough. Your adjuster will create the estimate not the contractor. Almost every insurance company uses a program called Xactimate which gives the market rate for each line item on your estimate. A bid from your roofer is redundant. By giving this document to your contractor you are speeding up the process. The only time you would need a bid is if you’re planning on upgrading to a different material that is going to cost more than your current roof.
• Step 4: Sign the contract after the insurance company approves the replacement. Do not sign one beforehand. This is a tactic lots of companies use to trap their customers into using them and it’s totally unnecessary and risky for you. Contracts are only valid if there’s a dollar amount and that only comes once the roof has been approved.
• Step 5: Deposit your check. You’ll get a portion of the total up front (the rest generally gets released once the work has been completed and invoice for). If you have a mortgage company, chances are their name will be included on the check. If this is the case, you’ll have to have them endorse it. If it’s a local bank, you often can just take it in to the branch. Otherwise, you’ll have to send it to them. This can delay the process by a few weeks.

SIDE NOTE: it’s common for construction companies to ask for a deposit. How much and when they ask for this varies by company. If this is a company you trust and has a great reputation, you shouldn’t be concerned about paying your deposit. The trouble comes in is with out of state companies. These are the ones who are stealing deposits and disappearing. Again, only use local companies.

• Step 6: Get your build scheduled. Some people choose to wait until the Fall, but most choose to get their new roof right away. During large storms, it’s common for the build queue to get backed up multiple weeks. This is often due more to the material supply company than anything. Stay on top of your roofer, but also have patience.
• Step 7: Finishing out your claim. You’ve deposited your first check (also called the ACV check) and now you need to get the rest of the claim money from the insurance company. This will only be released once the work is complete and an invoice from your roofer is sent in to the adjuster. ALL checks will be sent to you, the homeowner. On most claims, your only out of pocket expense should be your deductible. Make sure the final invoice from your roofer matches up to the final estimate.

ANOTHER SIDE NOTE: Colorado enacted a law in June 2012 stating that homeowners are responsible for paying their own deductibles and cannot be absorbed, waived, or rebate/compensated for (like marketing or sign credits, etc.) by the contractor. We can lose our license for doing such things. Any one offering to waive your deductible should NOT be trusted as a contractor. They will make up that cost somewhere and it’s likely to be in the labor or materials. I know it’s tempting, but be very wary when someone offers this to you.

Something else to consider is the material you are going to have put back on. We hear people ask why companies don’t make their products hail-proof. For most products (asphalt, tile, metal) there’s no such thing. We’ve seen the testing and hail creates so much force! Some products are definitely better than others at holding up to hail, but they are generally more expensive and heavier (and not all houses can support heavy loads).

Companies like Atlas Roofing make higher-end asphalt products that are rated as “impact resistant” or “Class 4”. Check with your agent to see if they give a discount for you having a Class 4 roof. It could pay for itself down the road!

There are non-asphalt products like tile, metal, and synthetic roofs. The costs vary greatly between products, but they all generally are better protection against hail than any asphalt on the market. If you have an interest in upgrading your roof from asphalt, make sure you understand all of the options available to you. If you truly want to never have to roof your house again, you’ll want to look at F-Wave’s REVIA™ premium synthetic shingles. This is the most affordable hail-proof product on the market! 

We spend a TON of time correcting misinformation. The biggest one being that you need to get estimates up front. This is nonsense. If we spent the time it takes to create a full bid for every client, we would only be able to take care of maybe 25% of the claims we do every year. That means 75% of you will be waiting because we are all too busy writing up bids instead of getting on roofs and letting your adjusters do their job.

Whichever contractor you choose to go with, make sure it’s someone you trust to represent you and your home with integrity and quality. There are a handful of incredible companies here in CO but a large number of bad ones. It’s very easy to research companies nowadays. Do your research before signing with somebody and you will save yourself a ton of headache along the way!