Your Roof and Your Insurance Policy

For the past twenty years the interest in roofs by the insurance industry has increased exponentially. From simple questions about type and age the topic has evolved to high tech AI assisted ariel imagery being used to develop numerical scores. The images are used to identify roof covering material, estimate roof age, detect wet areas, and evaluate the condition of the roofing materials. We have previously written an article on insurance roof inspections.

The Roof Score

Technology and data streams have evolved into a score that can be used in rating algorithms. Verisk, one of the largest insurance data providers, has a specific roof scoring product they sell to insurance companies.   This score can determine how your policy will be managed at renewal. Based on the score it can trigger a premium increase that is within the amount allowed by state law. Some insurance companies will offer a conditional renewal based on your agreement to replace or repair the roof. Others may issue notice of cancellation based on hazards identified by the survey.

As a new customer seeking coverage, the roof score is used as a risk selection tool. A low score will most likely lead to a decline.

Impact of Roof Condition on Profitability

What drives this intense interest in roof? Per Verisk wind and hail events account for nearly 50% of all residential claims, with roof-related claims making up the majority of those losses. As the cost and frequency of severe weather continue to rise, so does the financial burden on insurers especially when the average roof replacement cost is $28,000. Roofs in poor condition (RCS scores 4.7) represent 38% of residential properties in the U.S. Pre-existing conditions such as small hail storms reduce resiliency, making some roofs far more vulnerable than others.

Roof Age Reality versus Marketing

A recent roof purchase was advertised as a fifty-year roof. The manufacturer offers a fifty-year warranty on materials. What an incredible deal! But as we tell our clients, read the small print. The small print is the actual warranty.

The major cause of roof claims is water intrusion. That is commonly caused when the roof covering is lifted and displaced by high winds. Your roof installation will have a specific roof uplift rating assigned.

The second cause of roof claims is hail damage to the surface. The roof surface may also have a hail resistance rating assigned. The higher the uplift and hail rating are, the better the roof is expected to perform. The best roofing shingles come with a 15-year warranty against wind uplift and damage. The balance of the 50-year warranty is a depreciated scale of reimbursement for new roofing.

Hail resistance ratings are based on UL testing protocols. There is some research suggesting that the UL rating system does not address the impact of climate change on hail size. For a deeper drive into roof warranties and roofing shingles see our previous Insight articles.

The insurance companies have read warranty documents, and they use the 15-year-old number as the end of “new “roof time for your building. As your roof ages beyond this time, the higher the chance of your insurance company recommending replacement as a condition of coverage.

Actionable Steps

Now you have this information, what can you do about it? The first is to know the age of your roof. If you respond, “I don’t know” the insurance company will use a number from the roof inspection of something past the 15-year number.

What is the roof material? Different materials from the same manufacturer can have widely different wind uplift and hail ratings. If you have the original contracts, then keep handy for material identification.

If you are getting a new roof, ask about the best wind uplift that can be obtained. The added cost may be negligible compared to ongoing higher insurance costs. The same applies to hail resistance ratings. Get the specifications in writing and in the contract. Take photos of the roof material packaging and keep any specification sheets provided. Copy these items and send them to your insurance agent or company.

If you get a roof related insurance recommendation or cancellation, engage a reputable roofing company to inspect and offer a written report on roof condition. If the inspection is favorable, you can use it to refute the automated evaluation. If the roof inspection reveals defects, repair them and provide documentation of the repairs.

The Driehaus Difference

This is the latest in a series of articles that we have published about this topic. This is not new material for our decision-making processes. We have the knowledge and experience that allow our staff to build stable and cost-effective insurance programs for our clients. Call 513-977-6860 or reach out via our website, www.driehausins.com  to get us involved. We want to be your insurance provider.