Buying a new home can be very exciting and there are a lot of things that you can look forward to. However, there are some other less fun details that you have to attend to such as your homeowner’s insurance policy. This might seem straightforward, but there is actually more to this than meets the eye, particularly in terms of your roof.
What Damage Will Be Covered?
Most homeowner’s insurance policies will cover any damage done to the roof that you cannot prevent. This will include the damage that is caused by an act of God such as hurricanes and tornados. Other common sources of damage may also be covered such as hail, rain, and wind. However, the conditions for this coverage will vary depending on the insurance company and policy.
Overall wear and tear will generally not be covered and these are costs that you will have to cover yourself. It is recommended that you talk to your insurance agent about what will actually be covered because of the intricate nature of these policies.
How Is The Damage Covered?
When it comes to this insurance, the value of the roof will be assessed in 2 ways. The first will be the actual cash value and is the depreciated value of the roof. This valuation will take into account the age of the roof at the time of the damage. Formulas used for depreciation will be determined by the insurance provider and there are no industry standards.
The second option is the replacement cost value. This valuation will not take in depreciation and only looks at the cost of replacing the roof at the present time. It might seem tedious to determine which method your policy uses, but it can make a big difference when you need to replace your roof in order to cover the damage.
Why Do You Need To Know How Damage Is Covered?
You need to know how your insurance policy works and how everything will affect your deductible, premiums and your bank account. Using this information, you will be able to determine if a policy is the best option for you. It is important that you talk to an insurance agent to ensure that you get the best policy for your needs. However, there are some other factors that you can consider.
ACV policies will generally have a lower premium, but the depreciated valuation of the roof will result in a higher out of pocket payment. The RCV policies will have a higher premium, but when it comes to replacing your roof under the policy, you only have to pay the deductible.
There are other conditions that you need to consider when you decide on a homeowner’s insurance policy. The type of damage that is covered and the type of coverage are important, but you also need to look at the cost of the coverage. This will include the deductible and the premium that you need to pay. All of these factors together will determine which policy is the best for you.