Hi EnLifers!! I’m back!!! Man-it was a busy summer and we’re just getting into a groove with school starting! So in all of the busy-ness of life, I stumbled upon something I was unaware of regarding my homeowner’s insurance. A storm hit our area in March of this year and one of our neighbors had some major roof damage also resulting in some major interior damage. She was telling me about all of the problems she had with insurance covering the losses because she had a policy that provided “Actual Cost Value” coverage and she had no idea. So then upon researching it, I found out why that would be a major issue. So, Actual Cost Value (ACV) means that the insurer will pay for losses LESS the depreciation for the age of the roof and home interior in addition to the normal deductible. What this meant is that if the roof and interior were depreciated, let’s say down to $5000, then the insurance will only pay that minus the deductible. However, if in reality it costs $15,000 to fix your roof and/or home interior, then you’re out $10,000.
Of course, I looked up my coverage immediately mainly because 1) I wanted to see what we had and make sure we were adequately covered and 2) since there seemed to be a lot of damage in the neighborhood, we wanted to get it checked out to make sure we didn’t have damage that we couldn’t see. Fortunately, I had something called “Replacement Cost Value” on my home and roof. What this means is that the insurance company will cover the real total amount of what it costs to replace and/or repair the roof and/or home interior minus the deductible of course. So, I breathed a sigh of relief UNTIL a month ago! When my insurance renewed, they automatically switched our roof coverage to ACV due to the age of the roof (everything else is still replacement value). When I noticed, I called to find out if I could have to have it switched back and was told I could not; however I could switch to another insurance company that would which is what I plan to do. In the meantime, hopefully our roof is ok. I’m nervous to get anyone to check it out as I’ve heard about scammers who inspect the roof, but actually create damage while up there. Before I go through any of that, I’d rather get the roof insured entirely. So, hopefully this helps you educate and prepare yourself before sustaining an actual loss. As always, please share with anyone you think would find this information useful and please share your stories if you’ve been affected by this or have any tips to share!
Happy Fall!!
MK