Roof Replacement Deductibles

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    Photo of a roof replacement project by DolfinDans/Flickr.

    Just to make sure we're all on the same page of fine print, a deductible is a specific amount of money that you the homeowner pay toward the cost of an insurance claim—in this case, replacing your roof. Once your deductible is met, in most cases the insurance company pays the rest. For example, if a new roof costs $8,000, and your deductible is $1,000, your insurer will pay for $7,000 of the roof replacement. It's generally that simple. However, deductibles and other insurance policy features vary by company and your specific insurance product (policy), as well as state law. Here's what you need to know about deductibles and roof replacement before you file a claim for a new roof.

    Damage-Specific Deductibles
    The insurance industry refers to causes of property damage as perils. Most homeowners insurance policies are structured with "all peril" coverage and are packaged with an "extended coverage" clause that covers (among other things) hail and wind, the two most common perils leading to roof replacement. With this type of policy, a single deductible amount applies to all covered damages. Other types of policies may cover hail or wind only as a "named peril," or they may attach a separate deductible for your specific type of damage. It's important to know what your policy covers and how deductibles are applied to roof replacement. High winds, hurricanes and tornadoes often are grouped under the common peril labeled "windstorm," but some policies may include different deductibles for hurricanes as opposed to other storm events with high winds. The bottom line here: check your policy.

    Contractor "Discounts"
    You may have heard of roofing contractors paying for customers' deductibles or offering discounts or allowances to offset deductibles. Industry experts discourage this kind of incentivizing, and in some states the practice is illegal. As a general rule, information about your deductible and your insurance policy rules should remain between you and your insurer, and contractors should not pay a homeowner's deductible.

    Deductibles Don't Count Toward Extras
    When figuring your total out-of-pocket cost for a roof replacement, add your deductible to any extras or upgrades that aren't covered by the claim payment. In a typical scenario of an insurer paying the replacement cost of a roof, the adjuster will offer the market price for having the existing roof replaced with a similar product. If your old roofing is standard 3-tab asphalt shingles and you want to replace it with a higher grade of "architectural" shingles, you'll have to pay the price difference for the better material—on top of your deductible.

    Deducting Your Deductible
    Don't get too excited about this option before talking with your tax adviser, but it's possible that your deductible and other out-of-pocket expenses related to a roof replacement are tax deductible. Naturally, there are many conditions involved, and this requires itemizing your deductions on your tax return. Some conditions are time-sensitive, so be sure to consult a tax adviser as part of your claims process.

    For more information on homeowners insurance deductibles and claims for roof damage, visit the website of (or call) your state's insurance department. And to perform the actual repair, hire only a licensed, reliable roofer.
     
    Updated January 24, 2018.
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