Insurance Corner- There's a time limit?

When your roof begins to fail, whether from old age or a storm, time is of the essence. Damage to your roof can cause water damage which can lead to structural damage to your home. But by acting quickly, that may be avoided. There are a lot of reasons why people wait to file insurance claims for property damage. Whether you are a homeowner or business owner, you may be tempted to wait to file a claim or call your insurance company because you are worried how a claim will affect your rates, if it would be cheaper if you did it yourself, or you’re confused about the claims process.

However, don’t wait too long. Policyholders are held to a number of important time limits when resolving a claim. Missing these deadlines could complicate your claim. In addition, the damage caused by the delayed repairs may not be covered by your insurance company due to negligence.

How much time do I have to file a claim?

Most standard policies require that you file your claim within one year of when you determine that your home has damage. Most policies have a stipulation that repairs be completed within 1 or 2 years from the date of loss. That is important to note that it is not from the date of reporting. For example, if you have a hailstorm on January 1st. You report it on June 1st, you would only have 6 months to have the repairs complete. (if your policy stated you had 1 year to complete repairs)

How long does it take for an insurer to pay a claim?

The claims process can vary by state. Some state laws don’t specify a specific timeframe for insurance payouts and only grant a “reasonable” amount of time to either deny or pay a claim.

Another variable is the number of claims in that area. For example, if a big hailstorm tears through a town there will be a lot of claims at the same time. This makes claims take longer because they have more homes to visit.

What is the insurance company’s payment process?

First Check (ACV, Actual Cash Value)

The first insurance check for your roof replacement should be sent to the policyholder from the insurance company as soon as the insurance adjuster has completed their roof damage assessment and the claim has been approved. Your check will be for the current value, determined by the insurance company, of the damaged property. For example, you have a ten-year-old roof. When it was installed it cost $20,000 but now your aged roof may only be worth $14,000.

Second Check (RCV, Replacement Cost Value)

The second check is held back until the repairs to your roof are completed. This second check is a percentage of the total settlement and is referred to as “recoverable depreciation” or “withheld depreciation.” It is sent to the you when the insurance company receives an invoice for final payment and certificate of workmanship.

Be aware that most settlement checks are valid for 180 days. If the homeowner allows this check to expire, the bank will not honor it and a lengthy process begins to have this check re-issued.

How long do I have to get the roof fixed after I am approved?

Depending on your insurance policy, you typically have 1 or 2 years from the date of loss to get the roof fixed. Not the date of reporting. It is important that homeowners be aware of the time they are filing the claim versus when the hail or wind actually happened. For example, if you have a hailstorm on January 1st and you report it on June 1st, you would only have 6 months to have the repairs complete (if your policy stated you had 1 year to complete repairs).  The date of application or approval do not change the date the repairs need to be done by because the due date for the repairs is based on the date of loss.

What happens if I don’t get it done within that time frame?

If the damage doesn’t get replaced after this 1-2 year period, the homeowner is no longer able to collect their depreciation payment (second check).

How does weather play a role in all of this?

Weather has a big impact on the claim and repair process.  Your appointment may be rescheduled because of bad weather.   This could happen multiple times.  Adjusters cannot access the roof or perform a proper inspection, when it’s raining or snowing.  Mother nature also can make the repairs difficult.  If rain is in the forecast, responsible roofing contractors will not open the roof due to the risk.  Temperature also plays a big part.  Some shingle manufactures void their warranty if is too hot and cold during installation.

If you have any questions regarding claim timing or anything about property insurance and filing claims, comment below and we will answer your question