The Basic Math of Roof Replacements
After the devastating hailstorms that continually sweep through Central Texas and the ongoing potential for similar climactic upheavels, concerned homeowners have called us repeatedly to inspect their roofs. Since for most of us our homes are our single largest investment, we are justifiably apprehensive when Mother Nature’s volatility threatens the one thing that provides shelter for us and for our families.
The process of assessing roof damage and filing an insurance claim is not as simple as it may appear. We at Aurum Roofing strive for full transparency. We are interested in replacing your roof, if indeed this is necessary. But more than that, we are interested in building an ongoing relationship with our customers that goes beyond fulfilling the immediate needs of the moment.
Assessing the Roof Damage
Most insurance companies consider a roof to be a total loss when their Field Insurance Adjuster, which represents the interests of the company, identifies 8-10 hail hits for every 10 x 10 square footage of your roof’s surface. Although this may appear as a simple enough calculation, the math doesn’t end there. To establish a viable insurance claim, your Roofing Contractor, representing your interests, must provide documentation in the form of zoomed-out photos from all sides of your home, including the North, South, East and West facing gables. Each of these must cover the same requisite 10 x 10 square footage area as the initial one.
These zoomed-out photos are critical to the roof claim process and will show you, as well as your insurance company, that your claim has validity. You can then simply use your pointer and thumb fingers to zoom in and out, enlarging or reducing the photos as you check the entire roof area. Hail damage is obvious. You do not have to be a roofer to reach that conclusion.
True Hail Damage
Click to enlarge
Questionable Hail Damage
Click to enlarge
Should You File a Claim?
The days of $1,000 deductibles on insurance policies exist only as fond memories of an era that no longer exists. As insurance companies have undergone the costs of paying for catastrophic losses, from wildfires to floods to tornadoes to lightning strikes, so has the burden of out-of-pocket costs that are passed on to consumers. Your purchase of coverage is a sharing agreement with your insurance company. Along with your commitment to pay the costs of escalating premiums is your pledge to also share in the cost of every claim that you file.
Deductibles today, or your share of each claim, are generally based on a percentage of the value of your home, which excludes the value of the land in which the home is placed. Your deductible can range from 1% to 2% of the value of the house itself. And given the recent escalation of real estate prices in the Austin Metro Area, the dollar figure that is the responsibility of the homeowner can reach as high as $10,000 or $20,000 for homes that are valued at $1,000,000 or $2,000,000 respectively. These are sobering figures, even if your deductible is calculated at a much lower figure.
An additional consideration is that most of us do not pay for our homes outright, but rather have mortgages that allow us to make payments over many years. That being the case, your insurance company will not make your claim checks solely in your name. Checks are written in the name of the consumer and the name of the lien holder, or the bank or mortgage company that receives your monthly payments. This ensures that the money from the insurance company will go to the repairs needed to restore your home to its original valuation.
A Few More Numbers
Is filing an insurance claim the only solution to obtaining a roof replacement or are other avenues available to consumers? This may be especially true if the roof replacement dollar figure is close to the deductible cost. If this is the case, a homeowner may wish to forego filing an insurance claim to avoid the subsequent higher premiums or the cancellation of their homeowners’ insurance policy.
Two cards from a playing deck and some manipulation of numbers illustrate this concept. Joining the cards at the top represents the line of the roof, while the spread-out base of what is now a triangle stands in for the home’s foundation. The cards can either be placed higher or lower to mimic the contours of an actual roof. A quick calculation of what now is the Length X Width X 2 (the 2 cards) = _______ Total Square Footage of the Roof X $6.15 per Square Foot gives you a dollar figure of the Total Cost of the Roof.
If the foundation size of our imaginary house is 30’ X 30’, this gives a total foundation square footage of 900. This figure multiplied by 2 equals 1800 roofing surface area square feet. This 1800 times $6.15 (the average roofing rate cost per square foot) equals $11,070 as the Grand Total Roof Replacement Cost. If the deductible is close to $10,000, the insurance payout will be approximately $1070. Is this amount worth a claim? Negotiating your roof installation for $10,000 cash, with no Insurance involved, may be worth considering.
A Cautionary Tale
The meaning of a Cautionary Tale is a story that carries a warning to others. Our story is true. It happened to a homeowner during the devastating freeze that hit Texas during February 2021. The homeowner suffered a catastrophic loss due to frozen water lines bursting, causing major flooding and damage to the home. Secure in the thought of having adequate coverage, the owner filed an insurance claim, which was dutifully paid by the company.
But the quirks of Central Texas weather were not finished with our beleaguered homeowner. A mere two months later in April, a severe hailstorm caused major damage to the home’s roof. Although reluctant to undergo the cost of another deductible on a second claim, the owner felt the only alternative was to pay the out-of-pocket costs to replace the roof.
The insurance company rejected the claim, indicating the reason as the high volume of submitted claims during the year. In the acrimonious discussions that followed, the insurance company compared the homeowner to a teenage driver who is a poor insurance risk because of a history of repetitive speeding tickets and fender benders. Adding insult to injury, the company threatened to cancel the homeowner’s policy unless the roof was restored to its original condition, which had been the contractual obligation when the initial coverage was done.
