How does home insurance pay for hail damage?
Short answer. Home insurance pays for hail damage through a claim: an adjuster prices the repairs, the insurer subtracts your deductible, and on a replacement cost policy it usually pays the actual cash value first and the withheld depreciation after the work is done. On an actual cash value or roof payment schedule policy, the first payment may be all you get.
How the payout is built
- Replacement cost value: the adjuster prices every line item, such as tear off, underlayment, shingles, ridge, vents, flashing, gutters and labor.
- Depreciation: an amount for age and wear is subtracted.
- Actual cash value: replacement cost minus depreciation.
- Deductible: subtracted from the actual cash value.
- First check: what is left.
- Second check: on a replacement cost policy, the depreciation, released after you finish the work and submit the final invoice.
An illustration
- Replacement cost of roof and gutters: $18,000
- Depreciation: $6,000
- Actual cash value: $12,000
- Deductible: $3,000
- First check: $9,000
- Second check after completion: $6,000
Total from the insurer: $15,000. Your share: the $3,000 deductible, plus any upgrades you choose. These numbers are only an example.
Where money gets lost
- Missed line items, like starter course, drip edge, or steep roof charges.
- Code-required items the estimate left out.
- Damage found during tear off, such as rotted decking from the storm leak.
- Never submitting the final invoice, so the depreciation is never released.
The mortgage company
Checks often include your lender's name. Plan for its endorsement process so the roof is not delayed.
More: ACV vs RCV, recoverable depreciation and mortgage company checks.