What is a roof and siding depreciation endorsement?
Short answer. It is an add on to a homeowners policy that settles roof surfacing, and in some versions siding, at actual cash value or by an age based percentage schedule instead of full replacement cost. With it, the depreciation on those items is not paid back after replacement, so an older roof can leave you covering a large share of the cost.
How these endorsements work
Insurers use them to limit payouts on aging exteriors, especially after wind and hail. Versions differ: some pay actual cash value for roof surfacing only, some extend the same treatment to siding, and some use a schedule that pays a fixed percentage based on age and material. Some apply only to wind and hail; others apply to all perils.
What it does to a claim
- Depreciation on the named items shows as non-recoverable on the estimate.
- The deductible is still subtracted on top.
- Items the endorsement does not name, such as interior water damage, follow the policy's normal settlement terms.
Siding adds a matching wrinkle
Siding damage often raises a matching question when only some walls are hit and the old profile or color is discontinued. An endorsement that pays siding at actual cash value does not settle whether undamaged walls must be replaced to match; that is a separate policy and claim question. See partial replacement and matching.
Before a storm
- Find the endorsement on your declarations page and read which perils and items it covers
- Ask your agent what it would take to get replacement cost terms back, such as a newer roof
- Set aside money for the gap if you keep it
Related: roof payment schedule endorsements.