How does the deductible work with roof replacement cost coverage?
Short answer. With replacement cost coverage, the insurer pays the full cost to replace the roof minus your deductible, but usually in two parts: an initial payment with depreciation held back, then the held-back amount after the roof is replaced. If you complete the work and submit the final invoice in time, your deductible is your only cost for the insured scope. Upgrades and any items left off the estimate are extra.
How the money flows
- Replacement cost of the roof minus depreciation minus deductible = first payment.
- The roof is replaced.
- The final invoice goes to the insurer, which releases the depreciation it held back.
- Your out-of-pocket for the insured scope: the deductible.
Ways homeowners end up paying more than the deductible
- Missing the depreciation deadline. Many policies require the work to be completed and claimed within a set time to recover depreciation. Check the loss settlement section and ask for an extension in writing if needed.
- Never submitting the final invoice. The held-back money is not released automatically.
- Gaps in the estimate. Items the adjuster missed, such as drip edge, starter strip, steep charges or decking, must be supplemented or they become your cost.
- Upgrades. A better shingle line or extra features beyond what you had are yours to pay.
- Code items without ordinance or law coverage.
When the policy is not really replacement cost for the roof
Some policies pay the dwelling at replacement cost but the roof covering at actual cash value or on a payment schedule. In that case, depreciation is never released and your share includes it. See payment schedule endorsements.
For the second check, read recoverable depreciation, and for missing items, supplements.