Unless you want your insurance company to non-renew your policy, you better deal with that old roof now. Insurance companies are on a crusade to reduce risk. Severe storms with the high wind in the past few years have caused numerous roofs to fail. Older are at greater risk of failing in severe weather. If you live in a high wind area you may need to replace your old roof now or lose the risk of losing your homeowner’s insurance coverage.
Your insurance agent may inform you that your renewal is subject to an inspection of your house. Insurance inspectors are looking hard at roofs. This is a fact, I have experienced this firsthand with my properties and those of my clients. At one time this summer no fewer than four of my clients were told they must make immediate repairs or replacements of their roofs to retain their policies.
It’s not uncommon for the insurance company to simply refuse to renew the policy even after it’s paid in full. The old days of a 20+ year roof are gone in high wind areas.
Asphalt single roofs have a life
The majority of homes built in high wind areas use architectural shingles. These asphalt shingle roofs are a good type of roof and can withstand a strong storm when new but they wear out after years of use. I have seen insurance rates start to climb when a roof reaches more than 10 years of age regardless of its condition. At 15 years insurance companies do regular inspections and can terminate a policy if the roof is in bad shape.
At 20 years expect your insurance carrier to refuse a renewal. These year points are just a rule but they represent what I have observed as a real estate agent and investor.
A shingle manufacturer may warrant their asphalt shingles for 20 years but there are many caveats. The first and most important is that the roof must be properly installed. Also, if your roof has been damaged by a storm e.g. roof tiles missing and/or significant roof damage, the warranty is likely voided. The concept of the shingle warranty means that the shingle will not fail if installed properly, the shingle warranty does not apply to named storms or trees falling on the roof.
Water leaks cause more damage
You may want to give serious thought to replacing an old roof before you are faced with serious damage from hurricane-force winds or a hail storm. Once those roof shingles are blown off, water can leak into your house causing even more damage. There are various choices in roofing systems depending upon where you live.
Metal roofing is popular in areas where you are permitted to install them. A metal roof will last longer than an asphalt roof but the cost is higher and replacement pieces may be harder to find after a storm.
Hail damage is also common
Tile roofs are popular in some areas and they have a long life but like any other type of roof, they can suffer severe damage from weather. I have owned tile roof houses and on occasion, they suffer cosmetic damage from tree limbs and weather as they get older. I have also had a house with slate tiles but those are not common in high wind areas. Hail damage is not uncommon with metal, slate, and tile roofs.
If your insurance company refuses to renew your policy and you have a mortgage, a cascade effect occurs. Without insurance, you can not have a mortgage. Your mortgage company may find you in material breach of your mortgage contract. This means they can foreclose if you do not obtain the required insurance coverage. The stress that I have seen people go through when this happens is terrible. Your search for a new insurance company.
Yes, you will probably find one and they will send a policy. This is followed by an inspection and now you are back in the same position, with no insurance and the mortgage company threatening foreclosure.
If your lender buys insurance for you watch out
Mortgage insurance companies can find an insurance carrier but the coverage cost is extremely high. They do not shop for price, they find any policy that will protect their interest and pass along the cost to you. Don’t put yourself in this position. As your roof ages and it’s well over 10 years old, you will need to replace it.
Find a roofing contractor with a good reputation. Call references. Check their warranties. What happens if water leaks? Will they return and repair it? At a minimum, have a contractor look at your roof and give you a bid for a full roof replacement. The good news is that your insurance carrier will probably lower your rate with a new roof. It’s a good idea after replacing the roof to contact your insurance agent and send a copy of the work order.
Synthetic underlayment is an improvement
There is a good chance that the life expectancy of your new roof may be longer than the last one. New products have come on the market in the last decade, particularly the material put on the roof before the shingles (underlayment) is nailed on top. This new material made from synthetic fibers will last longer and help to prevent leaks if the new shingles blow off.
One of the benefits other than lower home insurance is the house will look better, and the curb appeal will improve. If you plan to sell your house in the next few years, the condition of your roof will be a big selling factor.
One thing I point out to my clients is the condition of the home’s roof. Why buy a house with a bad roof or a roof that will have potential problems shortly? Should my clients want the house, I suggest negotiating a price that allows funds to cover the cost of a complete replacement. When buying a house the same is true of a renewal. An inspector will look at the roof and the cost of the homeowner’s insurance policy will be based on the roof’s condition.
Living in a high wind area means your house is subject to structural damage and the severity of the damage can materially affect the value of your house. Even when your insurance company agrees to pay a claim from damaging winds, you will be required to pay the deductible—as much as 5% of the insured value of the house (look at your policy). The longer you wait to replace the roof, the more it will cost as prices are going up.
Deductibles can be difficult to deal with
The other thing and this is important, the claims process may leave you far short of paying for a replacement roof. The total cost of roof replacement will be far higher just after a major storm because labor and materials will be hard to obtain. A fairly minor hurricane hit my area a couple of years ago. Most damages were to roofs and fences. The problem with that storm is that many people with storm damage had just enough to hit the threshold of the deductible. This means that filing a claim meant no funds coming back from their homeowner’s insurance policy.
This happened to me with several investment properties. The cost for one property was about $6,000 and about $1,000 short of hitting the deductible so I paid out of my pocket. To prevent further damage, I had the roof tarped until the contractors could get to the roof. This was an additional $800 for the tarping.
A storm blew off shingles and the ridge caps
The type of damage is important. Some heavy winds just blow off a few shingles and the underlayment protects the roof. On one property the damage was more extensive, it blew off shingles and underlayment near the edge of the roof. It also blew off ridge caps (along the ridge of the roof). Water leaked into the building as well. I filed an insurance claim, the first in my life. This time I knew the roof wind damage was well beyond the deductible.
In the case above, the insurance adjuster performed a roof inspection and covered the entire roof because the roof repairs would have exceeded their threshold for a full replacement. Fortunately, they covered the water damage as well. I worked with the roofing contractor to ensure the roofing materials were good quality and the underlayment was state of the art.
Now a new roof and a lower insurance cost
This roof was actually in good condition, it was older and had gone through many storms without losing even one shingle. But, it was an older roof and subject to damage from a wind storm. Now with a new roof, the irony is that my rate may go down because of the age of the roof.
Don’t wait until your roof blows off assuming it’s time to have the insurance company replace it. I did not get into the issues caused by the roof and the damage caused inside the building. Trust me, you don’t want to deal with that. There was no significant damage in the interior but enough to keep me busy with various contractors. Fortunately, my coverage limit was satisfactory and the deductible was lower. I thought I was lucky.
Deductibles can be as high as 5%
Insurance carriers learn from their errors of the past. I have seen deductibles go from 2% to as high as 5% on my properties and those of clients. Further, the rebuild costs have in the past two years increased significantly. Check the replacement value of your insurance policy. This is something you should discuss with your insurance agent.
Because of my work as a real estate agent and investor, I know many contractors. During the last two hurricane events along the Mississippi Gulf Coast supplies of shingles and other materials were very short. Multiple storms from Texas to Florida happened within two months and everyone wanted shingles. The cost if you could get them was obscene. Finding a good contractor without waiting months was even harder.
Replace your roof before a wind event
The best time to replace or repair your roof is when others are not. With supply chain issues, it may be a good time before a major storm to have a roof inspection, the first step in determining if you need a new roof. Contact your insurance agent if your roof is over 10 years old. Have a frank discussion about your insurance carrier and their current attitude to a roof that is X years old. Get ahead of this if possible. If your roof is in poor condition and you are expecting to sell your house, it will go faster if you replace the roof.
Your house may not be eligible for a government-backed loan if the roof is bad. This will knock out many buyers who would otherwise be able to buy your house. The only buyers who would be able to finance will likely be the ones who will want a discount for the roof. Considering this, it may be a good idea to replace the roof and take advantage of a lower homeowners insurance policy cost now. Remember that curb appeal? Your older home may benefit from a nice-looking roof.
Roof repairs can extend the life of your roof
Roof repairs may increase the life of your roof as long as the insurance inspector will agree with repairs rather than replacement. According to an article, https://www.forbes.com/advisor/home-improvement/how-much-does-roof-repair-cost/ repairs can run as little as $100 up depending upon the work to be done. A good handyman can replace a single or two if they know what they are doing.
Roof replacement cost’s for a typical architectural shingle roof with few peaks, more of a ranch-style house can start at $6,000 and go into the low $20,000’s. If you have a hip roof or a steep roof, the cost can be higher.
The cost of a roof includes the following:
- Remove all old shingles and properly dispose of them
- Remove old nails
- Repair wood that has rotted, termite, or other damage
- Repair facia around the roof where necessary
- Paint new facia
- Lay down new underlayment
- Install new shingles
- New ridge caps
- Seal around chimneys and outlets
- Clean up after
Solar panels add complexity
If you have solar panels this adds more complexity. Generally, you would need to locate a company that can remove the solar panels completely along with wires, etc. before the roofers can do their work. After the new roof is installed the solar system can be reinstalled. It’s important that the solar installation not void the roofer’s warranty.
Should you decide to install solar panels on your home and your roof is older, it may be a good time to replace the roof before the new panels are installed. As mentioned above, solar panel installers mustn’t void the roof warranty.
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