Understand your roof coverage

Climate change is making a significant impact on our society. The changes in weather patterns, including more frequent and severe storms, have greatly impacted insureds and the insurance industry. These storms can create massive amounts of damage to homes, with roof replacements driving a large portion of the loss.

As the industry tries to contain costs and keep premiums affordable, roof coverage has begun to shift from Replacement Cost (RC) coverage, which upgrades a damaged roof with a brand new one of similar quality, to Actual Cash Value (ACV) coverage for roofing claims.

ACV coverage depreciates roof claim payments based on the age and materials of the roof relative to its life expectancy. At its most basic, it is a calculation of replacement cost minus depreciation. Insurance companies typically offer a defined depreciation schedule that states the percentage of coverage based on age and type of roofing material.

Roofs have a typical life expectancy of 25-30 years. With ACV coverage, the insurance company is responsible for covering the remaining life left in the damaged roof, and the homeowner covers the cost of upgrading their older roof to a new one.

After careful consideration, Member Benefits has decided that in order to keep premiums affordable and in line with the marketplace, we need to shift to ACV coverage for roof claims. If you have a home insurance policy with us, watch for more details in your next renewal. It will include a separate deductible for wind and hail claims and a loss settlement schedule for roofs based on their age and material.

We’re confident that our depreciation schedule and deductible options are some of the more generous and customer-friendly offerings in the marketplace today. We hope this article helps you understand your roof coverage and what it will mean for you at the time of a claim. Please call us with any questions or concerns at 1-800-279-4030.