insurance policy

We receive a lot of questions from homeowners and commercial property owners about roof claims. One of the most common questions is whether the insurance company is required to pay for a full roof replacement or whether the insurance company can pay for only portions of the roof when shingles or other roofing materials are damaged.

Very rarely is your entire roof blown off during a storm. If the whole roof were damaged, then clearly the insurer would owe for the entirety of the roof. Still, most roof claims involve portions of the roof being damaged or sections of shingles being blown off. In those instances, with partial damage, what is a policyholder entitled to?

Fortunately, in Kentucky, we have an insurance regulation, 806 KAR 12:095, that addresses this question. It says:

Your insurance company may not be paying all the recoverable depreciation you are owed on your homeowners insurance claim.

If you have had property damage at your home and received an insurance claim payment from your insurance company, you may be wondering why this payment is significantly less than the cost to repair your property.

Insurers will often refer to the initial payment to you as “actual cash value” or a payment that has “depreciation” deducted. The term “actual cash value” simply means the cost to replace your roof minus the depreciation of your roof. This is often calculated by the insurance company using a computer estimating software called Xactimate.

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