Most insurance companies either refuse to insure homes with older roofs or price the policy so high that it's cost prohibitive.
The roof surfacing payment schedule is an endorsement that provides these homeowners with coverage at a more affordable price. It also allows homeowners to replace their roof when necessary rather than when it reaches an inflexible age cut-off.
How a roof surfacing payment schedule works
A roof surfacing payment schedule modifies how your roof is insured. Without this endorsement, a roof is typically covered for its replacement cost – that is, how much it would cost to completely replace the roof with similar materials at today’s market rate.
Once the roof payment schedule is attached to your policy, it lowers your premium significantly and covers the roof surface based on its age and surface materials.
In this case, a roof surface includes its:
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Shingles
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Tiles.
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Underlayment.
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Felt.
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Membranes.
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Vent.
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Drip edges.
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Turbines.
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Skylights.
Other roofing components may also be included.
The nice thing about this endorsement is that homes with older roofs can actually get insured instead of being turned away or forced to go to state-run insurance programs for coverage. And if you have a new roof, the schedule’s impact is very little, but you still save money on your home insurance premium.
This endorsement only applies to roof surfaces for wind and hail damage. Other damage to the home is paid on a replacement-cost basis as usual.
Who needs the roof surfacing payment schedule?
The roof surface payment schedule is designed to make a home insurance policy more affordable for homes with older roofs. But anyone who wants to save more on their premium would be a good fit for this add-on.
Depending on the state and the type of policy, this endorsement can apply to homes with:
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Shingle roofs more than 10 years old.
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Metal roofs more than 10 years old.
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Tile roofs more than 10 years old.
What are the benefits of a roof surfacing payment schedule?
The biggest benefit of this type of coverage is that it lowers your premium in exchange for a lower amount of roof coverage – but only for wind and hail damage. In short, the older your roof, the bigger your discount.
It’s also useful if you don’t want to pay for a brand-new roof in order to get insured to meet your mortgage requirements.
How is the roof payment schedule determined?
Roof claims for wind or hail damage are paid out on a set schedule based on the roof’s materials and age.
This is the roof surface schedule:
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Metal reaches maximum limit of 30% at 30 years (1% a year).
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Tile reaches maximum limit of 60% at 30 years (2% a year).
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Shingles reach a maximum limit of 75% at 19 years (4% a year).
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Between zero years and the years listed above, the change in percentage occurs linearly annually.
So say your shingle roof is heavily damaged during a windstorm, and it would cost $15,000 to replace it. Now let’s say your roof is 12 years old.
According to the schedule, your roof is reduced by 48% (4% x 12 years = 48%). That puts a potential payout for this claim at $7,800 ($15,000 for the replacement cost minus $7,200 for the schedule's impact equals $7,800).
When does the roof surfacing payment schedule apply?
The roof surfacing payment schedule only applies to roof damage caused by wind and hail events. That includes:
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Windstorms.
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Hail storms.
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Sleet.
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Hurricanes.
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Tornadoes.
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Derechos.
So if the roof is damaged by another event, like fire, the roof surfacing payment schedule wouldn't apply.
Does the roof surfacing payment schedule affect the rest of my home?
No, even with this schedule, the rest of your home is still insured up to its coverage limits. So say a hurricane tears a hole in your roof and water gets inside your home. Damage to the roof surfaces would be paid out subject to the schedule. The rest of the damage would be paid at what it costs to rebuild without applying the schedule, if you have replacement cost coverage.
