As climate conditions worsen, roof insurers cut their losses
In an effort to stem the bleeding from insured losses due to severe thunderstorms--an increasing risk that is not likely to go away--insurers are likely to begin implementing new insurance eligibility rules.
According to a follow-up report, two ideas trending with insurers are excluding certain roof characteristics from coverage (e.g. not covering roofs with T-Lock shingles, which cannot be repaired and can only be replaced), and excluding roofs of a certain age (e.g., no roofs older than 15 years). A third, most common trend reported is a significant increase in the number of carriers offering Actual Cash Value (ACV) roof coverage, including offering policies that provide replacement cost coverage until the roof reaches a certain age (e.g., 10 years old), and then providing ACV coverage after that.
The problem with ACV, identified in the final installment of the report, is that homeowners may not understand this means paying a lot out of pocket, and not getting so much back after depreciation and deductible. According to the report, a very likely scenario is that a customer will need $10,000 for a new roof, but will only get $4,000 from the insurance carrier. The report acknowledges that some insurance agents may not be explaining all the details so well to their customers.