Olathe , KS · Member since 2014 · 5 posts · 2 votes
Looking for some insight from people familiar with rental property insurance. I have 8 SFRs. All are insured with State Farm. My current policies have an actual cash value endorsement on the roof meaning that in the event of roof damage, I would receive the depreciated value of the roof. I recently got quotes from a broker for the 8 SFRs (Safeco is the carrier on these quotes). The broker says that these policies cover full replacement costs on the roof. I showed my State Farm agent the quotes and he said that they only cover ACV not RC costs because "no one insures rental property roofs for full replacement costs".
Does anyone have full replacement cost coverage for roofs? If so, who is the carrier? Any other information would be appreciated.
1). There are many companies who offer Replacement Cost on roofs.
2). Many companies will have an endorsement stating that if the roof is "x" numbers of years old, 15 to 20 years old, they will only pay ACV on the roof
3). Your State Farm agent only reps 1 company. There are 2,200 A rated insurance carriers in the US. How would he know what other companies are doing?
1). There are many companies who offer Replacement Cost on roofs.
2). Many companies will have an endorsement stating that if the roof is "x" numbers of years old, 15 to 20 years old, they will only pay ACV on the roof
3). Your State Farm agent only reps 1 company. There are 2,200 A rated insurance carriers in the US. How would he know what other companies are doing?
Insurance Agent · Norwalk, CT · Member since 2016 · 2k+ posts · 1k+ votes
9y
Alden,
Jason Bolt is correct. We represent many companies that insure homes & rental properties in different states. The norm is that the Replacement Cost Coverage extends to the roof. Most policies that have the Replacement Cost endorsement included are written such that the company will only pay Actual Cash Value until the work is done and then they pay Replacement Cost.
We write with Safeco as well and for the policies in our area and they have been a good company. They are owned by Liberty Mutual.
One thing to check for with any quote is, are they offering the same coverage as you have now. Obviously the roof coverage is superior to what you have but are the other coverage the same or better. If the policies are "Dwelling Fire" policies, you should check that the coverage is at "Special Form" (often that is referred to as a "DP3") form.
Some times an agent or company will offer lesser coverage at at lower price. If you get quotes at DP1 (offers the least coverage) or DP2 (name perils - better than DP1) the coverage is less than a DP3 policy. You may enjoy the lesser rate but I would steer clear of DP1 unless there is no alternative as what's covered is very limited. With DP2 policy, you should discuss with the Agent the savings vs. what you are giving up in terms of coverage to see what is right for you.
Olathe , KS · Member since 2014 · 5 posts · 2 votes
9y
Thanks all for the input. My State Farm agent still insists that the Safeco quotes that I got won't cover full replacement. I did talk to another broker who can quote full replacement cost as well.
Investor · Edwardsville, IL · Member since 2015 · 432 posts · 481 votes
9y
I actually had to deal with this today. I had a commercial building and a sfr hit by a hail storm 3 weeks ago both insured by State Farm. Had the adjuster go over the building today. New roof, gutters and 5 a/c units totaling $38,000. I got a check today for $18,000 for "the depreciated value". Once the repairs are completed & receipts turned in, I'll get a check for the difference minus my $500 deductible. They have taken this approach so people don't just take the $37,500 with no repairs. Tomorrow I meet with an adjuster for the sfr. It needs a new roof, gutters, a/c & siding- probably another $20,000. Expensive week!
Strange part is I told my roofing company to give me a guesstimate 2 months ago on what the commercial roof was going to cost to replace so I could start putting some cap ex dollars in an account every month (roof had around 15 years left at that point). He hadn't had time to get it together for me.
Strange part is