Why Do You Need Homeowner’s Insurance?
Did you know that you aren’t required to buy a homeowner’s insurance policy in Oklahoma? Many mortgage lenders won’t offer you a mortgage without it, but it’s technically not a law that you HAVE TO have it.
Homebuyers usually search for a policy as they’re budgeting for their monthly mortgage payment. In an effort to keep their monthly costs as low as possible, they may choose the cheapest insurance policy they can find.
Premiums are often higher in Oklahoma, but that’s because your chances of having to use your policy are a lot greater here than in other states. For Oklahomans, homeowner’s insurance isn’t just a box to check, it’s an asset that protects you in the (very likely) event of storm damage.
In this article, we’re going to answer some of the most common questions we get about homeowner’s insurance to help you understand why the cheapest option is not usually the best one.
A new roof usually costs about 10% of the cost of your home, which is really expensive to pay for out of pocket. Your policy makes it possible to get the new roof you need after a storm without breaking the bank.
Your insurance policy is an investment that protects your financial health. Having a good policy provides peace of mind that you’ll be okay after a storm.
Your insurance company can't penalize you by raising your rates if you file a claim.
However, when a storm hits an area and many homeowners file claims to have their damage covered, the insurance company will raise rates on all homeowners in the area, whether they filed a claim or not! They're a business and need to make a profit, so your rate will go up after a big storm and will go down after a season or two of no storms.
We highly recommend filing a claim right after a storm if you need a repair because the damage is usually smaller and easier to deal with the sooner you take care of it. Plus, you’re likely to see a small rate increase whether you file a claim or not, so you may as well move forward with getting the damage taken care of.
Yes, you do have to pay your deductible.
Some roofers offer to pay your deductible for you, but you should be aware that they're still going to make a profit on the job. No one works for free. If they're offering to pay your deductible, that means they'll recover that cost somewhere in the course of the work they do for you.
They may cut corners by using poor materials or doing the repair too quickly, which means you're likely to need more roof work soon. In most cases, if it sounds too good to be true, it probably is.
The check will be made out to you, and you'll use it to pay your contractor for the work they've done.
Actual cost value, or ACV, policies cover the cost of what the roof is actually worth when it's damaged. If your roof is 10+ years old, that means your policy will factor in 10+ years of depreciation, lowering your total payout. The reason many homeowners choose this type of policy is because the monthly premiums are lower. Unfortunately, choosing the cheaper policy can end up costing you more when you need to file a claim.
Replacement cost value, or RCV, policies cover the full cost to replace the roof. The premiums are usually a little higher, but you won't have a large balance to pay out of pocket if you need to replace your roof.
The amount you owe after roof work, if any, depends on the type of policy that you have and the work that you have done.
Most insurance companies will only pay to replace a roofing system that is equivalent to the roofing system you already have. If a past roofing contractor cut costs or didn't put on a system suitable for Oklahoma weather, then your insurance policy will only cover a system of that same low quality.
In many cases, we recommend spending a little extra to upgrade your system to one that will provide suitable protection for your home. If you ever need to file a claim again in the future, it will then cover the cost to replace the better system you installed.
Also, ACV policies will only cover the depreciated cost of your roof, not the full replacement. You will have to pay out of pocket for any additional costs beyond the depreciated value. If the roof is 10+ years old, that cost could be significant.
If you have an RCV policy, it'll cover the full cost and you shouldn't have a leftover balance to pay.
Still Have Questions About
Your Insurance Policy?
Our project managers work with all insurance providers and can help you understand and get the most out of your homeowner’s insurance. If you still have questions about your policy or whether it will cover the damage to your roof, schedule a free roof inspection. We can take a look at your roof and help you understand what repairs your policy will cover.
