Home Owners Insurance

[dusty]

is a good thing if you have it but even if you have it, it can be a nightmare to understand.

I recently had roof damage due to what the adjuster referred to as a localized micro-burst. The wind lifted about 1/3 of my roof and laid it back on top of itself.

Emergency repairs - to mitigate further damage was done immediately. Insurance company pasid that immediately. I was never involved.

The first insurance estimate was insufficient to cover the the initial contractors estimate. A revised estimate was prepared and a check was issued to cover a major portion of the damages.

I am left, however, with what the insurance company calls "recoverable depreciation". If I can show that I spent more than I have already been reimbursed, the insurance will issue me another supplemental check for "recoverable depreciation".

It sounds good but I am confused. Adjustments for depreciation are typically negative in nature. Recoverable depreciation, as explained, does not seem negative thus I am confused.

I guess I am just getting too old to keep up.

Bottom line: The roof is going to be repaired with no out-of-pocket cost to me other than my deductible. I gotta be happy about that even if I don't understand.

[BuckeyeDennis]

Dusty, no way I believe it has anything at all to do with age. I wish my company could hire young folks with even half your communication skills. Sounds like at best, insurance-geek-babble, and at worst, intentional baffle-them-with-BS tactics. At least they are paying up.

Maybe next time you send in a premium payment, you should call it an "ethyl". That oughta confuse the young whippersnappers!

[JPG]

Dusty, no way I believe it has anything at all to do with age. I wish my company could hire young folks with even half your communication skills. Sounds like at best, insurance-geek-babble, and at worst, intentional baffle-them-with-BS tactics. At least they are paying up.

Maybe next time you send in a premium payment, you should call it an "ethyl". That oughta confuse the young whippersnappers!

Better yet, call it lead tetraethyl.

I do hope you do not get into a 'co-insurance' discussion!

Babble for we ain't gonna pay 100%.

IMHO scam artists.

But then there are those pro-rated car battery warranties. Now that depreciates the amount covered when replaced.

Now your 'recoverable depreciation' seems like an attempt to make sure an overpayment is not incurred.

If those clowns would just do it the old fashioned way(get estimates from those who will 'do the job' then pay up front and expect it to be done for that), there would be less need for employees who muddy up the process(and jargon).

[claimdude]

[quote="dusty"]is a good thing if you have it but even if you have it, it can be a nightmare to understand.

I recently had roof damage due to what the adjuster referred to as a localized micro-burst. The wind lifted about 1/3 of my roof and laid it back on top of itself.

Emergency repairs - to mitigate further damage was done immediately. Insurance company pasid that immediately. I was never involved.

The first insurance estimate was insufficient to cover the the initial contractors estimate. A revised estimate was prepared and a check was issued to cover a major portion of the damages.

I am left, however, with what the insurance company calls "recoverable depreciation". If I can show that I spent more than I have already been reimbursed, the insurance will issue me another supplemental check for "recoverable depreciation".

It sounds good but I am confused. Adjustments for depreciation are typically negative in nature. Recoverable depreciation, as explained, does not seem negative thus I am confused.

I guess I am just getting too old to keep up.

Bottom line: The roof is going to be repaired with no out-of-pocket cost to me other than my deductible.]

Dusty,

Been in the insurance claims business for over 35 yrs. The recoverable depreciation you are referring to is provided for in your policy and typically goes something like this.... We (the company) owe you the actual cash value of the damages (think used car value) until such time as you have had the repairs completed (think new replacement car). The difference in these two amounts is the recoverable depreciation. The policy is set up this way to provide incentive for the repairs to be completed (your mtge company and your insurance company have a vested interest in the repairs being completed and this adds incentive to motivate an insured to complete the repairs). Most if not all policies provide a time limit to get repairs done and still get your recoverable depreciation back, typically 365 days. Beyond that time limit you lose the recoverable depreciation.

Jack

[Gene Howe]

Dusty,
It's simply a clause on a replacement cost policy to ensure that all they money the company pays is used for the repairs.
It's a paperwork hassle for both the insured and the company. But it does help to keep premiums lower.
We have an "actual cash value" policy which means that depreciation is considered in any settlement and not recoverable. Hence, the last windstorm that removed about 60 sq. ft. of rolled roofing on the shop and irreparably damaged 3 sheets of PRO Panel on the house, resulted in a repair cost of $1850 with an insurance pay out of $387 after the $500 deductible. Our roofing is all 16 years old.

[dusty]

Dusty,

Been in the insurance claims business for over 35 yrs. The recoverable depreciation you are referring to is provided for in your policy and typically goes something like this.... We (the company) owe you the actual cash value of the damages (think used car value) until such time as you have had the repairs completed (think new replacement car). The difference in these two amounts is the recoverable depreciation. The policy is set up this way to provide incentive for the repairs to be completed (your mtge company and your insurance company have a vested interest in the repairs being completed and this adds incentive to motivate an insured to complete the repairs). Most if not all policies provide a time limit to get repairs done and still get your recoverable depreciation back, typically 365 days. Beyond that time limit you lose the recoverable depreciation.

Jack

Thank you for that clarification. This explains why they are withholding the cost of a PowerPro with spare parts from my settlement check. The work that I already have scheduled will warrant them issuing that last check.

I must say that I have been impressed with how this claim was handled. With the single exception of my being a bit confused by the process, service has been exceptional and very timely. The only delay in the process was my fault when I did not FAX papers that I committed to provide.

[Ed in Tampa]

I think the reason for all of this is a one time the insurnace company came out made an assessment and issued a check to the home owner.

The repairs were his option and many optioned to do a half a--ed job and pocket the rest of the money. Next storm the insurance company was usually faced with a bigger claim as the half done job blew away and more damage resulted.

Now they give you enough money to get the job started and then when finished and they are supplied with a completed job receipt they pay the rest. Protects them, the mortgage company and the homeowner(from himself). Plus they don't end up paying for a Power Pro under the guise of storm damage

[JPG]

I think the reason for all of this is a one time the insurnace company came out made an assessment and issued a check to the home owner.

The repairs were his option and many optioned to do a half a--ed job and pocket the rest of the money. Next storm the insurance company was usually faced with a bigger claim as the half done job blew away and more damage resulted.

Now they give you enough money to get the job started and then when finished and they are supplied with a completed job receipt they pay the rest. Protects them, the mortgage company and the homeowner(from himself). Plus they don't end up paying for a Power Pro under the guise of storm damage

Gotta admit it makes more sense now. Not that I like the depreciation part, but it is like(sorta) the battery warranty, fair. Howsomeever, the original roofing manufacturer is a more reasonable participant with warranty replacement to be depreciating than a storm damage insurer.

I consider all this to be a 'cop out!

I wonder how many of the 'insured' that had their roofs replaced when a major hail storm passed through a few years back had depreciation deductions applied to their 'settlement'.

[frank81]

The repairs were his option and many optioned to do a half a--ed job and pocket the rest of the money.

That's exactly right.

After the Joplin tornado blew through, I knew of several people who decided to either rebuild smaller or not at all.

The difference is maybe your house in its current condition and age is worth $50k (current value). To rebuld a brand new, similar house would cost $75k (replacement value). If this were any other type of insurance, like the way car insurance works, you are only getting $50k if the house is destroyed and that's it. At least in this situation you can walk away with the $50k, or actually rebuild and get that extra help. Seems more fair rather than a scam.

[Ed in Tampa]

Gotta admit it makes more sense now. Not that I like the depreciation part, but it is like(sorta) the battery warranty, fair. Howsomeever, the original roofing manufacturer is a more reasonable participant with warranty replacement to be depreciating than a storm damage insurer.

I consider all this to be a 'cop out!

I wonder how many of the 'insured' that had their roofs replaced when a major hail storm passed through a few years back had depreciation deductions applied to their 'settlement'.

It is call depreciation but nothing was depreciated other than the initial payout. Again it is to prevent a home owner from fixing it cheap and taking the rest of the money and spending else where. If they are paying for a new roof then that is what should be done.