My roof is brand new, why can't I get home insurance?

Like everyone else your neighborhood, your home got beat up by a hail storm this summer. And like everyone else in your neighborhood, you got a nice, shiny new roof. Unfortunately, that brand new roof may put you in a spot where you cannot buy home insurance – or keep the home insurance you already have. Insurance companies are tightening their belts when it comes to who can, and cannot, have home insurance, and your new roof could be a red flag. Here’s why:

Building codes allow for differing amounts of roof layers (each layer of shingles is considered one layer) depending on where you live. In Colorado Springs (where I’m posting from), you can have a maximum of three layers. It's what happens after you reach your 3rd layer that has insurance companies running for the hills – or sending you packing (insert your favorite analogy).

Why insurance companies may not sell you insurance with a brand new roof:

If you have a three layer roof, the next time you file a roof claim you will have to remove all layers on your roof and start over (go back to one layer). This dreaded “tear down” adds thousands of dollars to the bill, which the insurance companies are on the hook for. Think about it, you’re an insurance company with 100,000 home insurance policies. A major hail storm wipes out 10,000 roofs that have three layers, and you get stuck with the bill for an extra $20,000,000 for tear down. In case you didn’t count all the zeros, that’s twenty million dollars…EXTRA…just to get the roofs ready to be re-roofed!

What is the EASIEST way for an insurance company to remove the risk of paying for your tear down? You guessed it, not let you have insurance on that shiny new roof of yours – if it has three layers. If you are buying a new home it is becoming increasingly important to have the home inspector check for the number of layers on the roof. IF it has three layers, have a conversation with your insurance agent BEFORE you buy the home. It may be important to negotiate for a new roof with the seller; and if it’s time to replace an old or damaged roof and you ALREADY have two layers, make sure to discuss a tear down with your roofing company to keep you from reaching your 3rd level. Even in situations where your insurance company just paid to put another roof layer on your home, it is still VERY possible to find your policy non-renewed because it now has three layers.

Insurance companies are becoming increasingly picky with who and what they insure due to the economic environment. Do a review with your local, professional agent every 12 months to make sure you’re staying up to date with the changes.

By Robert Edgin

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