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KR Insurance Checks

You have a partial insurance check. Now what?

If you have received the check, your adjuster should have explained to you Actual Cash Value (ACV) vs. Replacement Cost Value (RCV).

Normal homeowner policies are known as replacement cost policy.

This means that you will receive the amount that it costs to replace or repair your damages, regardless of age.

An example: your 18 year old shingle roof blows off in a wind storm. You can get a new roof installed in this case because the insurance underwriter has a legal obligation to restore your property to “WHOLE”.

Your insurance company does not have an obligation to make you BETTER than WHOLE.

For example, by replacing your 25-year strip three tab shingle roof with a new 30 year dimensional shingle roof.

The replacement check is usually authorized in two steps.

Step one; At the time of the inspection, you will receive a check. This will be the ACV amount of the damaged items due to the age.

This money is supplied to offset a roofer’s material bill.

Once the work is completed, and the necessary paperwork (invoices, receipts, pictures) is sent to the insurance company, they will issue you the second check for the depreciated amount (RCV).

Too often, homeowners tend to look at storm damage as a windfall and decide to keep the insurance check without actually replacing the roof. By issuing a two part payment, the insurance company may be able to save some money on actual payouts versus loss, while limiting their liability in the future on properties that accept checks but do not apply them to the repairs.

Here is an example of a claim payment. Let’s say you have damage to your roof, and the adjuster has estimated to remove and replace it.

For the sake of this example we will say the roof’s worth today (the RCV) is $1,000.

Let’s say that the life expectancy of your roof is 20 years, and it is 10 years old.

The initial check would be in the amount of $500 (the ACV amount).

Since the roof is half way through its life expectancy, you get half the money.

Once the new roof is installed, you would get the remaining $500 of the full replacement cost, less any deductible.

In Georgia, policy’s have a ‘named storm’ deductible, which is much higher than normal damage deductibles.

Beware roofers who offer free roofing or to erase any deductible.

The BBB has specific warning tip sheets warning that this is insurance fraud punishable by arrest and lost insurance coverage!

An unscrupulous contractor can shut down and move on, the homeowner is the one trapped by their dishonest, it was too good to be true claims.

Get a free storm damage inspection from Real Good Roofing of Savannah GA, and if damage is discovered, you may be eligible for emergency tarping service at no cost to you!

BRODY is available at 912-420-GOOD

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