Insurance Issues Part Two: Contractors say many clients unclear on policies
December 18, 2013 at 3:38 AM CST - Updated July 12 at 8:05 AM
AMARILLO, TX - More than six months after the May 28 hail storm, hundreds of Amarillo homeowners are still working out how to pay for repairs.
Amarillo contractors are finding many clients don't understand their own insurance policy, and it can be disappointing and confusing for everyone involved.
"We've seen issues where homeowners are surprised at what kind of policies they have," General Manager of DMC Construction, Drew Heape said.
Former State Farm insurance adjuster and current public adjuster Rob Kitto says knowing your policy starts with knowing whether you have an actual cash value policy or a replacement cost policy.
Actual cash value equates to what the worth of similar property would be in the current marker, minus depreciation, which is the decrease in value due to wear-and-tear and age.
With an actual cash value policy, Kitto says, many homeowners with older homes may not receive any funds to replace a roof and may only be eligible for paid labor costs for the work.
With a replacement cost policy, clients would receive funds to replace the loss at the current market value.
"If it costs $100 extra a year, it's well worth the expense to have that replacement cost benefit to guarantee that you're going to have a new repair," Kitto said.
Though construction companies and roofers are still benefiting from the May hail storm, insurance issues effect them as well. Roofers are required to install roofs up to current city codes, and if their clients policy doesn't include those upgrades, the companies sometimes end up fronting the bill.
Code upgrades cost anywhere from $400 to $700, and are only covered by insurance if the policy includes what's called "an ordinance and law" endorsement.
"It puts the homeowner and us in a sticky situation because of course we're going to install the roof to code, but the homeowner may not have the funds," Heape said.
As for homeowners who feel like their insurance company is not releasing funds allowed by their policy...
"The first thing the client should do is to call their agent to see if they can help them out," Kitto said.
If that doesn't work, Kitto says to file a grievance with the Texas Department of Insurance.
"If that point if you're not satisfied then I'd seek professional legal help," he said.
Several Amarillo attorneys are busy filing suits against insurers over hail-related matters. Heape said 18 of his clients have sued their insurance companies and won.
With hundreds of Amarillo homes still damaged, both Kitto and Heape agree a second adjustment from any insurance adjuster is not an unreasonable request.
"If it's been more than 2 months since someone's actually looked at their roof, I suggest getting their roof looked at again because hail damage only gets worse," Heape said.
Kitto recommends homeowners take plenty of pictures of the damage as it weathers and the work throughout the entire repair process to help clear up any potential problems with the insurance.
To make sure your home would be covered in an event similar to the May 28 hail storm, Kitto recommends you ask your insurance agent the following:
Is my policy actual cash value or replacement cost?
What is my deductible?
Is there an additional deductible for wind or hail damage?