Loss Draft Account

[minnesotapaintlady]

I made a claim on my homeowners a while back for the hail.  I wasn't sure if there was damage or not, but called my insurance to have an adjuster come out and look at the roof.  He gave an estimate of 19K to replace the roof.  Gave me a check for 12K and told me I'd get an additional 5K when it was fixed, the final 2K was deductible.  

So, I wander over to my credit union Saturday to deposit the 12K check and they won't do it because it's made out to them as well and a manager has to sign it.  They sent me home with this list of things I need to provide before she will (basically the insurance paperwork for now).  But there is all this other stuff like contractor estimates and an inspection by the bank that has to be done later.  Then they deposited the check, but into my mortgage account.  Basically dropping the payoff amount by 12K but they said they would let me draw on it if I followed their requirements.

Why have I never experienced this before?  Usually insurance just cuts me a check minus my deductible.  Not this two payments, involve the mortgage company stuff.  This seems like a royal PIA.  I wasn't planning on just pocketing the money, but I wasn't sure I was in a big hurry either.  I was thinking of waiting until next Summer to replace it.  Contractors are so busy right now due to hail storms and shingle prices are high. 

How much time do insurance companies typically give on claims?  If I wait too long and the CU gets to keep the 12K on the mortgage I'm ok with that, but I'd like to be able to get the other 5K towards the repair too.

[haapai]

I can't answer your other questions but if you are waiting for contractors to become available and the price of asphalt shingles to drop, you have time to get a quote for a metal roof. 

My brother is opting for a metal roof on a cottage that he's not sure that he wants to hold onto.  The price has dropped dramatically in many places.   I wasn't listening too closely, but I think that it is less than double the price of an asphalt roof.  It used to be a much higher multiple. 

[minnesotapaintlady]

Aug 16, 2021 12:54:49 GMT -5 haapai said:

I can't answer your other questions but if you are waiting for contractors to become available and the price of asphalt shingles to drop, you have time to get a quote for a metal roof. 

My brother is opting for a metal roof on a cottage that he's not sure that he wants to hold onto.  The price has dropped dramatically in many places.   I wasn't listening too closely, but I think that it is less than double the price of an asphalt roof.  It used to be a much higher multiple. 

Double is still a lot.  I'd rather pay a couple thousand out of pocket to get another 40 year shingle roof.  It seems every 10-15 years I get a new one for hail anyhow.

[Tiny]

It might have something to do with what I guess is rampant insurance fraud?   

In theory, the insurance company wants you (generic you)  to have a brand new working roof to help "protect" the asset (your house and stuff in your house) that they are insuring.     If they just give you a check and hope you go and get the roof replaced and spend all the money from the check on the roof  - that kind of sounds like not a good business model (hence the rampant insurance fraud??) 
  
I'm guessing the insurance company wants to make sure that a new roof is installed and that they do not "overspend" on said new roof.   

I can totally see people getting the $$ for a new roof - and then either not bothering to replace the roof (and having Uncle Fester go up and spread some tar over the shingles to stop any leaks)  or  paying as little as possible for a new roof and pocketing the overage.  


I have to admit I don't quite understand why insurance would pay for a hail damaged roof that's still working...  isn't it on the homeowner to maintain their roof?      I can see if the hail damaged the roof and a leak immediately started.    I can see prorating the $$ the insurance might pay for hail damage roof replacement - if your current roof is 5 years old - you get a bigger payout (you only got 5 years out of cost of the roof) if your roof is 22 years old (and it's expected your roof would last 25 years - then you get less of a payout).      

Not sure if that would actually work or not...    This is kind of a touchy subject for me - cause I have relatives who have used insurance to replace siding that was 30 years old and a 25 year old roof due to "hail damage".     The siding looked fine and the roof was nearing the end of it's life but wasn't leaking even though it sustained "hail damage".    There was much gloating on sticking it to the man!   When all they did was drive up insurance costs for themselves and everyone else.   OK.  It was the gloating that makes it a touchy subject.  And I know no one here is gloating.  But I can recall my relatives gloating... and it pushes a button. 
 

[susana1954]

I have had 2 insurance claims.  Alfa always makes out the check to both the mortgage holder (Chase) and me.  I don't have a Chase account, and there are no branches of Chase in Alabama so I have had to mail the check to them for their signature and then get the check back.

The first claim was only $5k so that was that.  This last one was about $14k.  The check was for $10k, and the insurance company was holding back $2k, which they call "depreciation," until the work was completed.  It wasn't really depreciation, though, since I had replacement coverage.  The final $2k was my deductible.

I think $10k was the maximum was that Chase would simply sign over.  Anything higher would have had additional paperwork including a release of lien by the contractor.  It might have been a little higher, though.  The check was under so they would return it to me, signed, and let me handle the repair.

When the work was completed, the contractor provided a certificate of completion and I got my additional $2k returned.

I bet Chase would have done the same thing as your CU if I had exceeded their limit on the first check.

ETA:  You asked how long you had to repair it, and only your insurance company really knows the answer to that.  However, my son's roof was storm damaged.  For some reason, the insurance company was only willing to replace half the roof.  You don't replace half a roof so they put the money into savings until he got his bonus in the spring.  Then they planned to replace the entire roof.

The insurance company did a drive-by, saw the roof had not been replaced, and cancelled their insurance upon renewal.  I have no idea of the time gap, but it isn't simply that  you won't get that final $5k back if you don't do it in a timely fashion.  Call them and ask them maybe?

[minnesotapaintlady]

Aug 16, 2021 16:54:56 GMT -5 Tiny said:

I have to admit I don't quite understand why insurance would pay for a hail damaged roof that's still working...  isn't it on the homeowner to maintain their roof?      I can see if the hail damaged the roof and a leak immediately started.    I can see prorating the $$ the insurance might pay for hail damage roof replacement - if your current roof is 5 years old - you get a bigger payout (you only got 5 years out of cost of the roof) if your roof is 22 years old (and it's expected your roof would last 25 years - then you get less of a payout).      

It's no different than making a hail claim on a car.  It still works, but it's lost value due to an "act of God", not a lack of maintenance.  They do depreciate the value for age.  Mine they knocked down 5K because it was 10 years old (40 year shingles), but I have replacement value coverage on my homeowners so they will pay that out once it's fixed.  Without replacement value rider a 22 year old roof with 25 year shingles would probably not be worth making a claim on. 

[minnesotapaintlady]

Aug 16, 2021 17:18:55 GMT -5 susana1954 said:

ETA:  You asked how long you had to repair it, and only your insurance company really knows the answer to that.  However, my son's roof was storm damaged.  For some reason, the insurance company was only willing to replace half the roof.  You don't replace half a roof so they put the money into savings until he got his bonus in the spring.  Then they planned to replace the entire roof.

The insurance company did a drive-by, saw the roof had not been replaced, and cancelled their insurance upon renewal.  I have no idea of the time gap, but it isn't simply that  you won't get that final $5k back if you don't do it in a timely fashion.  Call them and ask them maybe?

I'll send an email to someone tomorrow.  I know back in 2010 when the last big hailstorm went through here they paid out on the barn and I chose to not fix it and just kept the money, but maybe the bank doesn't care about my barn.  But also that time, I went to the contractor first instead of insurance and he handled everything. I did nothing with insurance or the bank. 

[Deleted]

When I had storm damage to my roof, my insurance company made the check out to me and my mortgage company. I really want to say the contractor also, but I don’t want to lie.

Fortunately BOA had my mortgage at the time, and I just went into a branch. I didn’t have any issues getting the check endorsed or any funny stuff at my bank when I deposited the check. They might have put a hold on it until it cleared, but I don’t consider that “funny stuff”.

[TheOtherMe]

I can no longer remember what my claim on a house was for but I do know the check was made out to both me and the mortgage holder.

It was probably when lightning hit my house.  I've never replaced a roof or anything that large.  I think on a house, the lightning strike was the worst thing that's ever happened.

[teen persuasion]

Aug 16, 2021 16:54:56 GMT -5 Tiny said:

I have to admit I don't quite understand why insurance would pay for a hail damaged roof that's still working...  isn't it on the homeowner to maintain their roof?      I can see if the hail damaged the roof and a leak immediately started.    I can see prorating the $$ the insurance might pay for hail damage roof replacement - if your current roof is 5 years old - you get a bigger payout (you only got 5 years out of cost of the roof) if your roof is 22 years old (and it's expected your roof would last 25 years - then you get less of a payout).      

Not sure if that would actually work or not...    This is kind of a touchy subject for me - cause I have relatives who have used insurance to replace siding that was 30 years old and a 25 year old roof due to "hail damage".     The siding looked fine and the roof was nearing the end of it's life but wasn't leaking even though it sustained "hail damage".    There was much gloating on sticking it to the man!   When all they did was drive up insurance costs for themselves and everyone else.   OK.  It was the gloating that makes it a touchy subject.  And I know no one here is gloating.  But I can recall my relatives gloating... and it pushes a button. 
 

Yeah, I don't get any of this either.

If the roof is damaged by hail, it needs repair/replacing RN.

What's a 40 year asphalt shingle roof? They only last 20-25 years, max, no matter how long the shingles are rated for.

And $19k for an asphalt shingle roof? Holy cow! We spent $6k-ish a few years ago for a metal roof. Full tear-off, repairs to decking (needs to be smooth for metal), ice/water underlayment, repairs to cornice returns. We've got a big farmhouse, and it included the hip-roof front porch (one storey) as well as the main roofs (2 storey gable front and storey-and-a-half gable end).

Only person I know who's gotten insurance to pay to replace a roof is coworker who had a tree fall thru their roof. We don't get hail that damages roofs, so you have to budget to replace them when the shingles wear out. I think that's why metal has become so ubiquitous - we are all hoping it outlasts shingles.

[minnesotapaintlady]

Not sure what to tell you.  Lots of people get roofs covered for hail damage here.  We had two big storms this summer and there are storm chaser contractor signs in yards all over the place.  The CU teller said she's processed a ton of hail insurance payments this past month.  It's not something that needs to be done right away, even the insurance adjuster said it's doubtful it's just start leaking but it's lost enough of a percent of it's gravely stuff that it's considered a loss. 

I haven't had a contractor out yet.  The 19K is what the adjuster estimated, but I think that's about what it was last time.  I don't get tab shingles, it's too windy up here for them.  They are laminate architectural shingles and the roof is really big.  Like 37 squares or something like that.  

[minnesotapaintlady]

So, I got curious and looked it up because I was confused by people never hearing of insurance covering hailed on roofs.

Hail damage is listed along with wind as the most common homeowners claim in the US but 70% of all hail claims are from 10 states considered "hail alley", which my state is one of. 

www.rmiia.org/downloads/PUBLIC%202018%20-%202020%20Hail%20foreCAST-%20TJM.pdf

[nittanycheme]

A few years ago I had the same thing happen, where I got partial payment for fixes due to hail damage and the rest was to be paid after the work was done.  The insurance company made the first check out to both myself and the bank because it was over a certain amount (I think $4000) where that was their policy.  Of course, it was over by like $30.  It wasn't for the roof, but for shutters, window wraps, fascia, etc. that were all badly dented by the hail.  I had most of the work done - there were a few things I didn't have done like they paid for the satellite TV antenna to be removed and rehung; I didn't have it rehung because it was left over from the last owner and I didn't use it.  So, I ended up essentially forfeiting the rest of the money, mostly because I didn't want to deal with trying to figure it out.  It was only like $750, so not a lot of money compared to the first check, which pretty much covered almost all of work since there was like 3 or 4 items like the satellite dish.  The biggest pain was getting the first check cashed because I had to make sure to go to a branch when the right level of employee was there to co-sign it.

[TheOtherMe]

My friend in Colorado has gotten two new roofs due to hail damage.

Last summer I got lucky that the derecho barely missed me.  Many people are still fighting with insurance companies.

[steph08]

My brother is in Colorado and is getting a new roof and siding because of his damage from a storm this winter.

[bobosensei]

The house I bought got a new roof because of hail damage about 12 years ago.  We regularly get people stuffing cards in mailboxes after storms trying to get business.