Homeowners in Wellington face unique challenges when insuring their properties, especially given the risk of severe weather and storms. One aspect of home insurance that is often overlooked, but can have a major impact on your finances after a roof claim, is the concept of a roof schedule, sometimes referred to as roof depreciation. Understanding how Wellington home insurance companies apply this can help you avoid unexpected out-of-pocket expenses.
What is a roof schedule?
Many homeowners insurance policies provide Replacement Cost Value (RCV) coverage, meaning the insurer pays to repair or replace damaged property with new materials, without deducting for depreciation. However, due to the frequency of roof-related claims in Wellington from storms or strong winds, some insurers offer endorsements that adjust how roofs are covered. This is where a roof schedule comes into play.
A roof schedule, often called a Roof Surfacing Payment Schedule, bases your coverage on the Actual Cash Value (ACV) of your roof. ACV accounts for depreciation, reflecting the roof’s current market value at the time of damage, considering age, wear, and condition. For example, a roof that cost $20,000 to install might have a much lower ACV after 10–15 years.
How roof schedules work
Many insurers provide a roof schedule endorsement to lower your annual premium. By accepting this, you agree that any wind or storm claim will be paid out based on your roof’s depreciated value.
For instance, a shingle roof may depreciate faster than tile or metal roofs due to its shorter lifespan. If a 12-year-old shingle roof, with an expected 20-year lifespan, is damaged in a storm, the insurer calculates its depreciated value, subtracts your deductible, and issues that as the claim payout. This can create a significant gap between the insurance payout and the full cost of replacement.
Lower premiums come with trade-offs
The main advantage of a roof schedule is a lower annual premium. For homeowners with older roofs or those seeking to reduce yearly insurance costs, this can be attractive. Wellington law and common insurance practices allow insurers to offer optional roof deductibles and policies factoring in depreciation, especially for older roofs.
If your roof is 15 years or older, insurers can’t force a replacement to provide or renew coverage. Instead, a roof inspection ensures it still has at least five years of useful life. This has made ACV-based policies more common, where payouts reflect the roof’s current value rather than the cost of a brand-new roof.
However, you should weigh these savings against potential out-of-pocket costs if a major roof claim occurs. While premiums are lower, a significant storm could leave you responsible for thousands of dollars to cover the difference between depreciated value and full replacement cost.
Get the best Wellington home insurance quotes
Choosing between lower premiums or higher payouts can be tricky. At Home Insurance Wellington, we help local homeowners compare policies from multiple insurers and clearly explain details like roof schedules and their implications. We’ll ensure you have coverage that fits your needs and budget, so you’re prepared no matter the weather.
Protect your Wellington home today
Contact Home Insurance Wellington to explore the best home insurance quotes and safeguard your home against unforeseen risks.
About Home Insurance Wellington
At Home Insurance Wellington, we specialize in helping Wellington residents protect their homes cost-effectively all year round. With personalized advice and tailored coverage options, our experienced agents find the best insurance solutions for every homeowner. Reach out today to get started.
