Recently I came across a problem finding property insurance after my current home insurance carrier dropped my coverage. I knew my roof was only 15 years old (with a 25 yr shingle) and in pretty good shape (as told to me by a roofer), and did not have any leaks that I was aware of so I started looking for new insurance and uncovered a huge problem. It took me over 3 months to find a carrier that would cover my home (much higher in cost as well), all the while I had never filed an insurance claim in my entire life, and having once been an insurance agent for a couple of years I knew that was usually the main reason you can’t get coverage. So I asked a trusted local insurance broker (Rhett Roe of Roe & Associates) I have used for many years personally and someone refer to my clients, to explain this phenomenon to me. What I come to learn was not only scary it was downright wrong.
Apparently, The age of your roof has become a greater critical component of your ability to acquire preferred home insurance coverage from companies willing to offer you preferred rates. The main reason is roofing insurance fraud. Often in the great state of Florida, however, the problem exists throughout not only the United States but mostly in the coastal states of the most hurricane-prone regions of the Southeast: Florida, Georgia, South Carolina, North Carolina, Louisana, Alabama, Eastern Texas, & Mississippi. Roofers for the last ten years or more have been found going through neighborhoods (older ones primarily) and telling people they can get a new roof – unscrupulously- by claiming they have hail damage. Even if they do not. The roofer who solicits neighborhoods is trying to get business by lying, and writing a letter that the roof has damage, the homeowner submits it to their provider, and the roofer gets a job. The problem is, that insurance companies have re-roofed one neighborhood after another, and finally caught on. An article by ABC Florida station WFTS in Tampa writes, Michelle Mosher, agent, and owner of Southshore Insurance Professionals, tells us that she’s seen new stipulations since July 1.“Now I have a company that will take your roof if it’s over 15 years old, but it has to have a secondary water resistance layer as part of the wind mitigation, and if it doesn’t, it’s not acceptable. So if you didn’t do that 15 years ago, when you got your roof, you can’t go to them as an option. Somebody might have a 15-year-old roof, and they’re being non-renewed. It’s hard to get them a new policy until they get a new roof, but they’ve got 25 days to do that it’s darn near impossible for that to be able to happen,” Mosher explained. “Those who are not getting dropped are seeing rate increases of 80, 90, 112%.”
The problem for homeowners is that most people have a mortgage, and per your lender’s requirements you must have insurance on your house. So if you can not find a company to carry you, the mortgage company would hit you with a forced-placed policy. That is not something you want as it is usually 3 times the cost you’d find in the marketplace.
In South Carolina, Rhett Roe of Charleston SC insurance company goes on to explain, that these carriers are now doing one of three things. (1) They simply pulled out of the market/area. (2) They have raised their rates by 30% to 40% which will be a continued trend into 2023. (3) 75% of the carriers have changed their roof rules/policies to state that they will no longer write a house if the roof is more than 10 years old and 20% have changed their rules to a 15-year threshold with 5% still allowing up to between 19 yrs. – 25 yrs. old. Also, the type of roof can be a problem as well. This was my issue. Although my roof was showing where a previous tropical storm had blown off some shingle tabs, (which had been successfully repaired) the fact that I had a 3 tab shingle also hurt me. If you have an asphalt shingle roof, which the majority of homes do, the insurance providers prefer an architectural style shingle.
My house still had the original 2006 built 3 tab shingle, which was showing some age and despite the fact that it had been looked at and said to be in good shape by a roofing professional mattered not. What was once my current provider dropped me, then 2 other companies canceled the policy after 30 days (after their inspection), and finally, with Rhett’s years of knowledge and access to many providers, he was able to get the 4th company to cover me, based on his suggestion I get a contractor to fill out a form saying my house was built to specific specs. Having an insurance agent with years of experience, like a real estate agent is absolutely crucial in protecting your largest investment.
Mr. Roe, went on to tell me that in the last couple of months his office has had to find and place over 700 client policies for exactly the same reason. “If your roof is over 15 years old, the list of carriers that you now have to choose from has become extremely short and their rates extremely high”.
The carriers that write in the Southeastern “hurricane corridor” states have paid out hundreds of millions if not billions in Florida, Louisiana, and several other states. This in combination with the roof fraud has left these carriers financially decimated, therefore, forcing them into receivership or liquidation by the Department of Insurance. Florida is up to eight carriers that have been placed on an insolvency/bankruptcy list, and South Carolina is now up to five. The carriers forced into receivership or liquidation have all their policies canceled at once, therefore, putting thousands of homeowners on the street in search of new coverage with an insurance market offering much fewer choices and with much tougher rules especially as it pertains to roof age.
What does Rhett suggest going forward?
“A newer roof will be essential to you having success when navigating the home insurance market in search of the best-priced & best coverage option. If you have a roof that is at the tail end of its life expectancy and you are hoping for a storm to create damage in which you can get your insurance company to pay for it, you might consider reassessing your strategy. First, you likely have a large wind deductible. Secondly, this type of claim will continue to be met with more resistance from your carrier than in the past. Thirdly, you might want the improved wind rating that a newer roof will give so that you have a better chance against the next storm. Good real estate agents can also benefit from this info as they can negotiate better purchase contingencies for their buyer or seller if the house in question has an old roof on it”.
Luckily for me, I worked as a site manager for a Charleston SC roofing contractor and wrote property/home insurance during the housing & economic crash of 2008 I have a unique knowledge base to help my real estate clients through this problem. Rhett Roe goes on to say, “during the purchase process unless you have a very skilled & experienced agent, the consumer often times doesn’t know there is an issue with the roof until after the closing. Simply because they come and inspect several weeks after and if they take issue with your roof, they usually give you one option. Which is to replace it if you want to stay with them. It would be ideal for the homeowner to be privy to this information before closing. So having a good agent is key.”