When renewing your insurance premium, it’s common for your insurance agent to offer you any discounts you qualify for. These discounts can range in size from a few dollars to several hundred dollars, depending on the discount. For example, it is well known that a multi-policy discount can save you hundreds of dollars annually when you bundle your auto and homeowner insurance with the same carrier. A lesser known discount is the roof exclusion endorsement. This endorsement could also save hundreds, if not thousands of dollars on your premium. However, it could cost you far more in the long run.
A roof exclusion endorsement could read:
In consideration of no change [or reduction] in premium, it is hereby understood and agreed that this policy does not cover the roof of the dwelling described herein against wind or hail damage, nor shall it cover any direct or indirect interior damage caused by, resulting from, or contributed to by rain, snow, sand or dust entering through the roof and causing damage.
This endorsement will be referenced on your declarations page, and could be found on a copy of your complete policy. If you are unsure if this endorsement is a part of your policy, request a copy of your policy from your insurance company immediately.
If you have a roof exclusion endorsement in your policy like this one, your insurance company would not be required to pay to repair or replace your roof in the event of a wind or hail event. “Wind events” include hurricanes like the ones that caused massive devastation in Texas, Florida, and Puerto Rico recently. It is estimated that Hurricane Harvey alone caused damage to over 200,000 homes in Texas, while Hurricane Irma damaged over 65 percent of the homes in the Florida Keys. Hurricane Maria’s 155mph winds also ripped roofs off homes and businesses in Puerto Rico.
It would seem to be common sense that often a roof is the costliest repair to a home following a storm. Did you know, however, that water or other substances that enter your home through openings in the roof, no matter how small that opening may be, can cause even more damage? These substances can cause serious damage to the inside of a home, from your roof’s decking to the sheetrock in your walls. By excluding your roof from your policy, you may very well be excluding interior damage to your home also. These repairs can cost tens of thousands of dollars, separate and apart from any roof repair you may need. If your policy has a roof exclusion endorsement like the one above, you would be responsible for any repairs to your roof and any interior damage caused by an opening in the roof.
If you own your home outright and decide not to insure your roof, it may be a gamble you’re willing to take. However, if you still have a mortgage on the property, the decision may not be yours to make. Many, if not most mortgage lenders require that you carry complete insurance to the home they are financing, including the roof. Ensuring that your roof is insured could not only protect your home from disaster, but could protect you and your investment against foreclosure for violating your mortgage agreement. If you are considering adding roof exclusion endorsement to your policy, thoroughly read your mortgage agreement. Your insurance agent should also know if the house is subject to a mortgage agreement before they offer you any endorsements.
Although saving a few hundred dollars a year in premiums with a roof exclusion endorsement is very attractive now, it could end up costing you thousands more the long run.