Insurance carriers are pulling back in Colorado. Premiums are climbing, deductibles are rising, and many carriers are quietly moving homeowners from flat dollar deductibles to percentage based wind and hail deductibles. If you have not read your policy since you bought your home, you may be carrying far less roof coverage than you think.
To help homeowners get ahead of the next hail season, we sat down with Tom Martino, Colorado's leading consumer advocate for the last 45 years and host of the longest running radio troubleshooter show in America. Tom has spent his career helping consumers solve problems, and his advice on insurance policies comes down to three specific things you should check today, before the next storm rolls through.
Colorado consistently ranks among the top states in the country for hail claims, and carriers have responded by tightening coverage across the Front Range. The two biggest shifts homeowners are seeing on renewal are higher deductibles and a move to percentage based wind and hail deductibles, where your out of pocket cost is tied to your home's insured value instead of a fixed dollar amount.
Those changes usually show up in renewal paperwork that most people never read. That is exactly why Tom recommends checking three things on your policy right now.
The first thing Tom says to look for is whether your roof is covered at actual cash value (ACV) or full replacement cost.
With an ACV policy, the insurance company takes the new price of your roof and depreciates it every year as it ages. A roof that would cost $25,000 to replace new might only be valued at a fraction of that after 15 or 20 years of depreciation. As Tom puts it, pretty soon you may have very little coverage at all.
If you can afford it, get full replacement coverage. Replacement cost coverage pays what it actually costs to replace your roof with a new one, without subtracting years of depreciation from your payout. The premium difference is usually small compared to the tens of thousands of dollars in coverage you gain when a major hailstorm hits.
Your deductible is the money you have to come up with out of your own pocket before insurance pays anything. Tom's warning here is direct: avoid percentage based wind and hail deductibles.
Here is why. A 2% or 3% deductible sounds small, but it is a percentage of your home's insured value, not your claim. On a home insured for $700,000, a 3% deductible means $21,000 out of pocket before your insurance pays a cent toward your roof.
Instead, Tom recommends choosing a defined dollar deductible you can actually plan around, something like $2,000, $5,000, or $10,000. You know exactly what you are responsible for, and it does not balloon as home values rise.
Tom's personal approach combines two moves. First, install a nearly hail proof roof, such as Class 4 impact resistant shingles, stone coated steel, or metal. Second, take a higher defined deductible to keep your premium down. A roof that shrugs off most hailstorms means you rarely file a claim, and the premium savings from the higher deductible stay in your pocket year after year.
The third item on Tom's checklist is one most homeowners have never heard of: supplemental loss coverage.
If you end up with a policy that carries a high deductible, supplemental loss coverage is a separate coverage that protects you against wind and hail and covers that high deductible. If a storm hits your area and the event is verified, they write you a check for the deductible amount you would otherwise owe out of pocket.
Paired with Tom's strategy above, this coverage closes the gap. You get the lower premiums of a high deductible without the risk of a five figure surprise bill after a storm. Ask your insurance agent whether supplemental loss coverage or a similar deductible buy back option is available on your policy.
ACV (actual cash value) coverage pays the depreciated value of your roof, which drops every year as the roof ages. Replacement cost coverage pays what it actually costs to replace your roof with a new one. For an older roof, the difference can be tens of thousands of dollars.
A percentage deductible is calculated from your home's insured value, not your claim size. As Colorado home values have risen, a 2% or 3% deductible can easily reach $15,000 to $20,000 or more out of pocket, and it keeps growing as your insured value grows.
Tom recommends a defined dollar deductible you can realistically cover, such as $2,000, $5,000, or $10,000. If you choose a higher deductible to lower your premium, pair it with an impact resistant roof and ask about supplemental loss coverage to protect against the deductible itself.
Supplemental loss coverage is an additional coverage that pays your wind and hail deductible after a verified storm in your area. It is designed for homeowners carrying high deductibles, and it turns a large out of pocket surprise into a covered expense.
Many Colorado carriers offer premium discounts for Class 4 impact resistant roofing materials. More importantly, a hail resistant roof means fewer claims, which protects you from the rate increases and non renewals that often follow storm claims.
Before the next storm season, pull out your policy and check three things: make sure you have replacement cost coverage instead of ACV, replace any percentage based deductible with a defined dollar amount you can afford, and ask your agent about supplemental loss coverage if you carry a high deductible.
And if you are not sure what condition your roof is in, start there. Excel Roofing has served Colorado and Wyoming homeowners since 1993, and a free inspection tells you exactly where your roof stands before you ever need to file a claim. We never ask for money up front, and You Don't Pay A Cent Until You're Content.
Schedule your free roof inspection at excelroofing.com, or call the office nearest you in Englewood, Colorado Springs, Sheridan, or Casper.
Have a consumer problem beyond your roof? Tom Martino takes calls 24/7 at 303-627-8466 (303-MARTINO). Calls go to the show live on air, or leave a voicemail and his team will call you back.