Asphalt shingle roofs cover 75% of the roofs in the US and insurers currently pay for 30% of them. According to the Insurance Information Institute (III), age of the roof is the most important variable in predicting whether an asphalt shingle roof will hold up in high wind natural disasters.
The recent increase in severe convective storms in Ohio and across the Midwest have tested the strength and durability of aging asphalt shingle roofs. Based on III data from the 2020 convective storms, asphalt shingle roofs 10 years or older had a 25% chance of damage from the storms.
With the lifespan of an asphalt single roof ranging from 15 to 30 years and average replacement cost of $12,300 for a 2,000 sq. ft. roof, many policyholders have the expectation that they are getting a new roof replacement regardless of their roof’s age or quality after it is damaged in a storm.
As a result of this activity, insurers are shifting their roofing requirements to tighten underwriting restrictions and making significant changes to policy forms. We know you are well aware of the changes carriers are making to the policies as they are showing up frequently in carrier rate filings and you are being notified of the policy changes during your client renewal meetings.
While some carriers have not made changes regarding roof coverage within their policies yet, several carriers have made changes related to roof age and roof surface material as a rating variable. Carriers are limiting loss settlement for windstorm or hail losses for roofs that are over 10 or 15 years old. For roofs older than 20 years, some carriers are only providing coverage for removal if the roof meets the dwelling maintenance requirements.
We have received several carrier notifications on roof policy changes but would like to gather some additional information on this topic. While we are reviewing ODI rate filings to monitor the roofing policy changes, we would like to learn more from our membership on your experiences as to the changes being made and how you are being notified.
If any of your carrier partners have made changes to their coverage forms, please share them with OIA’s Resource Center Advisor, Jeanie Giesler at jeanie@ohioinsuranceagents.com.
About the Author:
Jeannine Giesler, CISR, CPIA, and past President of the OIA Board of Directors, Foundation for the Advancement of Insurance Professionals, currently serves as Resource Center Advisor for the OIA. The purpose of the Resource Center is to contribute to building a comprehensive library of resource materials for our members. We pride ourselves on being the one-stop shop for all OIA members and work to solve every problem or situation you may come across.
