Insurers shifted roof-replacement costs onto homeowners thanks to a new federal rule — just in time for hail and hurricane season After softball-sized hail was reported in Colorado this week, thousands of homeowners will be assessing their homes and cars for damage.
Those who find extensive damage to their roofs might be stuck between two options: filing an insurance claim, which could trigger a premium increase, or coughing up the cash for the necessary repairs or replacement
Most Read from MarketWatch The concern is valid — the cost of a replacement ranges from $5,000 to more than $30,000, depending on a roof’s size and materials. But even filing a single claim can contribute to a home-insurance premium increase ranging from 7% to 10%, some legal experts estimate, depending on the location and severity. It’s a high-stakes decision for homeowners as the rising cost of insurance is a growing burden, especially for households struggling to pay for groceries and gas, as inflation reached a three-year high in May.
Pricey insurance premiums are also a barrier for aspiring home buyers, who must also consider elevated home prices, mortgage rates above 6%, and increasing property taxes when budgeting the cost of homeownership. For existing homeowners who experience roof damage this hail and hurricane season, insurance experts recommend investigating the actual scope of the damage and weighing the potential payout against their deductible and the long-term impact on their insurance history before filing a claim. It’s also important to note that Fannie Mae FNMA and Freddie Mac FMCCG no longer require home-insurance policies to cover the full replacement cost of a roof.