Q & A
We have created some commonly asked questions about hail and storm damage so that you can know what to expect when dealing with insurance and getting your home repaired.
What is depreciation, Actual Cash Value (ACV), and Replacement Cost Value (RCV)?
Actual Cash Value (ACV) is the depreciated value of a damaged item, the depreciation is calculated based on the age and expected lifespan of the item.
Depreciation is the amount of money the insurance company devalues your damaged item based on its age, with RCV coverage you would receive this amount once the item is repaired and a receipt or invoice is sent to insurance.
Replacement Cost Value (RCV) this is the total amount is costs to replace the damaged item. The ACV + Depreciation equals the RCV amount.
Example, if you have a $30,000 roof, and a $1000 deductible. You have a 30 year rated shingle on your home, it is currently 10 years old. Based on age, your roof would be depreciated by 33% ($10,000). This means the ACV value would be $20,000. After subtracting your deductible insurance would send you your first check in the amount of $19,000. Insurance pays for the rest.
The insurance estimate seems low, what if the Summit estimate is higher?
We will work directly with your insurance company and come to an agreement on the scope and price of your project. Often times there are items that insurance companies will not add into their estimate until work is complete. Many times they require photos of completion and code documents that verify what additional items were needed and why. This is commonly called a post build supplement. If an insurance scope is way out of line we will typically do a prebuild supplement, but may still require a post build supplement. For extremely complex claims we may send over 3-5 supplements at different times while building the project in stages.
How is the estimating and pricing set?
Most insurance companies and contractors in the exterior industry use a program called Xactimate to write estimate. Xactimate automatically calculates current market value pricing and it updates by zip code each month. This means that we all have the same pricing per unit, or square foot etc.. the differences in what you see as a total price are typically actually differences in job scope usually related to code requirements, quantities, additional components & accessories or sometimes material grade. If all of the exact same line items were contained in an estimate written by multiple insurance companies or different contractors the end price would be exactly the same.
How does payment work?
Your insurance company will send all funds to you. Your insurance checks will likely have your mortgage company’s name on them. The funds are typically distributed in multiple payments, the first payment is the ACV value of all damaged items on your claim, and the final payment is the depreciation that was withheld until repairs were complete. You will only receive depreciation for an item that is completed, and if an item was not completed you are typically not entitled to receiving the depreciation from your insurance company on that item.
My mortgage companies name is on the insurance check, what do I do?
You will need to contact the “property loss” or “loss draft” department at your mortgage company to have them endorse your insurance checks if their name is on them as well. If your company is local you can stop into their office as well. They may have some paperwork that you will need to have us fill out and well as some other documentation for us to provide. Your mortgage company may also perform an inspection to verify that work was completed before disbursing final funds. Summit Construction will not speak to or deal with your mortgage company directly as it would require is retaining personal account information that we do not wish to retain.
How does the deductible work?
The deductible is deducted from the amount of money your insurance company sends. If you have a project that is approved for $50,000, and you have a $1000 deductible, this means insurance would send you up to $49,000 and you would pay the remaining $1000 to your contractor.
Can you waive a deductible?
Please know – We do not and cannot (pursuant to Minnesota State Law) discount, rebate, or waive any portion of your deductible. This is against the law and we will not participate in bad practice or illegal activity. We need to be here for our clients in the future, and we do not cut corners. If you hear of a contractor that is waiving deductibles we advise you to absolutely stay away from that company. You would not want to deal with the ramifications of your insurance company finding out and it is very likely that contractor will not be around in a few years.
What are stormchasers?
Stormchasers are either companies that come in from out of state or contractors that become roofers as well as exterior contractors as soon as a storm hits. Often times they have a temporary office set up, they come in, build jobs, and leave a few months later. Usually their quality lacks which often leads to jobs that get butchered and the homeowner ends up holding the bag. Make sure your contractor has a portfolio of jobs in Minnesota and has real reviews online.
Do you give references?
We do not give out phone numbers of our past clients, in fact we do not even ask them if we can although some people offer to provide reference we do not keep a running list of clients that would be willing to discuss over the phone, we retain the belief that most clients wish not to be bothered and working on a lot of high end homes most of our clients are very busy and very private people. We take the position that past clients may find it a hassle and bothersome to provide reference over the phone. We do however have many online reviews and provide addresses of past jobs in the case that a prospective client would wish to drive by. Our certifications and portfolio is used to verify our credibility.
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