It has been a long winter with lots of rough weather.
Central Ohio residents will need to get used to the term betterment and the roof will be one key location. (photo by Robert Linder / sxc)
With rough weather comes damage, which leads to insurance claims. In a recent discussion with State Farm agent Bill Alsnauer during the Make Your Home Work For You series it became evident that Delaware, Ohio, – and rest of Central Ohio – residents need to become familiar with the term “betterment”.
Betterment is “an improvement of property other than by mere repairs” according to Dictionary.com.
In the world of insurance, it is simply replacing what was damaged as opposed to giving the home owner an improved item.
The most common spot you’ll see betterment — the roof of your home after a wind storm. We all see the ads “we’ll get you a new roof for free!”
Well that’s how the roofing companies have made a nice dime by getting insurance companies to replace those roofs that were damaged by the wind or ice storms we’ve experienced over the past several years. The claim was submitted to your insurance company and a brand new roof was put on free of charge. If the damaged roof wasn’t brand new and 100 percent ruined — that’s betterment.
And, home owners will soon find this hitting them square in the pocket book.
Let’s use that roof example as we give an idea of how this will affect your pocket book.
- Contractor’s estimate for a new roof: $8,000
- Insurance Company’s estimate of amount of roof damaged: 20%
- Years that the 30-year shingles have been on the roof: 10
In the good old days, the home owner would have the roof replaced and the insurance company would cut a check to the contractor for $8,000.
In the new system, the insurance company would only pay for the amount that was damaged and then adjust it based upon the usage you’ve enjoyed with the old roof. Hence the check would only be $1,072. The $8,000 would be reduced to the 20% that was damaged and then the insurance company would ony cover the remaining 20-years remaining on the life of the shingles.
The crack down on betterment will help those that have not submitted a claim in that it will help keep insurance rates lower as the insurance company only pays for what was covered. But for those damaged, it could be a shock.
