Insurance checks, mortgage company endorsements, depreciation and deductibles— what does it all mean? If you don’t deal with these things on a daily basis it can be quite complicated. However, if your roof is damaged and you’ll be making an insurance claim to assist with the cost of repair or replacement, it’s important to know these terms and understand the process.

When your insurance approves a new roof they normally issue two separate checks. The first check is for the actual cash value of your roof after the depreciation and deductible amounts have been taken out. This check is usually made out to the homeowners and their mortgage company, and has to be endorsed by both parties. This process can usually be done in a few days, but can sometimes take up to several weeks depending on the location of the mortgage company.

To avoid any delay, it’s important to get the first check taken care of as soon as possible. Once endorsed, you cannot simply sign this check over to your roofing contractor, but must rather deposit it into your own account and have a cashier’s check made out to the contractor.

The second check from your insurance company is for the depreciation amount (you will only receive this if your policy includes recoverable depreciation). This makes up for the difference between the actual cash value of your roof and the cost to replace it, minus the deductible. The deductible is the amount the insurance company expects the homeowners to cover. Thomas Roofing & Restoration can generally cover deductibles up to $1,000.

Let’s say for example that your home’s roof is badly damaged in a tornado and needs to be completely replaced. The cost to replace the roof is $10,000 and you have a $1,000 deductible. Because the roof is 10 years old the insurance company determines the depreciated value to be $8,000. The amount of your first check will be the depreciated value, $8,000, minus your deductible, $1,000, for a total of $7,000.

If your policy includes recoverable depreciation, the second check you receive will be for $2,000 (the replacement cost of $10,000 minus the depreciated value of $8,000).

If all this sounds too complicated, or you have any additional questions, you can always contact Thomas Roofing & Restoration at 501-804-6934. We will be more than happy to assist you with the insurance claims process.