Hail damage is costly to repair and quite bothersome for not only the single-family homeowners but even more so for the owners of multifamily residential.
According to RMIIA “during the past five years, claims related to wind and hail damage on a national basis accounted for almost 40 percent of all insured losses, averaging approximately $15 billion annually; and growing each year.” Meaning, it’s no joke. A majority of these $15 billion-dollar claims are being made by multifamily properties. For these reasons and more, mastering hail damage insurance claims is of the utmost importance.
First, let’s let the cat out of the bag and admit that these hail storms happen mainly in Texas and Colorado. Both states have proven successful for investors in the multifamily market. But, both states are also ranking at the top of the charts for the most hail damage related insurance claims. Based on a national study, between 2013-2015 there were 394,572 hail claims in Texas and 182,591 hail claims in Colorado (RMIIA). It’s easy to say that the multifamily platform in Texas and Colorado have been hit hard with managing these claims. So, let’s get to the master plan. It’s quite simple. Take before and after pictures, keep records, avoid the top five reasons roofs fail, especially in Texas and Colorado, and be prepared for either repair or replacement.
This should start at the beginning stages of purchasing. When preparing for the purchase of a multifamily property, it’s already an obvious must to have the roofs checked. And the process has become a lot easier with the updates in technology. At this due diligence, stage makes sure your contractors use a company like Eagle View http://www.eagleview.com/ they do it for you.
What’s key is keeping the original visuals and reports you get from the due diligence report. Also, request and keep the records taken by the insurance company too. Mark your pictures with the locations to match what the insurance company comes up with. If there are any discrepancies, call them out to avoid potential issues in the future. Then have the pictures and reports done again after a roof repair or replacement. When the hail hits, having easy access to before and after pictures is a huge step closer to getting the claims approved.
Avoiding the Top Five Reasons Why Roofs Fail
Insurance companies are looking for any plausible reason for roof damage, other than the hail itself. If they can prove that the damage was not hailed, then your claim is denied.
General Wear and Tear
The first reason for failed roofs is general wear and tear. If the damage is determined to be from aging, wear, and tear, or poor condition of your roof, it will typically be considered normal maintenance, and will not be covered under your policy. A copy of the up to date insurance policy should be kept handy by the management company to make sure all bases are covered.
It could be a golf ball; it could be a shady person attempting to mimic hail damage by slamming their hammer into the roof, maybe a disgruntled employee or tenant. You cannot fully avoid this but keeping your roofs checked and records kept can keep you on top of any mischief.
The management companies should be held responsible for follow up on the reports of any animal activity. When tenants, maintenance, or contractors claim activity, it should be followed up with by creating a properly documented report of findings and pictures. Animals most likely to cause the roof damage are raccoons and squirrels, but that doesn’t mean that mice, bats, birds, possums, or mice are not the causing factor.
This should be reported at the time of purchase. If missed, complete replacement is most likely the best solution, and although expensive, it will avoid further issues down the road.
The roofing types that are known for their longer lifespan are not superpower roofs, because they are still subject to hail damage. For that reason, the more popular roofs, especially in Texas and Colorado, have shorter lifespans. Overall, cheaper, shorter lifespan roofs are more popular nationwide because those longer-lasting roofs are also more difficult to repair. There is a serious lack of inventory in the roofing market for the longer-lasting types. No matter what the type, age will eventually catch up. The only way to avoid a roof fail per age is to use a reliable contractor to repair if plausible as you go then eventually replace when the time is up.
Repair or Replacement
There are a lot of factors that go into a hail damage claims. Meaning, it’s not always easy to decide if it’s best to go with repair or replacement. Yes, the repair is cheaper, but in the long haul may end up costing more.
- Will you be able to find a contractor to repair? Many contractors specialize in repairs, but frequently, it is difficult to find one to do it. Product availability can become an issue.
- Feasibility. Can it be repaired?
- Codes. If you get it repaired, will it be under the code? Dustin gave a hypothetical “Covered hail damage requires a roof replacement. During replacement, engineer retained by the insured identifies code deficiencies in undamaged firewall assembly and contends that roof repair cannot be completed without addressing. Is there coverage under ordinance or law provision to replace firewall assembly?