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I'm uncertain about what to do: fix the roof or pocket the money and fix it the next time. The facts:
1. New insurance company eff 6/11, this claim is with old company for 6/4 hailstorm - I changed because I moved my entire portfolio to a local agent who also writes umbrella liability (old agent didn't carry product) for LL's
2. New roof (10 months old) on this SFH rental property
3. Plan to sell property in 2-3 years.
4. Risk of another hailstorm -- reality in my area
5. Insurance adjuster wrote me a check to replace the whole roof ($4400), roofer says damage so minimal he recommends we don't replace it. Adjuster also said it was minimal damage but since it was a brand new roof he was going to total it so it would be in same condition as before.
Sooooo - What would you do? Replace the roof or just wait until I go to sell the property and do it then if it becomes an issue. By not replacing the roof, I risk other damage and refusal by the new company to deal with the roof because I'm sure there has to be a record of this claim settlement.....
I think you have laid out the options pretty well, but you still need some details to guide your decision.
#1 What are the odds of more storms in your area? I know that some places are prone to damage. If you are in such a location I would SET ASIDE repairs until RIGHT BEFORE I was going to sell.
#2 How visible / risky is the damage? If there is no way that folks who rent won't notice the rent / risk having leaks YOU GOTTA at least repair those trouble spots!
#3 Value as a percentage of total cost / profit. Since this is an investment property I always would weigh value of repairs / upgrades as a function of WHAT I CAN GET BACK, my hunch is that $4400 for a roof is probably gonna be money well spent UNLESS you are looking at a loss on this property...
I don't need this money and it makes sense to just hold it until I sell the property and its inspected and when/if inspector says new roof is needed do it then. It looks fine from the street and roofer says no worries about performance of the roof. A concern is what the repercussions with the new insurance company if I don't replace the roof after receiving a settlement check?
By not replacing the roof, I risk other damage and refusal by the new company to deal with the roof because I'm sure there has to be a record of this claim settlement.....
You'd really ask another insurance company to pay for a repair that another company has already paid you for? Isn't that fraud?
I realize you say you risk "other damage" but, honestly, are you going to have the new company assess the (future)damage and then deduct from their settlement offering the $4400 you've already been paid?
Is there a mortgage on this property? If so, the check will be payable to you and the bank. Bank will not endorse unless repairs are done. At least that's what has always happened to me.
Is there a mortgage on this property? If so, the check will be payable to you and the bank. Bank will not endorse unless repairs are done. At least that's what has always happened to me.
You'd really ask another insurance company to pay for a repair that another company has already paid you for? Isn't that fraud?
I realize you say you risk "other damage" but, honestly, are you going to have the new company assess the (future)damage and then deduct from their settlement offering the $4400 you've already been paid?
I have no intention of defrauding anyone. My concern is constant replacement of a roof and absolutely I would contribute the amount received towards future damage. If I replace this roof now, likely I'll need to keep doing it. But if I don't and the next time there's a hail storm will the roof prices go up and this money I have set aside won't cover the cost but the insurance company won't pay the claim b/c I didn't replace the roof?
But if I don't and the next time there's a hail storm will the roof prices go up and this money I have set aside won't cover the cost but the insurance company won't pay the claim b/c I didn't replace the roof?
As far as I know, there'd be no way for them to know. If there's hail damage, unless there's obvious old wood showing or something, it'll all look the same.
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