So You Need a New Roof! Will Your Home Insurer Pay for It?

Any property owner knows that a roof provides vital protection for a home. The roof keeps the house safe from the elements, preventing leaks that can damage the home's interior and cause mold growth. 

Roofs are also expensive. According to This Old House, typical costs for a roof range from $8,500 to $14,300, with some roofs costing much more. Homeowners faced with these high bills may be wondering whether homeowners insurance covers the cost of a new roof. 

Unfortunately, the answer is more complicated than it seems because home insurance might pay but won't in all circumstances. Here's what homeowners need to know about whether their insurer will pay for a roof or whether the money will need to come out of their bank accounts. 

Here's when home insurance will cover a roof

Homeowners insurance will cover the cost of a roof replacement or roof repairs only if the repairs or replacements are made necessary due to a covered cause. For example, a policy would typically pay for a new roof if it was necessary as a result of:

• Fire
• Wind damage
• Hail

Homeowners should check their policy to find out if their policy is an open peril or a named peril policy. If it is an open peril policy, it would cover roof replacement if a new roof was needed due to any unexpected disaster or event that was not specifically excluded. If it is a named peril policy, the insurer would pay for a new roof only if it happened due to one of the listed disasters in the policy contract.

Those who don't want to spend a lot of time reading the fine print of an insurance policy can also call their insurance agent or homeowners insurance company to find out when and if a new roof might be covered under specific circumstances. 

Insurance will never cover a roof that simply gets old and wears out, though, nor will an insurer cover issues with a roof that happen because of neglect. If a roof is 30 years old and simply develops a leak, that's not something an insurer would cover -- it's something the homeowner would need to pay for out of their repair funds. 

Here's what to do if your insurance doesn't cover you

It can be a financial burden to pay for a roof when insurance doesn't cover it. But homeowners can and should plan for this, because pretty much all roofs need to be replaced eventually. Most last at least 15 years, although it can depend on the roofing material. 

It's a good idea to save about 1% of the value of the home in a dedicated account each year for repairs. While this money won't be needed every year, when a big-ticket item like a roof needs to be replaced, the regular savings you've amassed over time should help ensure there's money available.

For homeowners who don't have money in a savings account but who need a new roof quickly, the new roof may need to be financed. This can be done in a few ways. Specifically, a personal loan or a home equity loan or line of credit (HELOC) are both options for paying for a new roof.

• Personal loans tend to be faster and easier to get and don't require as much paperwork, but the interest isn't tax deductible and the rate may be higher. 
• Home equity loans or lines of credit require you to have equity and likely jump through hoops such as getting an appraisal and paying closing costs -- but interest might be deductible and the rate may be lower. 

You don't want to wait to repair or replace a roof, so start looking into insurance coverage or other alternatives as soon as you begin to notice problems with the roof.