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I received a check from my insurance company to replace my entire roof after a recent storm. However, two different roofing companies came out (prior to the insurance adjuster) and said that in their opinion only two sections of the roof needed to be replaced (the two sections that received damage and had missing shingles). Must I replace the entire roof since the insurance company paid me under that assumption, or am I only required to fix the part of the roof that's damaged? If I don't replace the entire roof, will I still receive the other portion of the insurance payout? Is anything mentioned her insurance fraud? I'm not trying to cheat the system, but it's hard for me to justify fixing the entire roof when only ~25% of it is damaged.

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You have several issues at work.

If in the next few years you have a leak in the roof that causes another insurance claim, they may decide not to cover it because they already paid you to replace the roof, and it is your fault that it wasn't. That might also mean they don't pay you for the stuff that is damaged because of the "new" leak.

If you minimize the claim that may make it less likely that they will drop you in the future, or increase you rate next year. But if you don't return the excess funds they will evaluate you on the larger claim size.

Of course if they are sending the money directly to the repair company they will only pay the bill up to a maximum amount.

Usually the issue has been that the repair company wants to do a larger repair. The dispute resolves around some aspect of the building code. I had a car repair that had to be increased because the roof damage was within x inches of the windshield, so the windshield had to be replaced. The insurance company eventually agreed but it slowed down the process for a couple of days because they wanted to measure it.

It is possible that the insurance company has rules related to the age of the roof and the amount of damage that triggers a total replacement.

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My experience has been that they are expecting all damage to be covered as best as possible. They may withhold the remaining funds until you prove the work was done. Any money leftover is yours as long as they accept your proof. Be careful they don't withhold so much that you aren't able to get a full repair, and try to get paid directly as most repair companies wanted to inflate the costs while letting me know they would handle the transaction. No thanks.

  • The company I'm using, which I highly believe to be reputable, uses a third party to manage the claims with my particular insurance company (Nationwide). Should I be wary? – FreeAsInBeer Aug 21 '14 at 12:47
  • I would ask for a paper trail and would also compare estimates from various companies. But, it also depends on how much time/effort you want to put in. – Paul Bilyen Aug 22 '14 at 0:33
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It's always hard to know the exact policy terms, but as a general rule there are two main contributions to insurance payouts.

The first part covers expenses aimed at restoring the situation to its previous state pre-incident. This may include repair work and materials etcetera.

The second part kicks in when it's not reasonably possible to repair the damage, or at least not in a financially efficient way. In this case, the insurer can decide to pay out the decrease in value. This is in fact very common in car accidents, where the car is a total loss.

In your case, it's quite possible that your roof, even with the two partial repairs is in a worse condition than it was before the storm. For instance, the new shingles may not match the old ones exactly. Thus the value of your home has decreased despite the reasonable repair attempt. And as mhoran_psprep points out, there can be hidden damage as well, which is a lurking liability. If you've accepted the cash payment in lieu of a full repair, you also accept the roof in its new condition.

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