Allstate is the first company to make a major homeowner insurance coverage change. Depreciation in the cost of roof replacement due to storm damage may soon be the norm. Usually when one insurance company makes a major coverage change the rest follow. What this means for consumers is roof maintenance is going be the responsibility of the homeowner once again and not the insurance companies.

Allstate looks to make homeowners pay more for roof repairs

(Crain’s) — Allstate Corp. is rolling out a new approach to homeowners insurance that will no longer cover the full cost of replacing damaged roofs if they’re older than 10 years.

The new product, so far only available in Oklahoma, is dubbed House & Home. It’s the next key step in restoring profitability to home insurance, CEO Thomas Wilson told analysts in a conference call Thursday. The Northbrook-based company plans to gradually apply it nationwide over the next three years.

“People just don’t get their roofs fixed and then a hailstorm comes and we replace a $20,000 roof when we’re getting a thousand bucks from the customer and it’s obviously not a good trade,” Mr. Wilson said, according to a transcript.

In Oklahoma, where the program was launched in October, Allstate will pay only the “actual cash value” of a roof that needs to be replaced if it’s older than 10 years, according to company documents obtained by Crain’s. Effectively, if homeowners need a new roof, they will have to cover the cost above the depreciated value of the roof.

By: Steve Daniels February 02, 2012

Roof Replacement Cost Coverage May Soon Go Away