Roofs. They are part of the foundation of your home and help protect you from the natural elements.
The average roof is designed to last for about 30 years.
With that in mind, people are likely going to value a brand new roof over an old roof. Cars and other types of physical assets go through something called depreciation.
Some questions you may be asking include:
- Is there such a thing as roof depreciation?
- If there is such a thing, how is roof value impacted?
- What are the biggest factors to roof depreciation?
This guide will answer those questions and more.
What Is Roof Depreciation?
Before we can go over the main factors of roof depreciation, we need to make sure that you understand what this is. Essentially, roof depreciation is how much value the roof has lost since it was installed.
An example could be that a roof was worth $10,000 when you first installed it on top of your home. However, 20 years later, your roof may have seen better days. In this scenario, your roof may be worth half of the money that it used to be worth.
Roof depreciation mainly comes into play when you are trying to file an insurance claim. That is because you are trying to get money to repair the damages that occurred to your home under your homeowner’s insurance policy.
A common homeowner’s insurance policy would cover about $250,000 worth of damages. If your house is hit by a natural disaster such as a hurricane or a tornado, you may need every bit of that money to repair the damages.
You are going to need to prepare for this if you ever do want to file a claim on your homeowner’s insurance. There are a few main factors when it comes to roof depreciation. Let’s take a look at some of them.
Age of Your Roof
An aging roof may be the biggest factor as to whether or not you will get the full value of your roof in a claim. You have to expect that an insurance company will not value your roof for the same amount as when it was first installed.
When it was brand new, it was likely worth the full price of the roof. However, things change as the years go on.
As discussed above, the average roof is expected to last 30 years.
Let’s say that your roof was 25 years old when your house was damaged. Now, your roof has major damage and you may need to replace it entirely.
One thing your insurance company could argue is that your roof was almost at the end of its lifespan. As a result, you should not expect to get a check that will cover the costs of a brand new roof. If your roof was worth $10,000 when you installed it, you may be lucky to get $2,000 in this situation.
Consider the age of your roof when you are trying to determine your roof depreciation. If it is a couple of decades old, expect the depreciation to be significant.
Wear and Tear
Another thing to consider is how much wear and tear your roof has already had. This may be difficult to determine if your entire house is in pieces because of a natural disaster.
However, let’s say that your house is intact in this scenario. You will want to consider your roof history here.
Are there any recordings of major repairs for your roof? Were there any shingles replaced? How about leaks or holes that were addressed?
These are things that you need to keep in mind because if your insurance company finds out about these things, roof depreciation will once again come into play.
Think of this like a used car. Used cars that go up for sale tend to get rated as being in either excellent, good, fair, or poor condition. That usually gets determined by possible damage under the hood, cosmetic damage to the exterior, what type of mileage is on the car, etc.
The point here is that you need to think of things like this that can apply to your roof. So, any existing damage or parts that had to be replaced will go into this picture.
The last thing you have to consider is what type of materials were made to build your original roof. This can be a problem if you have an older house.
For example, let’s say that you own a house that was built a century ago. It is doubtful that the same materials and the same building style were used back then compared to now.
As a result, it may cost more money to replace those materials. Or, it could end up costing more money because you may just have to build a brand new roof.
This can severely impact depreciation because of the costs involved with this and the difficulty of replacing some older items. Keep this in mind if you have a house and/or roof that is very old.
Factor in Roof Depreciation
If you are trying to see how much of an insurance claim you can get for your roof, you need to factor in roof depreciation. This comes into play with things such as the age of your roof, the wear and tear that your roof had, along with any outdated materials or building styles used to construct your roof.
Then, you should have an idea of what your roof’s current value is.
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