Climate Change Could Quickly Turn Your Old Roof Into a Home Insurance Headache

Get a Free Quote

Climate change is cutting roof life

The lifespan of the average roof today isn’t what it used to be, and insurance experts say the evolving climate is a leading reason.

“Climate change has altered weather patterns and not only has it increased storm risk [and] coastal flooding risk, it’s also made weather patterns more volatile and less predictable,” says Cathy Seifert, an insurance analyst at CFRA Research.

As a rule of thumb, asphalt shingle roofs (the most common kind throughout the U.S.) were traditionally expected to last about 20-25 years. But today, roofs may age out – and become vulnerable to damage – in less time. Apart from more frequent and powerful storms, everyday exposure to extreme weather can shorten a roof’s useful life.

In Florida, for example, the estimated life expectancy of asphalt shingle roofs is between 10 and 12 years, as compared with 20 years elsewhere, a S&P Global Market Intelligence report says.

The problem doesn’t end with Florida, or even with other states with a history of destructive storms. “You have storms or tornadoes in regions that historically haven’t had them,” Seifert says. And that, she said, has created “a problematic pattern” for insurers in managing risk – including greater caution about renewing policies.

Get a Free Quote

Inflation is driving up costs

To make matters worse, fixing and replacing roofs has become much more expensive.

“The price of roofing materials as well as the labor to repair or replace a roof have both gone up very substantially over the past year,” says Robert Hartwig, clinical associate professor of finance and director of the Risk and Uncertainty Management Center at the University of South Carolina.

Those ubiquitous asphalt shingles, for example, are derived from petroleum — and the rise in the price of oil has had a direct effect on how much it costs to manufacture them.

“Given current market conditions, it’s sort of coming to the fore,” Seifert says. “It’s not surprising insurance companies are…taking a harder look at the health of the structures they’re insuring.”

And then there’s the problem of fraud in Florida, where roof repairs and replacement have become magnets for dishonest contractors. Legislative loopholes make it easier in that state for the unscrupulous to inflate damage claims, and exploit the legal process to effectively strong-arm insurers into paying those puffed-up bills.

As a result, Florida recently passed legislation aimed at curbing the fraudulent activities of the worst offenders, and insurers there are taking their own steps. Progressive, for instance, submitted to insurance regulators in Florida a proposal on behalf of two of its subsidiaries — ASI Preferred Insurance Corp. and American Strategic Insurance Corp. — to write or renew homeowners’ policies only if the roof of the structure being insured is 15 years or newer. The age parameter would replace a less black-and-white definition that merely stipulates that roofs be in “good condition.”

Get Started

What the changes mean for homeowners

Policy cancellations due to old roofs may or may not spread within Florida and beyond. But climate change and increased costs could result in insurance coverage being clipped before the roof reaches the once-standard life expectancy of 20 to 25 years.

A homeowner with a roof that’s in late middle age — as in more than 15 years old, as a good rule of thumb, but the specifics might vary by insurer and where the house is located — might now find that, upon renewal, their insurer changes their coverage limit from “replacement” to “actual cash value.”

That change means in the event of the roof needing to be repaired or replaced, the full cost of the work may not be covered. Rather, the allowable maximum will be adjusted to reflect the roof’s remaining usable life. As a result, you may need to chip in thousands of dollars more than your deductible in the event that your roof requires replacement after a storm or other extreme weather event.

The upshot: it may now be smart to replace a roof before it reaches its 15th birthday or begins to show its age. The insurer may recommend that you do that, says Hartwig, but it can’t force you to replace a roof it deems too old, or not in great shape. But he warns a company can “at its discretion, non-renew your policy if it feels your roof is old and that you’re declining an opportunity to replace it.”

Money Classic

To celebrate our 50th anniversary, we’ve combed through decades of our print magazines to find hidden gems, fascinating stories and vintage personal finance tips that have withstood the test of time. Dive into the archives with us.

Sign Up

More from Money:

Best Homeowners Insurance Companies of 2021

Why You Should Consider Flood Insurance Even if You Don’t Live in a Flood Zone

Home Insurance Rates Are Rising Due to Climate Change: Here’s How to Lower Your Costs

© Copyright 2021 Ad Practitioners, LLC. All Rights Reserved.
This article originally appeared on Money.com and may contain affiliate links for which Money receives compensation. Opinions expressed in this article are the author’s alone, not those of a third-party entity, and have not been reviewed, approved, or otherwise endorsed. Offers may be subject to change without notice. For more information, read Money’s full disclaimer.