How Roof Age Impacts Commercial Property Insurance Claims

Commercial roofs develop issues over time. Depending on the state of your roof, you could receive significantly less compensation than you expect from an insurance claim.

Today, we’re explaining what you should know about how roof age impacts commercial property insurance claims.

Insurance Doesn’t Cover Aging or Wear & Tear

Why does age matter?

Insurance doesn’t cover wear and tear. It’s not designed to cover expected maintenance or routine issues that occur over time. These are expected parts of owning property.

Instead, insurance is designed to compensate you for sudden, unexpected events – like tornadoes or fires.

Insurers Reduce Payout Based on Depreciation & Degradation Over Time

Even if your business is damaged in a covered event, you could receive less than expected because of the age of your roof.

As your property depreciates and degrades over time, the roof loses its value.

You may have paid $100,000 to install your roof 20 years ago. However, that roof may only be worth around $2,000 today because of wear and tear.

With many commercial policies insurance compensates you for the value of the roof at the time of the loss – not for the original cost of the roof.

Age Increases the Risk of Structural Issues

An old commercial roof is worth less than a new commercial roof, and has an increased risk of structural issues.

As your roof ages, it has an increased risk of structural issues like:

• Leaks and moisture
• Deteriorated, damaged, or defective materials
• Moss, mildew, and mold growth
• Sagging and sloping
• Rotting or decayed areas
• Sealant and flashing issues

One of these issues may not be enough to cause the roof to collapse. As these issues compound over time, however, they significantly reduce the ability of the roof to do its job.

Your roof may look fine. However, all it takes is one storm – like a severe rainstorm, windstorm, or hailstorm – to reveal serious structural issues within your roof.

Your insurer may require an inspection prior to assigning a policy. The inspection may analyze things like sheathing thickness, fastener spacing, and fastener type – all of which can degrade over time and increase the risk of roof failure.

Insurers May Deny Coverage for Older Roofs

Insurance companies may deny coverage because of an older roof. They do this for both residential and commercial clients.

Before covering an old roof, underwriters consider factors like:

• Age of the roof
• Visible and underlying damage to the roof
• Location and local risk factors (like the likelihood of strong winds or hail)
• Roof maintenance schedules

Underwriters consider all of these factors when answering a simple question: can the roof withstand the elements? If not, the insurer may deny coverage for the entire business.

How to Protect Your Commercial Roof

As a business owner, there are steps you can take to reduce the risk of roof-related insurance claim issues over time.

Here are some of the best ways to protect your roof:

Inspect your roof twice per year.
Clean the roof and remove excess debris regularly.
Verify the roof has effective drainage systems. Seal any holes or cracks when necessary.
Consider using drones, infrared scans, and other technology to verify roof integrity.
Maintain thorough documentation of all of the above, including a history of repairs, inspections, maintenance, warranty information, and photos and videos of the roof over time. Any of this documentation could make the difference between a successful or unsuccessful commercial roof damage insurance claim.

Review Your Commercial Policy to Verify Adequate Coverage

Depending on the age of your roof, you may want to adjust coverage:

• Building owners with older roofs, for example, may want to buy a replacement cost value (RCV) policy. Under this policy, your insurer compensates you for the cost of actually replacing your roof – not the current value of the roof.
• Building owners with newer roofs, meanwhile, could save money on premiums with an actual cash value (ACV) policy. These policies compensate you for the value of your roof, minus depreciation.

Consider your budget, aversion to risk, and roof condition to find the best commercial insurance policy for your business’s needs.

Types of Commercial Roofs and How They Impact Coverage and Claims

Different businesses have different roofs, and the type of roof could impact your insurance coverage or claim.

Here’s how common types of commercial roofs can affect insurance policies and claims:

• Flat roofs could lead to water pooling and leaks. Insurers often charge higher premiums to businesses with a flat roof because of this higher risk.
• Pitched or sloped roofs are less prone to water damage because there are fewer places for water to pool, reducing the risk of leaks. Insurers could charge lower premiums for pitched or sloped commercial roofs.
• Metal roofs are expensive to install but more durable. They’re less susceptible to damage in a storm. Some insurers offer discounts to businesses with metal roofs.
• Asphalt shingles are common in homes and businesses. They’re ubiquitous and affordable. Insurers may assess these roofs on a case-by-case basis, as the quality of installation and type of shingles impact durability.

Insurers Are Now Enforcing Stricter Roof Rules

Since 2021, insurance companies have started to implement stricter standards on roofs. These rules can have significant impacts for business owners when acquiring commercial insurance coverage.

If your roof is more than 10 or 15 years old, for example, your insurer may require an inspection before providing coverage. In many cases, insurers don’t even cover commercial roofs older than 20 years. If the carrier does provide coverage on an older roofing system, it will likely have a roofing endorsement that only covers the actual cash value of the roof when a covered loss occurs.

If the inspection finds issues with your roof, then your insurer could deny coverage until those issues are repaired. Some insurers even require homeowners or business owners to completely replace their roof to receive insurance coverage. Others require you to remove trees or make repairs prior to coverage.

Final Takeaways on Commercial Roof Coverage & Claims

If your commercial roof is more than 20 years old, then you could struggle to get a commercial insurance policy.

34% of all commercial insurance claims involve wind and hail damage – and most of this damage occurs to roofs.

Insurers are being stricter about older roofs. They’re increasingly reducing claims, or denying coverage entirely for businesses with older roofs.

Roof damage insurance claims cost insurers billions of dollars per year. If they find a reason to deny coverage – say, because of an aging roof – then they could use it.

If you need assistance, contact a public adjuster for your commercial roof damage insurance claim.

ClaimsMate offers no-cost consultations with public adjusters specializing in roof damage insurance claims.

Stephanie Corona

Stephanie is a property insurance claim expert with over 20 years of experience working as an insurance adjuster, expert witness, appraiser and umpire. She is passionate about sharing her expertise, knowledge, tips and training to help both property owners and Public Adjusters in their pursuit of effectively managing claims and recovering the claim settlement they deserve after a loss.