Older Roofs and Homeowners Insurance in Michigan

When wind or hail damages a house, the roof is often the biggest single line in the claim. An older roof costs an insurer more in two ways: it is more likely to be damaged by a given storm, and the claim is more likely to turn into a full replacement because worn shingles cannot be patched convincingly. Insurers respond with pricing, with policy language and, at the edges, with underwriting decisions.

The Michigan Department of Insurance and Financial Services (DIFS) notes in its homeowners guide that a quote is not binding and that the underwriting process may include an inspection of your dwelling. In practice that inspection is often a photo from the street, a drone image or a questionnaire about roof age and material. The answers feed into which endorsements end up on your policy.

Most of the time, the result is not a cancellation letter. It is a change in how the roof will be paid for if a storm damages it. That is easy to miss, because it shows up as one more form number in a list on the declarations page.

The table below uses the composition shingle column from a real carrier's sample roof surfaces endorsement, filed in Indiana in 2013, and a made-up replacement cost of $12,000 for the damaged roof surface. Your carrier's percentages, ages and rounding may be different, and your deductible comes off the result.

In that sample, the scheduled percentage for composition shingles drops three points a year until it reaches 25 percent at year 25, and stays there. Under that schedule a storm that destroys a 20-year-old roof pays 40 percent of what the new roof costs, before the deductible. The same storm on a five-year-old roof pays 85 percent. The policy is not denying the claim in either case; it is paying exactly what the schedule says.

If you have a percentage wind or hail deductible as well, the two stack. A 2 percent deductible on a $300,000 dwelling limit is $6,000, which would take most of the 20-year-old roof's scheduled payment in the example. That is worth knowing before a storm, not after.

Under MCL 500.2123, a termination of the policy is not effective unless the insurer delivers or mails written notice to your last known address at least 30 days before the termination date, stating the effective date and each specific reason. A notice in the first 55 days after the policy is first issued can take effect 20 days after it is mailed, and nonpayment follows the policy's own terms. The section also says a termination is not effective unless its reasons conform to the insurer's underwriting rules for that type of insurance.

If you are turned down when you apply, MCL 500.2122 requires the insurer or agent to give the specific reasons, in writing if you applied in writing. If the explanation was oral, you can ask for it in writing within 90 days.

Read any notice for three things: the date, the reason, and whether the reason names a specific roof condition. A notice that says the roof has missing shingles, exposed decking or failed flashing gives you something to fix and document. A notice that only says the roof is old is the kind to ask about, first with the insurer and then with DIFS at 877-999-6442.

Sometimes the honest answer is that a repair satisfies the insurer this year and the roof will be back on its list next year. If the roof is inside roughly its last five years, Stellar's rule of thumb is that replacement is generally recommended once a repair exceeds about 25 percent of a replacement. That is a starting point, not a verdict, and the insurance terms are one more input.

Put three numbers side by side: what the repair costs, what the policy would pay on a storm claim with its current endorsement or schedule, and what your deductible is. A new roof can make the endorsement removable and may earn a newer-home or roof discount from some carriers; DIFS lists discounts as something to ask about, and each carrier sets its own.