Have you ever paid for your roof to be replaced? Ever?
We haven’t. We’ve lived in houses for 30+ years and never once have we paid for a new roof. Three times the insurance company has on our behalf. Never have the roofs been more than 13 years old.
The economics of home insurance don’t make any sense to me. I spoke with a lot of neighbors over the last few weeks – as we were making a claim for hail damage – and no one I spoke with has EVER paid for a new roof directly. Everyone has just had them replaced after storms and paid the relatively small deductible.
How do you make sense of these figures …
Our new roof I will cost $57.5K. We have a $2.5K deductible, so the insurance company is picking up $55K.
Our home insurance annual premium is currently $3.4K, but it’s gone up a bit in recent years. I’d estimate we’ve paid about $35K in premiums over the time we’ve lived in this house (almost 13 years).
That’s a $20K shortfall for the insurance company. Do they make that up with their investing prowess? And, cover their profit margins (2-3%)?
I guess they do. I looked at the insurance industry’s stock market returns over the last 10 years and it was identical (11.3% annual average) to the S&P 500 overall.
Still, maybe State Farm needs to cut back on their Aaron Rodgers deal until I at least get my roof finished!
Have you ever paid for a new roof yourself?
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