What to Do When Your Roof Repair Cost More Than Insurance Estimate

You’ve been through the storm—literally. The hailstorm passed, the wind died down, and the tree limbs have been cleared from the yard. You filed a claim with your insurance company, met with the adjuster, and finally received the settlement check. There is a sense of relief. The hard part is over, right?

Then the roofing contractor climbs up for a detailed inspection. They look at the insurance paperwork. They look at your roof. They look back at the paperwork. And then they drop the bomb: “This estimate is light. The roof repair cost is going to be more than your insurance estimate.”

Your heart sinks. Panic sets in. How can this be? The insurance company sent their expert. Didn’t they calculate this correctly?

If this scenario sounds familiar, you are not alone. It is one of the most common and stressful situations in the home restoration industry. The gap between what the insurance company pays and what the repair actually costs can be significant, leaving homeowners feeling confused, cheated, and stuck.

But here is the good news: “roof repair cost more than insurance estimate” does not necessarily mean you are going to have to pay thousands out of pocket. In fact, in many cases, this is just the beginning of the negotiation, not the end of the road.

This comprehensive guide will walk you through exactly why this happens, what your rights are, and the step-by-step process to bridge the gap. We will strip away the insurance jargon and give you the clear, honest information you need to get your roof fixed properly without going broke.

Understanding the Two Sides of the Estimate

To understand why there is a difference in numbers, you first have to understand where the numbers come from. The adjuster and the contractor are playing two different sports, even though they are both looking at the same field.

The Insurance Adjuster’s Goal: The Minimum Viable Product

When an insurance adjuster comes to your home, their job is not to provide a bid for a beautiful, long-lasting roof. Their job is to assess the “covered loss.” They are looking at your policy and trying to determine the least amount of money required to return the property to its pre-loss condition.

Most insurance companies use specific software programs—like Xactimate or Symbility—to generate their estimates. These programs are industry standards, but they have limitations. They calculate costs based on averages. They assume a perfect world where decking isn’t rotten, where flashings come off easily, and where all materials are readily available.

The Contractor’s Goal: The Functional, Safe, and Code-Compliant Product

Your contractor, on the other hand, is looking at the physical reality of your house. They aren’t looking at a computer model; they are looking at wood that has been wet for three days, pipes that are rusted, and shingles that have been baked onto the roof by 15 years of sun.

A contractor’s estimate includes the “hidden” costs that the insurance software might miss:

• The cost of hauling away heavy debris.

• The price of plywood if the decking is rotten.

• The upgraded flashing required by modern building codes.

• The extra labor required to hand-carry materials to a steep, complex roof.

Important Note: A low insurance estimate is not always a sign that the adjuster was trying to cheat you. Often, they simply don’t have the full picture until the shingles are pulled back. However, it is your contractor’s job to point out what the adjuster missed.

Top Reasons Why Your Roof Repair Cost More Than Insurance Estimate

Let’s look at the specific, concrete reasons for this discrepancy. Understanding the “why” is your first weapon in getting the problem solved.

1. The “Invisible” Damage: Decking and Underlayment

This is the most common culprit. An adjuster can see damaged shingles from the ground or the roof. They cannot see the plywood (decking) underneath those shingles until the old roof is torn off.

• The Issue: Water may have seeped through old shingles, causing the plywood to rot or delaminate. Sometimes, the decking is simply old and weak.

• The Gap: Insurance covers the direct physical loss to your property. If the decking is rotten because of a long-term leak that existed before the storm, they may deny it. However, if the storm caused enough damage to allow water in, the resulting rot might be covered.

• The Cost: Replacing plywood decking is expensive. It’s material, labor, and disposal. If your insurance estimate assumed zero decking replacement and the crew finds ten sheets of rotten wood, you are looking at a significant overage.

2. Code Upgrades and Local Requirements

Building codes are not suggestions; they are the law. When you repair a roof, you are often required to bring certain elements up to current code. Insurance policies generally have an exclusion for “code upgrades”—meaning they pay to put it back the way it was, not to make it better.

• The Issue: Your old roof might have had only one layer of felt paper and outdated pipe flashings. Current code might require an ice and water shield along the eaves and upgraded, longer-lasting flashing around chimneys.

• The Gap: Standard homeowners policies typically do not cover these upgrades unless you have a specific endorsement (often called “Ordinance or Law” coverage).

• The Cost: Mandatory code upgrades can add thousands to a bill, and if you don’t have the right coverage, that money comes out of your pocket.

3. Rising Material and Labor Costs

Insurance estimates are based on data that is often a few months old. The construction market, however, is volatile.

• The Issue: If you live in an area that was hit by a widespread storm, there is suddenly a massive demand for shingles, plywood, and skilled labor. Prices surge.

• The Gap: The insurance company priced your roof based on pre-storm prices. Contractors have to charge based on the current market rate, which could be 15-20% higher.

• The Cost: This is a pure supply-and-demand gap. You are paying for the reality of the market, not the theoretical cost.

4. The “Generous” Estimator vs. The “Precise” Contractor

Some contractors provide a “warm body” estimate. They want the job, so they write a number that matches your insurance settlement exactly, promising to do the work for that amount. They then cut corners to make it work.

• The Issue: Reputable contractors provide a precise scope of work. They account for proper waste factors (the extra shingles needed for hips and valleys), specific starter strips, and high-quality underlayment. They refuse to compromise on the integrity of the roof.

• The Gap: The insurance estimate might have used a lower waste factor or omitted necessary accessories. The contractor is bidding the job correctly.

• The Cost: The difference between a “patch job” and a “roof replacement.”

5. Complicated Roof Geometry

A roof is not just a flat plane. It has hips, valleys, ridges, dormers, and skylights.

• The Issue: Insurance software sometimes simplifies the geometry. It calculates the square footage but underestimates the complexity. A roof with multiple valleys and steep pitches takes longer to install. It requires more precise cutting and is more dangerous for the crew.

• The Gap: The labor rate in the insurance estimate might be based on a simple ranch-style home. Your complex Victorian requires a higher level of skill and time.

• The Cost: Higher labor costs due to the “difficulty factor.”

The Most Important Document: Your Policy and the “Recoverable Depreciation”

Before you call anyone to complain, you need to understand one crucial concept: Recoverable Depreciation. This is the single most common reason for the perceived gap between the estimate and the cost.

When an insurance company writes an estimate, they calculate the Replacement Cost Value (RCV) . This is what it would cost to replace your roof with new materials. However, because your old roof had already lost some value due to age (wear and tear), they subtract an amount for depreciation. What is left is the Actual Cash Value (ACV) .

Here is how it plays out:

1. Insurance Estimate (RCV): $10,000

2. Depreciation (withheld): -$2,000

3. Initial Check (ACV): $8,000

You get a check for $8,000. You think, “Great, I have $8,000 to fix my roof.” But the roofer bids the job at $10,500. You are now $2,500 short. This is the gap.

The “Recoverable” Magic:
The $2,000 depreciation is usually “recoverable.” That means the insurance company still owes it to you. They just won’t pay it until the work is done.

To get that money, you need to:

• Sign a contract with a licensed roofing contractor.

• Have the roof completely installed.

• Send the final invoice to your insurance company.

They will then release the depreciation holdback (the $2,000) directly to you (or sometimes to the contractor). This is officially called Supplemental Payment.

If you understand this, you realize that the gap isn’t always $2,500. If the RCV is $10,000 and the roofer is $10,500, you are only $500 short once the depreciation is recovered.

Note: If your policy is an ACV policy (Actual Cash Value), the depreciation is not recoverable. You only get the depreciated amount, and you are responsible for the rest. Check your policy documents to see which type you have.

The Power of the “Supplement” (The Contractor’s Secret Weapon)

When your contractor says the roof repair cost is more than the insurance estimate, they should immediately offer a solution: The Supplement.

A supplement is an additional request sent to the insurance company. It is a formal document that itemizes the missing items, the overlooked damages, and the necessary code upgrades that the original adjuster missed.

The Step-by-Step Supplement Process

If you find yourself in this situation, here is the professional workflow you should expect from a quality contractor.

1. The Discovery: The contractor completes a “tear-off” (removing the old roof) or a detailed inspection. They identify damaged decking, missing flashing, or code violations.

2. The Documentation: A good contractor does not just call the insurance company. They photograph everything. They take pictures of the rotten wood with a measuring tape next to it. They photograph the missing step flashing. They document the code book showing the requirement.

3. The Submission: They compile these photos, measurements, and costs into a professional supplement package and send it to your insurance company’s claim department.

4. The Adjustment: An insurance adjuster (often a different person than the one who visited your home) reviews the file. If the documentation is solid, they approve the additional costs.

5. The Payment: The insurance company issues a second check for the new costs (or adds it to the depreciation holdback).

Quote from a Restoration Project Manager:
“The insurance companies expect supplements. They are built into the system. The problem is when homeowners try to handle it themselves or hire a handyman who doesn’t know how to document the damage. If you don’t provide the proof, the insurance company assumes the damage doesn’t exist.”

What You Must Do: A Homeowner’s Action Plan

When faced with the news that your costs are higher than expected, follow this plan to protect your wallet and your sanity.

Step 1: Stop and Breathe (Don’t Sign a “Waiver”)

The worst thing you can do is panic and sign a document from your contractor that says you are responsible for the “difference” without a plan to get the insurance company to pay it. Do not sign anything that waives your rights or commits you to paying the gap out of pocket until you have exhausted the supplement process.

Step 2: Demand an Itemized Breakdown

Ask your contractor for a detailed estimate. It should not just say “roof repair.” It should list:

• Specific quantities of plywood.

• Specific linear feet of ridge vent.

• Specific type of underlayment.

• Specific costs for dumpster fees and permits.

You need this level of detail to compare to your insurance adjuster’s report.

Step 3: Compare Apples to Apples

Line up the two documents. Look for items that are on the contractor’s list but not on the insurance list.

• Does the insurance list 2 squares of felt, but the contractor lists ice and water shield? (Gap).

• Does the insurance assume 0 sheets of plywood, but the contractor assumes 10? (Gap).

Make a list of these discrepancies. This is your negotiation starting point.

Step 4: Authorize the Contractor to File a Supplement

This is almost always the most effective path. A reputable contractor deals with insurance adjusters every single day. They speak the language. They know what documentation is required. Give them permission to work on your behalf to get the supplemental claim approved.

Step 5: Be Present (But Not a Negotiator)

Stay in communication with your contractor. Ask for updates on the supplement status. If the insurance company schedules a re-inspection with a different adjuster, try to be home, but let your contractor do the talking. They know what to point out.

 Insurance Estimate vs. Contractor Estimate

To visualize the difference, let’s look at a hypothetical claim for a typical 30-square roof (approx. 3,000 sq ft) after a hailstorm.

Navigating the Conversation with Your Insurance Company

If you decide to handle the supplement yourself, or if you simply want to understand the process better, here is how to talk to your insurance adjuster.

What to Say

• “I have received a professional estimate from a licensed contractor that details additional damage found during inspection.” (This signals that you are serious and have experts backing you up).

• “Can you please explain the line-item differences between your scope of work and my contractor’s scope of work?” (This forces them to justify their numbers).

• “My contractor is prepared to submit a supplement with photographic evidence. What is the preferred method for submission?” (This shows you are organized and ready to play by their rules).

What NOT to Say

• “This is unfair!” (Insurance is about contracts, not fairness).

• “My neighbor got a new roof for less.” (Every roof and policy is different).

• “I’ll just pay the difference.” (Never offer to pay before the supplement process is fully exhausted).

The Dangers of a “Cash-Out” and Hiring Cheap Labor

When faced with a gap, some homeowners are tempted to “cash out” the insurance check and hire a cheaper, unlicensed contractor to do the work for the lower amount. This is a high-risk gamble.

The “Cash-Out” Gamble

If you take the $8,000 ACV check and decide not to fix the roof, you are in trouble. If another storm hits, your insurance may deny the claim because of the pre-existing, unrepaired damage.
If you hire a “handyman” for $8,000, they might:

• Not pull a permit (making the work illegal).

• Fail to install proper underlayment (voiding the shingle warranty).

• Miss the rotten decking (leading to a collapse later).

• Do such a poor job that no reputable roofer will touch it to fix it later.

The Value of a Licensed Contractor

Paying a professional to handle the supplement process is an investment. They are fighting to get the insurance company to pay the full cost of the repair. By hiring a pro, you are leveraging their expertise to close that gap. The extra money they get from the insurance often covers their higher-quality materials and labor, without costing you a dime more than your deductible.

Common Questions Homeowners Ask (Mini FAQ)

Q: Can I choose any roofer I want?
A: Absolutely. Your insurance company cannot force you to use a specific contractor. You have the right to choose who works on your home.

Q: The insurance adjuster says his price is “prevailing rate.” What does that mean?
A: It means the price is common in the area. However, “prevailing” does not mean “exclusive.” If your contractor uses better materials or faces unforeseen difficulties, the prevailing rate may not apply.

Q: My contractor wants me to sign an “Assignment of Benefits” (AOB). Should I?
A: This is a complex document. It gives the contractor the right to communicate with the insurance company and receive payments directly. In some cases, it protects you. In others, it can lead to abuse. Read it carefully and ask questions. If you are uncomfortable, ask if they can work without it.

Q: What if the insurance company denies the supplement?
A: If they deny it, ask for a written explanation. Then, ask your contractor for their reasoning. If you both believe the work is necessary and covered, you can enter into appraisal or mediation, which are dispute resolution methods outlined in your policy.

Additional Resources

Navigating insurance claims can be overwhelming. For official information regarding policyholder rights, you can visit the website of your state’s Department of Insurance. They often provide consumer guides that explain the claims process and how to file a complaint if you feel you are being treated unfairly by your insurer.

(Note: For a direct link, please visit the National Association of Insurance Commissioners (NAIC) at www.naic.org to find your state’s specific resources.)

Conclusion

Discovering that your roof repair cost is more than the insurance estimate can be a jarring experience, but it is rarely the end of the world. It is a signal to pause, investigate, and negotiate. Remember that the initial estimate is often a starting point, not a final verdict. By understanding the difference between an adjuster’s scope and a contractor’s scope, grasping the concept of recoverable depreciation, and empowering a professional contractor to file a thorough supplement, you can bridge the gap and get your home the repair it deserves. Your roof is your home’s primary shield; ensuring it is repaired correctly is worth the effort of a few extra phone calls and a little patience.

Frequently Asked Questions (FAQ)

1. Why would an insurance company intentionally lowball an estimate?
It is rarely intentional “lowballing” in the malicious sense. Adjusters work from software that uses averages. They also have a duty to only pay for damages they can see. They cannot pay for rotten decking they cannot see. The process is designed to pay for the visible damage first, and then pay for hidden damage as it is discovered.

2. How long does the supplement process take?
It varies. A simple supplement (like adding a few sheets of plywood) can be approved in 24-48 hours. A complex supplement involving code upgrades or disputed damage can take several weeks. It depends on the insurance company’s workload and the quality of the documentation provided.

3. Do I have to pay my deductible if the final cost is higher?
Yes, your deductible is your responsibility. However, sometimes the final settlement from the insurance is large enough that it covers the full cost of the roof plus your deductible, effectively meaning the contractor receives the deductible amount from the insurance proceeds. You should never pay a contractor your deductible before the work is done and the insurance has paid out.

4. What if my roof is old? Will they still cover the damage?
If the damage is caused by a covered peril (like wind or hail), your insurance covers it regardless of the roof’s age. However, they will deduct depreciation based on that age. Also, if the roof is very old, they may only pay the Actual Cash Value (ACV), not the full replacement cost.

5. Can I switch contractors mid-process if I’m unhappy?
Yes, but it can be complicated. If work has already started, you will have to settle up with the first contractor for work performed. If no work has started, you can usually cancel the contract, but read the fine print for any cancellation fees. A new contractor will have to start the supplement process from the beginning.