Tennessee Farmers Mutual Insurance Company, Tennessee’s second largest home insurer said it will no longer pay 100% of the cost for roofing materials and replacement shingles. The company will instead be paying the actual cost value, or replacement cost less the depreciation.
Tennessee Farmers Mutual Ins. Co., better known as Farm Bureau spokesman Dan Batey said “We had to make this change because we can’t continue to be unprofitable and lose money.” Since 2008 the insurer has paid out more in claims than collected in premiums.
One Year Cap To Report Hail Damage
A filing was approved by the Tennessee Department of Commerce and Insurance for the actual cash value settlement for roofs. Additionally a requirement has been added that all hail losses must be reported within one year from the date of the hail loss.
The Farm Bureau already had limited coverage for some older roofs, but now the change will affect all policyholders. The changes will apply to policies written or renewed on Oct. 1, 2012 and thereafter. Other insurance companies in Tennessee have already applied roofing limits to their policies.
Batey said in the early 1990’s insurers began offering full roof replacements as a way to gain market share. Before then, it was standard industry practice to offer limited roof coverage.
