In regards to hail claims that we had this year, we have had a number of clients notify us that they are not getting the work done until next Spring. Largely this is due to the fact that they could not schedule a contractor this summer or fall and with winter moving in, they now have to wait until spring.
This in itself is fine, but they need to notify their insurance company of their intent to complete the repairs. Most of the time insurance companies will make an initial payment on the claim of the “Actual Cash Value”. This is the estimated replacement cost less depreciation. This depreciation is often referred to as the “holdback”. The insurance company holds onto this money until repairs are actually completed. It is a way for the insurance company to know that the repairs were actually made.
Once repairs are done, the insured then submits the contractors completed receipt and then the insurance company pays the depreciation holdback (this is assuming we are talking about a Replacement Cost policy). If an insured was not able to schedule the repairs before winter moved in, they need to notify their adjuster or the insurance company of their intent to complete the repairs next year. Once that initial Actual Cash Value payment has been made, the insured then has 180 days to either complete repairs or notify their insurance company of their intent to do so once weather permits.
If they do not notify their insurance company, the insurance company could consider the claim closed after 180 days from the ACV payment. This means the insured might not get the depreciation holdback when they finally do the repairs.
Note: this actually applies to any claim on a homeowners policy. But where we see it the most is on hail claims.