Halfway up a northwest-facing hillside, a house sits on a wooded lot. Direct sun doesn’t arrive until late morning, and tree cover keeps the roof mostly shaded, even on the brightest days. Although it’s clear of large overhanging limbs, moisture evaporates slowly, allowing moss and algae to take hold. These invaders push under and eat away at the asphalt shingles—weakening the roof, shortening its lifespan, and setting the stage for damaging leaks. But all looks fairly benign from the ground, and the homeowners insurer may prefer not to send inspectors up ladders.
New analytics can also help insurers delve into roof condition at a deeper level.
For various kinds of roofs in different regions, the details may vary. Still, the challenge for insurers can be similar: The full extent of a roof's condition could go undetected. There can be much to see with effective imagery analytics to help assess risk and identify opportunities for mitigation:
- Discoloration from algae, water pooling, vent staining, and rust
- Defects such as missing material, patches, and structural damage
- Hidden issues with presence of tarps or debris
In these details, insurance underwriters may see direct evidence or potential indicators of pre-existing damage or imminent risk of new or escalating losses due to poor maintenance, age, or external elements. Tarps or missing material, for example, may indicate breaches where water already enters a structure during rain or snowmelt. Such issues may call for mitigation by the property owner.
Peeling back the layers of roof risk
Critical as the immediate data is, new analytics can also help insurers delve into roof condition at a deeper level—not just a snapshot in time, but how a roof may deteriorate over the years. Beyond the specifics of one roof, geography can come into play:
- Coastal homes may be subject to both the fury of hurricanes and the less intense but repeated onslaught of strong winds, which pick away at shingles, gutters, and flashing. Salt spray can add corrosive effects, especially to rust-prone metal roofs.
- Farther inland, hail notoriously inflicts damage and incremental wear and tear that may go unnoticed for months or years. An insurer could be paying a claim for damage that occurred under a long-expired policy issued by a different company.
- And as noted in the example above, even relatively calm conditions can take their toll on roofs with fungus, mold, mildew, or algae build-up—not to mention the risk of toppling trees or falling limbs.
Finally, there is the roof type: Different materials such as asphalt shingles, metal, and slate each have their strengths and weaknesses in resistance or susceptibility to damage, as well as repair and replacement costs.
Recurring challenges, broad benefits
Verisk has seen multiple insurers grapple with an array of roof-related challenges. Their journeys differ, but some common themes have emerged. First, it’s important to tackle the problem from a broad perspective, encompassing both current, reliable data and how to apply it in the market. Second, roof data driven by aerial imagery can support analytics that produce easy-to-use roof scores and help uncover a wide range of key condition attributes. Knowledge of pre-existing damage and a roof’s life expectancy can help guide underwriting and inspection decisions in a line where 90 percent of business is renewals, but only 10 percent of properties are inspected. And finally, leveraging robust data can bring an insurer closer to making confident decisions on their book of business, including:
- Underwriting action to deem a risk ineligible
- Inspection decisions to confirm or uncover potential issues
- Straight-through processing for eligible risks based on reliable data
- Evaluation as needed to help clarify the overall risk profile
- Mitigation or monitoring of minor issues
For the house on the hill, detecting discoloration on the roof could prompt a range of actions, depending on the point in the policy life cycle: Rejecting the risk, ordering an inspection or further underwriting information, or asking the policyholder to take corrective action. A broad scope of roof data can help support more efficient and effective homeowners workflows from end to end: Quoting, underwriting, renewal, and ongoing policyholder engagement to help master a critical aspect of property risk.
