An Insurance Roof Gets Paid in Three Checks. Here's How Long Each One Takes.

Sign a hail roof in Denver on Monday and you won't see the full contract price on Tuesday. On a replacement-cost claim, the money comes in pieces, and the last piece only arrives after your crew has bought the materials, torn off the old roof and put the new one on.

Plenty of roofers know this the way they know the weather: roughly. Fine for one job. Running ten or twenty at once, it decides whether you can make payroll in November.

Here's the order the money moves in, the Colorado and Texas rules that touch it, and the cash math.

The three checks

Take a typical Colorado claim on a 12-year-old laminated roof. Example numbers:

Check #1, the ACV payment. After the adjuster's inspection, the carrier pays actual cash value minus the deductible. On these numbers that's $6,700, and it's usually made out to the homeowner and often the mortgage company too. Not to you.

Check #2, the supplement. The adjuster's first estimate misses things: drip edge, ice and water shield where code requires it, a second layer to tear off, a starter course, a vent that has to be replaced. You document it, send it in, and the carrier revises. Supplements are their own paperwork cycle, and some carriers pay them with the depreciation release rather than separately.

Check #3, the depreciation release. The $6,300 held back gets paid once the work is done and the carrier has your final invoice. That's the "recoverable" in recoverable depreciation: it's the homeowner's money, but only once the roof is actually replaced.

Add it up and the homeowner collects $13,000 from the carrier, plus whatever the supplements add, against an $18,000 job. The other $5,000 is the deductible, and it comes from the homeowner, which is the whole point of the Texas law that makes "we'll cover your deductible" a crime.

What the state rules say about timing

Colorado. The Homeowner's Insurance Reform Act of 2013 set floors on replacement-cost policies. The best known is at least 365 days after additional living expense benefits run out to replace property and collect the full replacement cost. Most roof-only hail claims never involve living expenses, so in practice the deadline that bites is whatever the policy says. Read it, and tell the homeowner the date.

Colorado also has a rule that helps on the first check. The Division of Insurance's Bulletin B-5.01 says insurers can't deduct contractor overhead and profit when they calculate actual cash value. If an ACV figure looks light by about 20%, check whether O&P was stripped out.

Texas. There's no single state deadline for depreciation. It's in the policy. Many forms require the homeowner to tell the carrier they intend to claim the replacement cost, often within 180 days of the loss, even if the work finishes later. Miss the notice and the holdback can be gone. Make that notice part of your signing paperwork.

Texas Insurance Code §707.004 adds another rule. The carrier can refuse to release the recoverable depreciation until it gets reasonable proof that the homeowner paid the deductible. That's the enforcement end of the deductible law, and it lands on your final check: no proof of the deductible, no depreciation.

None of this is legal advice. It's the map of where the money stops along the way. Policies differ by carrier and form, so read the declarations page with the homeowner before anyone signs.

The cash-flow math for a roofer

The timing rarely hurts on one roof. It hurts when you run a storm.

Say you sign 12 replacements off one September hail day at $18,000 average. Your costs hit fast:

• Materials: about $6,500 a roof, due on delivery or net-30
• Labor: about $3,500 a roof, paid the week the crew installs
• Your out-of-pocket per roof before the final check: about $10,000

What you've collected by install day depends on your terms. If you take the ACV check as a deposit ($6,700) plus the deductible at install ($5,000), you're holding $11,700 against $10,000 in costs. Cash positive, barely. The $6,300 depreciation is your margin, and it's sitting with the carrier.

Now the bad version. The homeowner deposits the ACV check and sits on it, the mortgage company has to endorse it and takes three weeks, and the deductible doesn't come until the depreciation does. You're carrying the full $10,000 per roof. Twelve roofs is $120,000 floated for 30 to 90 days, which is roughly how long the trip from install to invoice to inspection to release takes when nothing goes wrong.

Three fixes cost nothing:

1. Write the payment schedule into the contract. ACV check due when it arrives, deductible due at install, depreciation and supplements due on release. Every step tied to a date, not a feeling.
2. Collect the deductible before you send the final invoice. In Texas the carrier can hold the depreciation without proof of the deductible anyway, so get the receipt into the file on install day.
3. Submit the completion package the day the crew leaves. Final invoice, photos, any supplement items, the certificate of completion. Every day it sits in a truck is a day the depreciation sits with the carrier.

Why this changes what a lead is worth

The three-check structure is one more reason the build rate matters more than the sign rate. A signed contract that gets denied costs you the inspection. A claim that gets approved on a thin ACV, with an old roof that depreciated 60% instead of 35%, costs you more. You float the materials and labor on a much smaller first check, and a bigger share of your margin waits on the release.

That's also why roof age is half of a good lead score. A roof at year 10 under 1.75 inches of hail tends to come with a bigger first check and a shorter float than a roof at year 22 under the same stones. On year-22 roofs, the carrier's ACV schedule often eats the claim before it starts.

The short version

• Check #1: ACV minus the deductible, to the homeowner, after the adjuster's inspection.
• Check #2: supplements for what the first estimate missed.
• Check #3: the depreciation holdback, released after the roof is done and invoiced.
• Colorado: at least 365 days after living-expense benefits end, and no deducting contractor O&P from ACV. Otherwise, the policy sets the deadline.
• Texas: the deadline is in the policy (often a 180-day notice of intent), and the carrier can hold depreciation until it sees proof the deductible was paid.
• Twelve roofs from one storm can mean six figures floated for 30 to 90 days. Write the payment schedule into the contract.

Run your own ticket, costs and float through the cost-per-job calculator to see what a storm costs you before the last check clears. When you're ready to fill the crew with roofs worth floating, our territories score every home inside the radar-estimated hail footprint on stone size at the address and roof age, for one roofer per city at a flat price on the pricing page. If your city is still open, check the territory map. First come.