San Francisco homeowner dropped by insurer due to flat roof

California’s insurance crisis came for Scott Ethersmith’s home in the Sunset last August.

The problem? The shape of his roof.

His insurer, Lemonade, wrote that one of its guidelines “prevents us from insuring homes with flat roofs since they’re more vulnerable to costly damages compared to homes with other types of roofs.” 

When he’d bought the house three years earlier, Ethersmith had no issues insuring the home, flat roof and all. He suddenly wondered: was the entire Sunset — home to plenty of flat-roofed houses — about to become uninsurable?

Flat roofs aren’t the only issue: Of the 20 largest home insurers in California, which together collect more than 90% of premiums in the state, nearly all place some type of restriction on the type of materials roofs are made out of, their slope or their age.

The most common included bans on non-fire-resistant roofs, especially those made of wood, roofs beyond their estimated life expectancy and flat roofs without proper drainage.

Kelly Moriarty, owner of Moriarty’s Roofing in Santa Cruz, said he has seen a huge influx over the past few years of customers seeking help specifically because their insurer requested it. 

Some Californians have been dropped by their insurer after the company used images taken by satellites or planes to inspect their roofs, at times misinterpreting the results. A bill that would regulate this practice is currently moving through the California Legislature.

Amy Bach, executive director of the consumer advocacy group United Policyholders, said the availability of this technology is probably part of the reason homeowners may feel like insurers are paying more attention to their roofs. At the same time, severe storms and hail have caused an increase in the number of roof-related claims across the country, she said, causing insurers to exercise more caution over factors that can make your roof more likely to become damaged — such as its age.

Many of the clients who seek out Moriarty due to insurance issues come to get a letter vouching for the age of their roof, he said.

When you install a new roof, or buy a new home and get a roofer’s report, you should always ask about the expected lifespan of the roof, said Janet Ruiz, a spokesperson for the Insurance Information Institute, an industry group. These ranges vary widely, anywhere from 10 years to more than 150 years, depending on the durability of the material. 

They may also vary by insurer. Both Mercury Insurance and Wawanesa Insurance, for example, note they will not insure homes with roofs older than 25 years, with exceptions for more-durable tile and slate roofs. At Farmers Insurance Group, asphalt roofs older than 15 years are eligible for  only actual cash value coverage — a type of coverage that will pay the depreciated value of the roof if damaged, rather than the full cost of replacing it.

Homeowners should generally be aware of when their roof is expected to reach the end of its expected lifespan, Moriarty said. They should also keep a lookout — especially when shopping for a new home — for any damaged shingles or tiles, mold, algae or water damage, Ruiz added.

Several insurers ban roofs with more than two layers of shingles, which can reduce a roof’s lifespan and make it harder to identify water leaks. Others place restrictions on roofs made of particular material, such as tin, or simply note they will not insure roofs made of unique or unconventional materials.

But by far, the most problematic roof material is wood. The high risk of wood shake or wood shingle roofs catching fire makes them ineligible for the majority of major insurers. For some, it is a blanket requirement; for others it is unacceptable only if the home is in a high wildfire-risk area.

“The days of being OK with having a shake roof in a lot of areas are probably numbered,” Bach said.

Flat roofs, such as Ethersmith’s, are another common callout in underwriting guidelines. While few outright ban flat roofs, many require a minimum slope to ensure water properly drains off the roof. If not, it could pool and lead to damage or leaks.

Ruiz said flat roofs are generally insurable as long as they are well maintained and have proper drainage systems. Bach concurred, saying homeowners who get dropped by their insurer due to having a flat roof should seek quotes from at least two other insurers before jumping to costly construction.

Lemonade’s most recent filings with the Department of Insurance show it writes policies through two subsidiaries, one of which does not cover homes with flat roofs. Lemonade told Ethersmith in its letter that its guidelines “can evolve so we develop a better understanding of important risks.” The insurer did not respond to requests for comment.

Ethersmith is now on the California FAIR Plan for fire coverage and a secondary policy for everything else. It’s more expensive, though not radically so due to the low fire risk in San Francisco.

Still, the experience was a “wake-up call,” he said. Home insurance is generally required to get a mortgage, making it an essential element for homebuyers in areas as expensive as San Francisco. To Ethersmith, it’s also important to have the assurance that even if his home were to one day be destroyed, the money he used to purchase it wouldn’t be completely lost.

“Having home insurance is a critical part of owning a home,” Ethersmith said. “We can get into such a large financial proposition and know there’s some amount of safety net. … We pay into that safety net. If that safety net is going away, it’s radically changing the landscape of not just living in San Francisco, but living here in the United States.”