My Roof Has Storm Damage. Do I Need 3 Bids for My Insurance Claim or Must I Use My Carrier’s Preferred Contractor?
The short answer is NO! This article will explain how obtaining multiple bids or using a “preferred contractor” only helps insurance companies underpay claims.
Follow the Money
With most homeowner insurance policies (ACV policies being the exception), your insurance company is responsible for paying the entire cost of repairing or replacing your roof after you pay your deductible. Thus, your insurance company has a strong motivation to minimize their costs. Some insurance firms will go to great lengths to delay or deny claims or use other questionable tactics to save money.
Accordingly, it is best if you have someone, such as a competent roofing contractor that you choose or a public adjuster (who is different than the adjuster that your insurance company sends out), that is on your side to make sure ALL of your storm damage is fixed or replaced properly.
Insurance companies have deep pockets and they pay lobbyist a tremendous amount of money to influence government officials to protect their interests rather than the interest of homeowners (Insurance lobbyist lashes out at Public Adjusters). Because of this undue influence, some states such as Kansas, have outlawed the use of public adjusters on residential roofing projects.
Another tactic used by some insurance companies to save money, is their insistence that you use their “Preferred Contractor”. Insurance companies want you to use their Preferred Contractor because they have cut a deal with the contractor to accept very low margins in exchange for guaranteed work. Thus, these contractors are motivated to cut costs by cutting corners on the work that they do for homeowners. Regardless of what your insurance company insists, you have the legal right to choose the contractor you want to work on your home.
In any case, the roofing contractor that you choose should become your greatest advocate when dealing with your insurance company.
How Insurance Claim Estimates are Really Determined
For the most part, the cost of a roof repair or replacement is determined via a standardized software program called Xactimate®. Massive amounts of construction, repair, and replacement cost data is gathered, saved, and analyzed by risk assessment companies such as Verisk Analytics®. Verisk is the developer of Xactimate, the leading claims estimating software program that is used by almost all adjusters and insurance companies.
Insurance companies and adjusters enter roof measurements, materials info, etc., into the Xactimate software to produce cost estimates. Thus, your insurance company may already know the approximate cost of replacing your roof before a roofing contractor is able to put together a quote of their own.
If your insurance company already knows the market value of fixing or replacing your roof, then why would they suggest, or in some cases insist, that you get multiple bids? It’s because the insurance company wants to manipulate you into either:
- Obtaining a cheap bid from some “Chuck-In-A-Truck” that is willing to install a new roof for less than what the Xactimate software would have allowed, or;
- Creating a bidding war between the contractors so they lower their prices below market rates to win your business.
In either case, the price reduction benefit only goes to the insurance company. Your insurance company will only pay for what the contractor charges and will not pay you the difference between what their software says they should be paying and what some desperate contractor is willing to take.
For example, let’s assume that the Xactimate software estimates that your roof should be replaced for $20,000. However, you find a contractor that is willing to do the work for $16,000. Let’s also assume that you have a $1000 deductible. You will pay the $1000 to the contractor as your only expense and then your contractor will bill your insurance company for $15,000. You do not get to keep the additional $4,000 that the insurance company would have paid to get your roof replaced properly.
Furthermore, low estimates encourage contractors to cut corners. Any contractor that is willing to accept a below market payment must cut corners somewhere to survive. Unfortunately for you, this may be that the contractor is: uninsured (you could be held responsible for any injury or damage the contractor causes); unlicensed; using unskilled laborers; using poor materials; not using some materials such as underlayments; and does not offer an extended workmanship warranty (which is different from the manufacturer’s warranty). Most of these types of contractors eventually go out of business so any workmanship warranty (if offered in the first place) would become worthless. In other words, accepting a cheaper bid, gets you a cheaper roof.
Some insurance carriers are very good at the manipulation game. They might say something like, “Why wouldn’t you get multiple bids to make sure that you are not being ripped off?” This, logic might make some sense if you were paying for the roof yourself. However, with an insurance claim, there really is no way for a contractor to “overcharge” for their work because insurance companies will reject payment on work that is outside of the Xactimate parameters.
What Should I Do Instead of Obtaining Multiple Claims or Choosing the Insurance Company’s Preferred Contractor?
Do your research and pick a professional, well-established, licensed, and insured roofing contractor that is an expert in using Xactimate, will help you with other storm damage (such as windows, siding, and doors), is BBB A+ Accredited, has hundreds of 5 Star Google and other reviews, and will stand behind their work with an extended workmanship warranty. It’s okay to interview contractors until you find someone you are comfortable with and sense that they will have your best interests in mind.
You may also want to take this opportunity to upgrade to a stronger, more attractive, or longer lasting roof. Does the roofing contractor offer options other than basic asphalt shingles such as stone coated steel, metal panel and composite polymer products?
Remember, it is your choice, not the insurance company’s decision on who does the work on your home. Do you want to help the insurance company save money or do you want the job done right? Don’t ever let an insurance company force you to pick a low-quality contractor, warranty or product.
If you have experienced hail, wind or other storm damage in the greater Kansas City/Topeka metro areas, the greater St. Louis metro area, the Fort Smith/Mena area or the quad-state sections of Missouri, Kansas, Oklahoma and Arkansas (including areas in and around Joplin MO, Springfield MO, Branson MO, Baxter Springs KS, Pittsburg KS, Miami OK, Grove OK, Bentonville/Rogers AR) then Roofing Force® is the storm damage roofing and restoration contractor you can count on to get the job done properly. We are expert installers of all types and styles of roofing products. See our Storm Damage webpage or call our headquarters at (913)270-5440 for more information or to request a free inspection.
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