# Working with HO's insurance company



## pro exteriors

I've been in business a year now and things are going great. One question I have that I know some of you pros that have been in business longer than I've been alive will be able to answer is. I see a few of my competitors advertising "we work with your insurance company" we get a lot of hail around my area so insurance work is big but what are they talking about? I've done a few insurance jobs and even worked with the adjuster at the HO's request to make sure everything that was damaged was covered and to make sure the HO doesn't get ripped off etc. Is that all they are talking about? Have I been "working with their insurance" without even knowing it? If there is more to it then please explain what that means and how I work with the insurance company, I know for the ins. co. to give me much info the HO has to authorize the ins. co. to give me info. Just looking for some general advice on dealing with ins. companies. thank you in advance


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## Billy Luttrell

Some of the insurance companies have a preferred vendor list that ends up getting a good bit of the work but from my experience the "we work with your insurance" advertisers are stormers or at the very least locals who modeled their business after stormers. Usually meaning they get the home owners to sign contingency contracts that lock them into the deal if they " get the roof bought " by the insurance.


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## dougger222

Another very common term with exterior contractor working insurance claims is this,
"Expert in dealing with insurance companies". 

Like Billy said, a contingency contract is very common with these companies primarily working with insurance companies. 

I've worked many hundreds of insurance claims dealing directly with independant, staff, field, and office adjusters. Only one had a homeowner sign a contingency contract prior to meeting with adjuster. This was only done because her boyfriend used my expertise to get a reinspect ($0) reversed to $18,000 only to pocket the ACV. The girlfriend's roof had been denied twice and finaly the engineer recommended replacement.

If you've worked hand in hand with adjusters and or insurance personal you've basicly done what your competition advertises and perhaps didn't even know it!

Before 06 I only did a handful of insurance jobs and back then just put my normal bid together (very cheap) and got the job. 06 brought very few new roofs and a lot of insurance work so decided to switch my business structure from new roofs to tear offs. Subbed in 06 from a giant insurance restoration firm and by the end of 06 figured most of it out. 07 bought Xactimate and started to "team up" with several adjusters and agents both company and independant.

A couple things to know about doing insurance work,
#1. Homeowners will promise you the job only to either pocket the money or get you to run the bid up get the insurance to pay based on it only to find a cheap crew to do the work to pocket thousands.
#2. Homeowners will want you to the do the roof and put money in their pocket.
#3. Every insurance company has different time frames to have work done. In MN it ranges from 6 months to 2 years even thought the state law is 2 years. If you go past the allowable time fram you may not get the RCV (recoverable cash value).
#4. Not every policy is for replacement. You'll find some policys that only owe for ACV (active cash value) to 15 years. You'll also find deductibles ranging from $250 to over $10,000.

I could go on and on............


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## dougger222

Billy Luttrell said:


> Some of the insurance companies have a preferred vendor list that ends up getting a good bit of the work but from my experience the "we work with your insurance" advertisers are stormers or at the very least locals who modeled their business after stormers. Usually meaning they get the home owners to sign contingency contracts that lock them into the deal if they " get the roof bought " by the insurance.


This is true and there are ups and downs to these programs. Two of the big boys use the same vendor and to be part of the vendor you have to have an office front and pay a kick back to them for jobs typicaly 20%. Also if you get a lead from a job they get you from the same insurance company you have to hand it over to them. A contractor I know took a two day class in Florida a couple years ago with one of the large recommended vendors.

I've met a few adjusters who say they've had bad luck refering in the recommended vendor program hence they call me when they need help.

As far as referals from adjusters or agents my experiance has been 90-95% lead to sales.

Also, keep in mind doing larger insurance claims IE, roofing, siding, widows, gutters, etc. you should be paid overhead and profit on the claim which typicaly amounts to 20%. Some carriers want 3 trades with invoices to pay while others only pay if the claim makes you go inside the house for example windows, flood, or fire. One insurance company in MN won't pay OH&P on roofing no matter what. They say there's plenty of money in Xactimate to make money off roofing!!! They'll pay it on the other trades but no roofing.


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## larryb

Pro Ext,

No offense intended but I did not see your introduction or else I missed it. My reasoning for pointing that out is that your questions are questions that are usually answered prior to a contractor taking on ins work...

Here's some food for thought: www.burcos.com/recover.htm. I'll be adding the names of some of the certified contractors in the coming days.

=================

Clarification: 

(Some) "Homeowners will promise you the job only to either pocket the money or get you to run the bid up get the insurance to pay based on it only to find a cheap crew to do the work to pocket thousands." 

They are free to do that if you do not have a solid and signed contingency agreement which is the mistake many free estimate contractors make. If you do have a solid and signed contingency agreement, successful attempts as described above made by a homeowner results in a breach of the agreement on their part which makes them liable, financially and otherwise.


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## Roofmaster417

Honestly how you handle your business right now being a virgin with insurance claims is VERY important.If you fall into the cash back,deductible munching mentality it will prove hard to recover from that.You will start some stinkin thinkin about how that is the ONLY way you can compete.You are your toughest competition.

I think its impressive that you are inquiring about the claims process.Most new contractors sell a couple jobs during a storm,meet some adjusters,get the homeowner hosed or don't have the smarts to control the situation.

They will then call themselves storm specialist.When in reality they should have a sign around there neck stating " Future Adjuster and Homeowner Puppet".


They find themselves reamed by a veteran storm damage homeowner.And maybe my statement about controling the situation might be a little innaccurate.Maybe control your role in the situation is more accurate of a statement.Since you cannot really control someone you can sure as hell influence it by the role you play..


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## pro exteriors

larryb said:


> Pro Ext,
> 
> No offense intended but I did not see your introduction or else I missed it. My reasoning for pointing that out is that your questions are questions that are usually answered prior to a contractor taking on ins work...
> 
> Here's some food for thought: www.burcos.com/recover.htm. I'll be adding the names of some of the certified contractors in the coming days.
> 
> =================
> 
> Clarification:
> 
> (Some) "Homeowners will promise you the job only to either pocket the money or get you to run the bid up get the insurance to pay based on it only to find a cheap crew to do the work to pocket thousands."
> 
> They are free to do that if you do not have a solid and signed contingency agreement which is the mistake many free estimate contractors make. If you do have a solid and signed contingency agreement, successful attempts as described above made by a homeowner results in a breach of the agreement on their part which makes them liable, financially and otherwise.


 
sorry I forgot the intro so here it is. I'm 29 I've worked for my dads roofing company for a long time (I was on my first roof with him at 12) I took a few years off from roofing to follow what I thought was my dream of being an auto technician, after realizing there was no money in it and I hated being chained to my tool box and stuck inside all the time I quit to work for my dad again. Over the last 5 yrs that I've been working with him again I've realized that we have very different personalities and different ideas of how a business should be run (although he's been in business for 20 yrs so he must be doing something right but his business is stuck at just him and two other guys and he refuses to let it grow). There was talk a few yrs ago of me taking over his business in a few years (now) but he's too much of a control freak to let that happen so with a wife a 6 yr old and now a 16 month old I've got tired of waiting for him to allow me some more responsibility so I've started my own exterior contracting company, roofing is the bread and butter but we do siding, windows etc too. I'm starting out small, debt free and slow so that the business doesn't outgrow my knowledge of how to run it, I grossed about $80k last year with no advertising whatsoever just word of mouth so with a phone book ad (yes they sitll work in our area becasue we have a large retirement population) some radio advertising and thousands of door hangers and direct mailers I hope to triple what I did last year. I'm running my business completely above board with all the proper licensing, insurance, payroll taxes, workers comp etc and my goal is to be the opposite of what most people think of when they think of a roofer or contractor (smells like smoke and alcohol piece of junk truck, dishonest, poor dresser, hasn't shaved or cut his hair since woodstock etc. and we have a lot of contractors around here that fit stereotype exactly). I show up on every job clean, smelling good, shaved, dressed in riggs cargo pants and a button down shirt with my logo on it and just try to be as honest, professional and straightforward as possible and hope for the best. Thats my intro and my story hope you enjoyed reading it.


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## LCG

*Working with HO ins.*

Simple. Its no different than bidding and oding your work as usual./ 

!)Bid the project as you normally do.

2)When the customer says the insurance company only gave them 5000.00 and you bid 6200.00. TOO BAD! Not your problem. Your price is non negotiable..... You don't care what their deductible is. Thats their problem.

3) Minimum 50% up front for ANY project. Start up Must cover all Materials and basic expenses even if thats 60%. This saves you from a material bill that is already installed on someone elses home. AlWAYS get start up! If they won't pay the first 50% they won't pay the last 50%.

4) Go to your insurance provider and have them give you the form to have the customer fill out that releases the insurance funds to YOU. This way you don't get hosed on the back end. We are allot allike. Clean shaved, business attire, etc. Your are going to great lenghts to present your self properly. Don't cut yourself short on getting paid.

5) Get the insurance paper work from the customer and try to squeeze the insurance for every penny of the job. Sometimes they allow an extra fee for Ice Guard, full tear offs, etc. If you can get your customer money above and beyond your bid than you have done them a genuine favor and in todays economy thats a plus.

I just took on an insurance job and my bid was 6200.00 for a basic house. The customer was really concerned about their deductible. I simply told them that my price was my price. They asked if the insurance provider only gave them 5200.00 what would happen. I told them they would give me my normal 50% and an additional 1000.00 upon job start up. After further conversation and reviewing their paper work it was established that the insurance would allow for a maximum of 7400.00 in repairs. That is the customers money. It covers their deductible and they actually make 200.00 on the project.

Point being. Don't ever sell your selfshort on any project. Thats your money. Walk away if they won't pay up front. Your price is your price. Your in business to make money. Make money.


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## dougger222

In many hundreds of claims I've only had adjusters write higher estimates than me a couple times. Upon review they added too many squares. 

This is the ONLY time a customer may be able to funds from the insurance company for a roofing job. It would not be fair to me to take money for work I didn't do. 

BTW, both times the office adjuster was made aware of the overage and both times they said they would look into it and they still paid based on the adjusters numbers.

If your bids are less than the adjusters you need to reformat your estimates or just get Xactimate or any other other estimating software geared at insurance pricing.

For the record the only software I've seen write bigger roof numbers than Xactimate is Simsol. I only work with one adjuster who uses it and even when he misses line items he still comes in within Xactimates price for a full line itemized roof.


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## Grumpy

$16k presidential shingle job. Customer told me the job was mine.

I told him: 

" Dan, 

I have decided not to pursue this project any further. I do not have the time to deal with your insurance or warranty situation. You would be better served working with someone who does not mind the extra paper work. 

 Thank you for the opportunity to bid this project, Good luck. "



I just don't want to get involved.


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## dougger222

Grumpy,
I've found it difficult convaying to field, staff, and office adjusters that they owe for a specialty asphalt shingle.

The only way I've been able to get them to pay is to send proof of the shingle on the roof they paid for and go into Xactimate and hunt down a proper line item shingle that coinsides with the both the material cost and labor cost.

What I've also found that works is to hand liturature over to the field adjuster on some shingles so they can document this on the spot. That being said it's worth having old brochures around of shingles that are discontinued.

If your talking Presidential TL's that must have been a smaller house???


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## larryb

This morning at the Minnesota State Capital, as a result of a strong showing by Minnesota contractors, members of the Minnesota Association of Exterior Specialists and others who expressed their strong opposition to the Minnesota State Legislatures matching House and Senate versions of the nationwide "no negotiating" template bill, the bills chief Senate author Gary Dahms (an insurance agent with American Family Insurance) agreed to delete all of the offending "no negotiating", Private Remedy and other language from the bill.

https://www.revisor.mn.gov/bin/bldbill.php?bill=S2137.0.html&session=ls87

1.1 Senator ............... moves to amend S.F. No. 2137 as follows: 
1.2 Page 1, delete section 1
1.3 Page 2, delete section 2
1.4 Page 3, delete sections 4 and 5

Unfortunately, Insurance Federation of Minnesota President Bob Johnson who has been fallaciously and relentlessly touting the bill as "consumer protection" and speciously blaming ad infinitum, premium increases on contractors and public adjusters "who charge too much" on ins claim repair work, still had to make his voice heard one more time before the hearing ended. With the cat being out of the bag, so to speak (MN homeowners are now learning what the P&C ins industry is really up to), I find it hard to imagine that Johnson would not get the message...

Because of who writes his paychecks, I can only assume that he will continue the push to get some kind of "no negotiating" legislation passed sooner or later. Likely, he'll eventually persuade some ins industry friendly legislator to re-write the bill down the road and try to get it tossed into an omnibus bill that will get signed by a Governor who isn't paying attention. But we will be!

Next item on my agenda is to get legislation passed that is truly free enterprise free market and gives home owners their proper freedom of choice: All property owners who pay property and casualty insurance premiums should have a free market, free enterprise choice to decide who they want to negotiate for them, advocate on their behalf and represent their interests when they have suffered damage to their properties. If they want an experienced hands on contractor who knows better than anyone what will need repair and how much it will cost at real true and accurate professional contractor rates rather than typically below market value P&C insurance industry "survey" rates, they should be free to choose that option. If they want to pay a Public adjuster a 10% to 15% fee to do the same job - if they can even find one after a storm, that should also be an option. Although not recommended, if they are willing to trust that their P&C insurance company will fairly and fully pay them all they are owed on their claims at real, true and accurate professional contractor rates, they should have that option as well (good luck with that one).

We did it up here in Minnesota and contractors who band together for this common cause can achieve the same in every other state - if they take action.


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## Grumpy

dougger222 said:


> Grumpy,
> I've found it difficult convaying to field, staff, and office adjusters that they owe for a specialty asphalt shingle.
> 
> The only way I've been able to get them to pay is to send proof of the shingle on the roof they paid for and go into Xactimate and hunt down a proper line item shingle that coinsides with the both the material cost and labor cost.
> 
> What I've also found that works is to hand liturature over to the field adjuster on some shingles so they can document this on the spot. That being said it's worth having old brochures around of shingles that are discontinued.
> 
> If your talking Presidential TL's that must have been a smaller house???


 House was about 30 squares off the top of my head I didn't look it up. It was not TL's, just regular presidentials. I never understood the point of TL's. Alot of extra money for what, and extra layer of asphalt and matt? Sounds like the answer to a problem that doesn't exist IMO.

In this case the insurance was paying enough for the shingle, the old shingle was not presidentials but was discontinued. I was even shocked they were ponying up for ice shield ni the valleys and preflashing around the chimney, that NEVER happens. However the current shingle wasn't properly installed with the metal valleys etc , that you need with a heavy weight shingle, so insurance didn't want to pay and I don't blame them. All in all, I was ok with what insurance was paying except for a few minor arguments, and no dumpster the usual cheapskate tactics. 

The guy wanted me to revise my quote for like replacement minus the necessary upgrades like the aforementioned valleys and some ventilation, so he can compare with the insurance company. I said I would if he signed my contract and gave a downpayment. 

He was also filing a warranty claim with the manufacturer who discontinued these shingles but are still honoring warranty claims. To be honest I couldn't find any hail damage on the shingles, just the soft metals, but the insurance approved the roof before I even got involved. He also wanted me to remvoe a few shingles from his roof so he could send in as part of the warranty claim. I explained I would be happy to give him some when we did the tear off, or he could pay me $160 to send out a worker to remove and replace the removed shingles, or I would do it for free when I pick up the signed contract and down payment. 


All in all he wasn't playing by MY rules. Good bye. I gave him the boot! I don't do nuthin' for free, and wasn't going to spend hours of my time without a commitment on his part. These hours were not marked into the job and would have been chalked up to good will. After insurance and warranty claim this guy would have put a grand in his pocket and got a bad ass roof from us! He didn't want to play by my rules and hired who knows... I do know the guy he said I was up against has bad review after bad review. And I showed him as such. But he was cheaper than us LOL.


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## jmance

to work with an insurance company simply means that you are willing to "negotiate" with a carrier on your client's behalf in order to make sure the insurance carrier pays for the things they should when a roof is on a claim. usually, clients pay their deductible and you make what the carrier is willing to pay.
________________________________________________
Dallas-Fort Worth Roofing


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## larryb

Suppose a customer comes to you and asks you to price a particular job that would cost $20,000 presently (done by a pro who knows how to price their work, earn a good deserved profit that pays for all WC, other ins., admin, advertise, etc) but they don't want the work done until 5 years later when the cost with inflation might be $25,000. You gonna agree to the $20k? Nope.

That's how P&C ins works. In order to stay profitable P&C ins, not knowing when a storm or other damage event will occur, must base their ins premiums on future costs so that if the event occurs 5 years down the road, they'll be covered and still earn a good profit. Since a primary rating agency "suggests" premium pricing (event will occur 5 yrs down the road), although premiums rates will vary, all P&C ins co's will "estimate" the future cost about the same - the $25,000. That number would logically be based on the price that a pro contractor would charge including code upgrades, full O&P, etc. 

Keep in mind that the premium is based (RCV) on total demo and rebuild on, for example, a $250,000 home.

The damage event occurs today so the actual pro contractor cost is $20,000 per the rating agencies recommendation. Already, the P&C ins co has saved the $5,000 they would have had to pay 5 yrs down the road so they are ahead. 

What is the price of the job today? $20,000. What is the price the P&C ins co will attempt to pay? $15k, $16k, $17k?... The same rating agency that advised the P&C ins co's to calc premiums based on future $25k which is present $20k also owns the primary "industry standard" organization that prices repair work. The ins co accepted premiums to cover the job at $20k (current pro price) and the insured's paid the premium but, the rating agency, using their sub company's below pro contractor rates repair pricing, attempts to underpay by, on average, $3,000 - and that's usually after a pro contractor has accounted for all of the damage after the ins adjuster has typically missed some or alot of it. 

The insured paid a premium that covers the present $20k repair value and the ins co attempts to pay substantially less per the rating agencies sub repair pricing that is usually low ball. 

Since that is reality, the $20k repair job has been, in effect, pre-paid. The ins co will still make a profit + the additional $5k they would have had to pay if the event occured 5 yrs later. 

Since the repairs have already been prepaid and the true pro contractor cost to make the repairs is $20,000, why then would any contractor shoot themselves in the foot by "free" estimating the damage at a lower price or allow some adjuster to attempt to underpay the claim? In fact, all contractors should be charging about the same $20k price. 

But, P&C ins companies love contractors who will give out free estimates all day long for substantially less than the $20k. I've even heard some contractors say they don't need as much as other guys (less overhead, ad costs, admin, etc.) so they bid the $20k work for less. 

That's fine with retail work but when it comes to ins repair work, that's insanity. But, because so many thousands of contractors across the country don't understand the vast difference between retail work and ins repair work and how to process ins claims, they leave many millions of dollars on the ins co tables every year.


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## Dallas-Roofing

You are basically already doing what the others are advertising that they are doing. Others will also go back to insurance companies and ask for more money if there are any underlying issues that was not caught up front by adjusters, but that is basically it. When the home owner hasn't done any dealing with insurance companies or roofing, it will all look scary to them. 

Devin Mahdi
Roofing Lewisville TX


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