Been hearing an add from a local company about replacing weather damaged roofs and they said that they will work with the insurance company to get the maximum reimbursement that you can get. And that they will handle all paper work.
That differes from what I have seen comments here that many of you are roofers and the if, how, when, where, who the client gets any insurance money or how much.
I looked up the company and see that it is not just a roofer, but a full service remodeler and also has an insurance repair operation.
http://www.brownrestoration.com/
So it might not be that all companies can do the same.
But I like the way that they advertise that they solve people roof problems, not just put shingles on the roof.
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
Replies
I've always said that there is a huge opportunity in insurance repair and it's all not just tire kicker stuff. I've been victimized by tire kickers too, early in my career, but I've also done quite well on very simple stuff.
In fact, we just signed a 4800 shower repair that is an insurance repair job. We've got money budgeted for mold inspection and a clause that allows extra charges if mold is discovered. We had one conversation/document with the insurance company but acted on behalf of the client to get exactly what we bid the job for.
Bob's next test date: 12/10/07
Jim,
There a relatively new laws about who can handle mold problems here in Texas. The rules were passed about two years ago. I read the rules and decided I simply would not get involved in mold stuff, particularly if it was with insurance companies. Also check your liability insurance. Mine excludes any mold related issues.
I cannot remember the agency responsible-either TCEQ or TDH.
Bruce
Thanks for the warning. I'll look into all of it. Bob's next test date: 12/10/07
Bill,
The first time I bid insurance work, I was recommended by the agent. I
threw out a bid that was much higher than I would have bid normally, maybe 50-75%.
Turned out I was low bidder and I got the job.
I made easily $150 an hour on that job.
The problem? After I paid for material, a dumpster and the help? I got paid about 5 months later.
Every insurance job I did after that was the same. I made mad money. Then waited to get paid.
Ya gotta do some leg work and find out what estimating system the insurance company uses and try to get inside of it. Then you'll know if you can make money.
Your high bid covered your carrying costs. Your carrying costs for one year on $136 at 10% interest would be $13.60. That's how your $150 per hour ends up when you look at the gross profit. Of course, if your cost of capital is less than 10%, then the gross profit per hour increases.You have to ask yourself: "Would you rather get paid promptly at the rate of $65 per hour or get paid $150 per hour and wait a year." I'll pick the $150 and wait the year. Carrying costs are a normal component of MOST business plans. Most tradesmen don't factor them in because they start their business up under-capitalized and can't afford to carry the accounts receivable. A plan like that is bound to force poor business decisions and negatively affect the bottom line. I know...I've been there many times! Bob's next test date: 12/10/07
blue-- definitely double check on the mold issue.2-3 years ago i recieved several notices from my insurer telling me that mold issues are excluded from my policy. also-----I agree there are opportunities in insurance work--just not opportunities I want to pursue.basically--- i think the insurance market would depend on a steady stream of low margin work( making it up in volume and escalating the project with extras.)
I prefer an erratic stream of highly profitable work. that's my temperment.
I notice near me that there are several good sized companies that specialize in insurance work--BUT they don't compete for any OTHER type of work.
i am not really set up to compete for THEIR type of work either.
Stephen
It's only low margin if you price it that way.Thanks for the heads up on the mold issue. Bob's next test date: 12/10/07
jim- i say it's low margin--because if the insurance company tells the homeowner they only"allow" $260/sq.but i have already done comparable houses on either side of the homeowner in the $450-$550/sq. range--with zero problems--where do i want to concentrate my efforts??????
I "could"----cut my price and sub the work out to un-licensed, un-insured subcontractors--------cut my level of service and slam the work out--and maybe clear a few sheckels------but what does that do for me in the neighborhood??--it ruins what i have spent 20 years developingOR- i can ignore the insurance work---continue selling in the $450-$550 range emphasising the level of service and EXACTLY what I do to the prospective customer---who probably came to me via a referall from someone else I already served at the same rate. Basically- i would rather do fewer projects for more money MY way---than do more for less--someone elses waywhich is not to say that someone ELSe can't set up a business to operate in that $260/sq. market-- it just that I am not interested in it.Best wishes, waiting for the rain to stop
,Stephen
I think you think that I'm forgetting the first rule of signing the contract. The contract is with the homeowner...not the insurer. So, we give the price at exactly the margin we want. In your case, you would still give a proposal at $550 per square. The insurer might only pay $220, but the homeowner would have to cough up the remaining $330. The point is that we don't change our margins or business model simply because there is an insurance benefit involved. We sell our services at whatever price we know that we can be profitable. The key word is "sell". That means, we might have to point out the risks of using the lowest common denominator to meet the unreasonable price that the insurer wants to pay. Then, we explain why our services might be a better value even if the client has to come out of pocket. Realistically, you are asking all of your clients to come out of pocket at $550 per square. I dont' see why it would be harder to ask them for $550 knowing that a large percentage of that is "subsidized". Bob's next test date: 12/10/07
Edited 6/4/2008 10:12 pm by Jim_Allen
blue,over the next 5 weeks or so-- i will be finishing up a glut of work brought on by a hail storm 6-8-07hail storm equals insurance company involvement. prior to the hail storm-- i had managed to get my closing rate up over 50%---at the margins i already discussed.after the hail storm--closing rate was under 10% however----out of sales actually closed--almost 100% are people i have some previous contact with--previous customers, neighbors, relatives of previous customers etc. focusing on insurance work--would mean I surrender my natural advantage( people i bat .500 with--and put me in play with people I bat.100 against.
It's a low percentage plan
remember the 80/20 rule????--- i intend to continue commiting my resources to the people who actually pay my bills- and not spend endless hours providing free estimates to people I have a low succcess rate againstremember-- the insurance company has already "poisoned the well" telling the homeowner they only "allow" $260/sq.---THAT creates the price in the homeowners mind---and it is VERY hard to overcome that preconception WITHOUT my built-in advantage of a previous relationship.
much better for me to go from enthusiastic referall to enthusiastic referall servicing the HECK out of those customers----rather than trying to talk people into paying more than what the insurance company has already pre-sold the job at!!!!!! looks like the rain stops today---gotta run,
stephen
"emember-- the insurance company has already "poisoned the well" telling the homeowner they only "allow" $260/sq."Thats an excellent point...one that would be very hard to overcome. Bob's next test date: 12/10/07
i'm familer with ins. company and auto body repair and it may work differently than home ins.
so your charging 550 a sg for xyz shingles, are the other ligiate roofing co's in the 250 range or are they in about the same dollar amount as you?
in the automotive end the ins co.may say they pay 35.00 a hour flat rate but if the prevailing local rate is 55. all you do is make a call and they adjust it. they don't/can't make you take it to joe scmoes that has dirt floors in his shop just cause he's 35 a hour. if 50-60 hour is the local range of labor rates,they will pay the 55 no problem. in the auto field if you took away the ins work 95%of all body shops would close down,there just isn't that many people that will pay out of pocket for repairs.larryif a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
from what the insurance companys told me they track installed roofing prices across the nation--and have it broken down by zip code
they are only "allowed" to pay the " average price per square" for that particular zip code.Very roughly-- they want to pay the same price per square to have a couple un-insured jacklegs roof a 2 car garage------as they pay a fully insured, fully equiped company roof a 3 story house currently covered with 2 layers of 3 tab shingles over one layer of slate with extensive(expensive) landscaping surrounding the home. the insurance company "allows" a little bit additional for 2nd story work, a little bit for a 2nd layer tear-off-----what they "allow" for a roof vent---does not cover the material cost of the roof vent--let alone installationthey "allow" $40 to flash a chimney
( typically I spend 3-4 hours re-flashing a chimney--grinding mortar joints, bending metal on a brake, wraping the chimney in icegaurd etc.
$40 allowance--is how the jacklegs and stormchasers get away with face nailing mill finish aluminum over the bricks and smearing tar onto the mess---there is not enough money to do it properly at $40/chimney in my neighborhood----many of the houses were built in the 1920's--before icegaurd was invented.-- the insurance company does not "allow" money for icegaurd--despite the fact that I MUST use by code( apparently the insurance company expects me to donate the icegaurd to the homeowner.
insurance company "Allows" 15# felt---but I use titanium UDL--which is approx. 4-5 times as expensive as 15#-and infinitely superioralso--the insurance adjustor wants the contractor do do a large part of the adjustors job for him all in all--insurance work simply isn't worth it to me
i prefer to concentrate on customers already familiar with my services and who are prepared to pay my customary charges---so I can deliver the same caliber of roofs I have always tried to deliver-----rather than cut my standards in order to save the insurance company a few dollarsbest wishes,
stephen
Steve, I was reading another forum, and they were talking about rates that ins. co. pay. On the face it looked a lot better than you are thinking.
Of course, you don't need the work, but some others may.
frammer-- i am commenting on the segment of it that i know really welland--as i pointed out earlier---- locally we have a couple fairley large, well known companies that ONLY do insurance work---they specialize in it.so---like everything else-- I suspect the money is in specializing-----but it's not the market for me.Realistically----- if I needed work--- i would look at what everyone else was doing---and do the opposite.specifically--in the current market--everyone else is terrified of buying a junker house for renov. ?-------Starting in august--among other things that is what I will be searching for--the right junker house.stephen
I will be looking in the fall myself. We haven't really been affected all that much, yet.
We don't seem to have the problems with the 1005 loans as most people here think of their house as a place to live, investment not so much.
stephen
just to clarify a few things for you. the insurance company is responsible to put the roof back exactly as it was.
if the owner didn't have titanium UDL or ice and water shield prior to the loss, then the insurance company isn't responsible for paying for that.
no, you don't have to donate it, it's the homeowner's responsibility to pay out of pocket for what they didn't have, if you as the salesman can sell them on it.
many policies allow for "code upgrade" items like iceguard to be covered and paid for.
your time flashing the chimney may be well spent, but again, if the owner didn't have counterflashing in cut reglets then the ins co won't pay to do it.
i feel your pain, this is what i do every day.
carpenter in transition
"many policies allow for "code upgrade" items like iceguard to be covered and paid for"I have that as a rider. IIRC it is something like $10-15 per year..
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
and well worth the $10-$15
the rider could be worth up to 10% of your policy limit
we just repaired a home damaged by fire where the code official required egress windows be installed in the bedrooms. the home had brick veneer which had to be modified.
homeowner had to pay out of pocket
carpenter in transition
tim,
i am absolutely and perfectly aware of that.but-- i do what i doIf i am going to do the project THIS is how i am going to do it!so--essentially every project i do---is an upgrade over how the existing roof was done even when new.To pursue insurance work--- I would have to stop---doing what I do!all the roofs we are doing this year--as a result of a hail storm last YEAR-- I would have been doing sooner or later anyhowlook at it this way--------you know the proper way to cut this joint is to cope it----but the insurance company tells you they are only "allowing" a miter------do you bow to the insurance company and miter it??????--or do you simply pursue customers who have faith in you and accept the situation when you tell them that you insist on coping the joint?
Keep in mind that a roof is about the last thing consumers want to spend money on--and when the insurance company tells them that $260 a square is"the going rate"----80% of consumers are going to look for a contractor to bring their project in at $260/sq.--regaurdless of the consequences.My market is the other 20%----people smart enough to be willing to wait a year or more to have their project done by someone they TRUST--and if they have to pay a bit more for that--they are happy.
If I have to cut my standards--in order to bring it in at $260/sq.--well there goes that trust I spent 20 plus years developing.
I will still be here 20 years from now----but the storm chasers have already left--to go back to whatever rock they crawled out from under in the first place---phones disconected--homeowner left holding the bag----but I am still here--and will be for quite some time. i have ZERO incentive to cut my standards--and in fact am constantly looking for ways to do things better--and more expensively.----that removes me from the insurance market, pretty much, LOL Very best wishes,
stephen
.Most tradesmen don't factor them in because they start their business up under-capitalized and can't afford to carry the accounts receivable. A plan like that is bound to force poor business decisions and negatively affect the bottom line. I know...I've been there many times!
Sounds like the formula I used in the mid seventies for my short trip to the bottom.
Yes, it's an easy ride down isn't it?! Bob's next test date: 12/10/07
When we lived in Kansas we had a pretty severe hailstorm just before I sold our house and moved to another smaller sub div down the street. We has some roof repair and replaced a hot tub cover from a softball size hole.
The house we bought had shake roof like our other one and it looked ok. They were replacing the one across the street and their estimator asked if we would like for him to check ours. He did a photo essay and presented it to the previous owners' Ins Co. Ended up with total new roof and not one penny out of pocket.
An acquaintance was at a gas station and someone ran through the storefront. Asked him to close it up, then asked him to repair, said he was too busy, they said just do it. He made unholy $ on that one.