While I appreciate your insurance advice.. I owned an insurance agency for 16 years. Also over the last 17 years I have personally flipped/owned over 100 properties. Hell, I own 11 of them right now. Needless to say I am well aware of how insurance works, the cost of roofs, construction costs, plumbing costs etc.. so if you all want to continue paying the high dollar roofers and calling John Moore for plumbing issues please do!! They appreciate your business. lol.

Could you send me a msg cadet05

Username @ yahoo dot com

I would like to talk with you about something

Does your company use the old style Real roofing nails? And a roofing hammer? Our neighbors just got a new roof and they used the auto hammers with nail heads smaller than my finger nail. They had just gotten a new roof about 6 years ago with the same small nail heads. Ours was hand nailed around 12 years ago. They had major roof issues and lost numerous shingle pieces with hurricane Berly's 60 mph winds and we had none.

I assume hand nailed roofs are still much better and much longer lasting.

Those in the business, what do your crews use?

We use 1.25" roofing nails and pneumatic coil nailers and 6 nails per shingles unless there is dang good reason to do different. That would be application specific and Ive done it once in 8 years. We will hand nail if a customer wants but there is an additional charge for it. It's unnecessary, slow, exceedingly traumatic for the structure, and introduces a human error into a process that's not needed. Not sure about nail head size, roofing nails have appropriate sized heads be they coil nails or hand nails. Maybe that crew used framing nails? Anything is possible. I see some weird stuff.

If the crew is inexperienced with coil nailers and over drives nails, they will tear off. Coil nailers must be calibrated regularly. Did the neighbors field ahingles blow off? Hip and ridge shingles? Both? Neighbors roof may have used the wrong fasteners, maybe they only used 4 nails instead of 6 per shingle, or crappy shingles, it's nearly impossible to say. Modern shingles at 6 nails per shingle should easily withstand 110-130mph wind without any issue.

I've got a question concerning roofing claims with insurance, figure this is as good a thread as any.

I am having to have my roof replaced due to hail damage. During the Adjuster visit and eventual Estimate from insurance company, they are giving me $33k for the roof repair, $7k to repaint facia and replace/repaint garage doors, and $1200 to restain my fence.

I know there's laws on the books now not allowing for roofers to over estimate the work done to help the Homeowner with the deductible, but how do the garage doors, facia painting and fence staining play into this? Can I pocket that money if I choose not to repair these items? At the moment I am not planning on replacing the garage doors - there are no visible marks/indentions, pretty sure adjuster was just throwing me a bone - and I also do not plan on restaining fence any time soon (this is something I do myself anyways, and just did a couple years ago). I do plan on having the facia, eves, garage doors and other exterior doors repainted. They needed it before the hail storm, so this will be a good use of insurance funds.

Of course the roofer's estimate came in exactly at the adjuster's estimate on roof replacement - that's fine. I'm just wondering what the rules are with the remaining $8-9k for garage doors, painting and staining? Can I "pocket" the remainder after having everything repainted and basically cover my $4,700 deductible?

If you got 8,000-9,000 for garage doors, painting, and staining, and that is the ACV part they sent up front explicitly for those items, then you can use that how you need to use it. Do the doors, paint, or not...up to you.

Once it's in your bank account, its YOUR CASH. Where you run into problems is having recoverable deprecation for those items, requesting it, and not doing the work. That's a problem.

So, if you have a 2,000 deductible, and the carrier has an ACV column for gutters for 2,000, well, you've offset your own deductible. I'll leave it up to you as to whether it's the right thing to do, but if you don't go back to the carrier for extra money on the gutters, and they never send you anything extra, then as far as they are concerned, those items were done. Just make dang sure your roofer is not billing for a penny more than the RCV on your roof section only, or whatever items he is doing.

If/When you sell the house, you will have to disclose to potential buyers that you received insurance proceeds and didn't make repairs. It may also become an item to address if you ever switch to another insurance company.

Why?

Agilaw said:

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If/When you sell the house, you will have to disclose to potential buyers that you received insurance proceeds and didn't make repairs. It may also become an item to address if you ever switch to another insurance company.

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I didn't think the homeowner had to disclose it to buyer… but I think the insurance company registers it in some database that buyers/next insurance company will see and be able to query about. Pretty much every insurance claim in most instances is pretty auditable is the point so proceed with that in mind.

It's a question on the Sellers Disclosure in Texas

Thought that was only flood insurance claims rather than all insurance claims.

I don't have one handy but I remember it being any claim.

They give you a space to explain, so writing that you didn't restain the fence would probably be sufficient.

It is a disclosure. You have to note if you received proceeds for an insurance claim on the property but then did not make the repairs that the claim/proceeds were for. Then some blank lines to explain.

Correct. If you receive insurance money and don't use those proceeds to do the work, you must disclose when you sell the property on the Sellers Disclosure.

That same disclosure also applies to any other award, legal settlement, etc. If you received $$$ to repair damage to a property and didn't do the repair, it's a disclosure item.

ATM9000 said:

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Agilaw said:

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If/When you sell the house, you will have to disclose to potential buyers that you received insurance proceeds and didn't make repairs. It may also become an item to address if you ever switch to another insurance company.

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I didn't think the homeowner had to disclose it to buyer… but I think the insurance company registers it in some database that buyers/next insurance company will see and be able to query about. Pretty much every insurance claim in most instances is pretty auditable is the point so proceed with that in mind.

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That would be incorrect

That same disclosure also applies to any other award, legal settlement, etc. If you received $$$ to repair damage to a property and didn't do the repair, it's a disclosure item

Diggity said:

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it's amazing. seems like half the people can't get their claim approved (whether legit or no) and the other half have $'s raining down on them. What a messed up business.

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That was our street after a storm a while back. My two direct neighbors and I got denied. Everyone else on the street who filed claims practically had their insurance companies throwing money at them.

My roof doesn't leak, but it's old and has some hail damage. I talked to several roofers about it. It's hard to find a roofing company representative who doesn't say you need a new roof, and the result was what I expected. I got bids from some of these roofers, who sometimes characterized them as "cash" or, conversely, "just for insurance."

I then filed an insurance claim. An adjuster came out, and the claim was approved. My initial payment, for the depreciated value of the old roof minus the deductible, is on the way from the insurance company. The plan is for me to get the roof replaced, pay the roofing company and then be reimbursed for the remaining cost of the new roof, except for the deductible.

The insurance company has created an itemized list of roofing items to be covered -- old roof removal, new shingles, felt, etc. -- with prices for each item. These add up to a total that is higher than most of the roofers' estimates for replacing the roof.

So far, so good. BUT...

To compete for the business, the roofing companies promise to provide "extras" such as better shingles or gutters or improved attic ventilation, at no extra charge as a part of a package that still is within the insurance company's estimated replacement cost. The insurance company says it does not cover some things, but its estimated cost of replacing the roof is still more than what the roofing companies put in their non-itemized bids.

Here is how I think the "system" works. Correct me if I'm wrong.

To come up with their replacement cost estimates, the insurance companies consult some database. Using the database is less accurate but easier than comparing bids from roofing companies for each job. As a result, they offer to pay more than the replacement roofs should cost. And maybe -- just maybe -- they err on the high side to avoid complaints from customers who file claims.
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Meanwhile, roofing companies give customers proposals that include work that the insurance companies are supposed to cover plus other things that the insurers have not agreed to cover, without asking customers to pay more than the deductible. But to get the customers reimbursed, the roofers must provide receipts to the insurance companies. My guess is that they prepare receipts showing only the items to be covered by insurance, at inflated prices, and separately promise the extras to customers -- maybe or maybe not in writing. The insurance companies then pay for the covered items at inflated prices, the customers get the new roofs plus extras and everybody is happy -- except all the other insurance customers whose rates are increased to cover the cost of giving claim-filing customers more than the real cost of replacing what they had.

Am I right? Are there, essentially, two sets of books kept by the roofing companies? If so, why do the insurers turn a blind eye to this?

TLDR:

Insurance uses software to price based on closed claims and average pricing for your area.

Keeping multiple books is fraud.

There is a right way to do this.

Your premium is going up because of the weather and not your roofer or neighbor.

justTellMeMore said:

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My roof doesn't leak, but it's old and has some hail damage. I talked to several roofers about it. It's hard to find a roofing company representative who doesn't say you need a new roof, and the result was what I expected. I got bids from some of these roofers, who sometimes characterized them as "cash" or, conversely, "just for insurance."

I then filed an insurance claim. An adjuster came out, and the claim was approved. My initial payment, for the depreciated value of the old roof minus the deductible, is on the way from the insurance company. The plan is for me to get the roof replaced, pay the roofing company and then be reimbursed for the remaining cost of the new roof, except for the deductible.

The insurance company has created an itemized list of roofing items to be covered -- old roof removal, new shingles, felt, etc. -- with prices for each item. These add up to a total that is higher than most of the roofers' estimates for replacing the roof.

...

Here is how I think the "system" works. Correct me if I'm wrong.

To come up with their replacement cost estimates, the insurance companies consult some database. Using the database is less accurate but easier than comparing bids from roofing companies for each job. As a result, they offer to pay more than the replacement roofs should cost. And maybe -- just maybe -- they err on the high side to avoid complaints from customers who file claims.

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The insurance company uses several brands of estimating software, the most popular is the one I use as well called Xactimate. The pricing is updated monthly and reflects the average cost of a roof replacement for your roof in your zip code. The price you see is often higher than you see from cheap roofers. For me, the price is generally in line with what insurance pays. There is a reason for that. As of 2023, there are about 96,500 roofing companies in the US. This does not include Chuck in a Truck with his 12 cousins. Of those nearly 100,000 companies, we are in the TOP 50 in the entire United States. Most companies that are larger are going to be more expensive due to overhead. We have full office staff, we pay for permits, we have been in business for over 20 years, we honor warranties, we have relationships with all of our manufacturer representatives, we carry the TOP certifications for the best shingle brands in the country. The fact is that most of my customers want their home and roof restored with the best products, the best standards, the best techniques, and the best warranties by the best company. Most homeowners do. So much so, that those costs are what are largely incorporated into the pricing structure the insurance carrier uses. I use my truck body shop example all the time. I do not care if my cousin can fix my truck after someone damages it. My deductible is fixed. I use the absolute top notch, best, most expensive body guy I can find at my local dealership to fix it because I only care about the quality of the result and the warranties that come with it. So, yes, you can get Bob and his cousin to roof your home for half what I charge, but you cannot recoup the additional money the insurance has offered in most all cases because of depreciation.

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Meanwhile, roofing companies give customers proposals that include work that the insurance companies are supposed to cover plus other things that the insurers have not agreed to cover, without asking customers to pay more than the deductible. But to get the customers reimbursed, the roofers must provide receipts to the insurance companies. My guess is that they prepare receipts showing only the items to be covered by insurance, at inflated prices, and separately promise the extras to customers -- maybe or maybe not in writing. The insurance companies then pay for the covered items at inflated prices, the customers get the new roofs plus extras and everybody is happy -- except all the other insurance customers whose rates are increased to cover the cost of giving claim-filing customers more than the real cost of replacing what they had.

Am I right? Are there, essentially, two sets of books kept by the roofing companies? If so, why do the insurers turn a blind eye to this?

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Not exactly. No legitimate roofing company is going to keep two books. This is the very definition of fraud.

If I give you a low price and charge the insurance a high price, that is fraud.

If I charge everyone a high price and then give you a check or rebate, that is fraud.

If I so much as charge the carrier for a line item I did not perform, that is fraud.

So, how do I get around this, legally AND help my customer? I invoice the carrier for what they tell me the roof is going to cost. You pay me your deductible. The rest comes from the insurance carrier.

To make this legal, I upgrade my customers. The carrier only cares that I replace the roof within the confines of the money they provide.

So, I have two options:
1.) I put on the same exact roof with the same exact old technology and charge the carrier the full price and make 60% profit on the job while leaving my customer with a technologically inferior roof.

OR

2.) I upgrade. I put on Class III shingles, I upgrade hip and ridge cap, synthetic underlayment, extended warrantied if I can swing them, and I make a reasonable profit while leaving my customer with a far superior roof than they had.

I always hope I get to roof my customers more than once over 30 years, but that may not be the case, so if the next roofer doesn't want to upgrade the customers roof, then at least they have to put on all the upgrades I already gave them and the carrier has to include them in the scope of approved work. That's the law and that's what they must do.

If your scope of work from USAA says the roof RCV is $24,000, I invoice exactly $24,000 minus any items I didn't do. My invoice says "Replace roof - $24,000". I can cram as much good stuff in that as I want. I can give you upgrades, better shingles, free gutters, heck, I can give you another $30,000 of upgrades as long as I eat them all and invoice exactly $24,000. Typically, though, if there is a seriously expensive upgrade added, then the customer pays that part out of pocket and it is listed explicitly as an upgrade and the carrier does not pay for that part.

What I CANNOT do is invoice for extra work and not perform the work, or rebate the money I get to the customer. So, if you get a scope from USAA than says they will pay $24,000, and I write you an out of pocket price for $18,000. I MUST INVOICE THE CARRIER $18,000. End of story.

I love talking about this stuff and discussing it with customers and anyone, so if this doesn't make sense or I have misled anyone with the above post, don't hesitate to ask for clarification or call me on the phone for discussion. I have helped countless Ags with their own insurance that I didn't even roof to make sure they understand what they need and what they are getting.

We can and do get audited by insurance carriers. We install nearly 40 Million dollars of roofing annually across several states. These books and invoices must be absolutely correct and done in the correct manner to avoid fraud or losing the business. The days of the wild west are over if you are running a legitimate long term business.

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The insurance companies then pay for the covered items at inflated prices, the customers get the new roofs plus extras and everybody is happy -- except all the other insurance customers whose rates are increased to cover the cost of giving claim-filing customers more than the real cost of replacing what they had.

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The idea that your insurance went up because you made a claim is a myth. If we get a 2 Billion dollar hail storm, people property will be damaged, and it will require replacement, and most everyone will go through insurance. So, whether you replace your property or not, your premium is going up. Mine goes up. We all pay for it. This is why I encourage anyone with legitimate damage to get your property repaired. This does NOT mean I encourage pushing iffy roofs through the system. Anyone that has worked with me knows I do not send every roof through to a claim. This is not how I operate and not how the system is supposed to work. I am well aware that most new roofers and salesman will do exactly that. They are part of the problem. As I said, I do not operate that way. I am a professional versed in roofing, the claims process, billing, installation, etc. If your roof is good, your roof is good and I will tell a customer exactly that.

I work in Houston, San Antonio, Austin, even Dallas to Uvalde. In your case, the carrier told you it was damaged and agreed to pay for it. The system worked as designed. I would use the absolute best roofer you can find and get the best products you can for your family's home.

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Most companies that are larger are going to be more expensive due to overhead.

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must have missed the phenomenon in B School.

This is where misunderstanding and disdain for the roofing industry and insurance comes from.....

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The insurance company uses several brands of estimating software, the most popular is the one I use as well called Xactimate. The pricing is updated monthly and reflects the average cost of a roof replacement for your roof in your zip code. The price you see is often higher than you see from cheap roofers. For me, the price is generally in line with what insurance pays.

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So, how do I get around this, legally AND help my customer? I invoice the carrier for what they tell me the roof is going to cost. You pay me your deductible. The rest comes from the insurance carrier.

To make this legal, I upgrade my customers. The carrier only cares that I replace the roof within the confines of the money they provide.

So, I have two options:
1.) I put on the same exact roof with the same exact old technology and charge the carrier the full price and make 60% profit on the job while leaving my customer with a technologically inferior roof.

OR

2.) I upgrade. I put on Class III shingles, I upgrade hip and ridge cap, synthetic underlayment, extended warrantied if I can swing them, and I make a reasonable profit while leaving my customer with a far superior roof than they had.

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What about option 3? Invoicing for what a normal job actually costs so we don't have yet another reason for insurance premiums to go up 100% every year?

And these two quotes don't really line up....are you more expensive than smaller local companies because of overhead, insurance, etc. and your price is in line with the software or are you the same price as the cheaper guys but make yourself more expensive because you find a bunch of upgrades to give and put you in line with the software?

I understand and appreciate the disdain.

We don't do the 3rd option because the system allows us to do better and people simply don't accept less than the best they can have. It's a noble idea, but the fact is that when push comes to shove and a customer has to shell out $2,000-$200,000 for a deductible, they want more for their money and I want to be hired. It's basic human nature and good financial sense on their 6, 7 or 8 figure home.

No one to date, over thousands of roofs has said "You know, I want to save my carrier ton of money, put on the bare minimum to satisfy the claim. I want average."

Your ask within this system, is for me to provide a lesser service to a homeowner and charge the carrier less when the homeowner has already been granted approval for me to do better and pays the same either way.

For pricing, the median price is represented in the estimating software for good reason. I don't base my price on their price list. Their price list is based on my price because I am exactly the type of contractor a carrier expects most people to hire.

To your original question, If someone wants the same exact roof with the same products we used 25 years ago, and for me to price and invoice the carrier for that, I will do exactly that. No one has ever asked for that when given the chance.

To satisfy your idea, you can definitely get multiple quotes, hire the one one that fits your perception of what you think it should cost, pay them in full out of your own pocket, and then ask the carrier to reimburse you following inspection. That's an option you have.