Roofing Insurance Information

** A homeowners goal in a roof replacement approved through insurance (now that the ***two check system is used) is to get the best roof possible for the replacement cost value amount as determined by the insurance adjuster. The adjuster determines this amount by using the Xactamate estimating software suite, which sets fair market value pricing based on project location for insurance remediation projects. All insurance companies use Xactamate for calculating remediation project costs/payouts for all construction trades.

*** The two check system was implemented due to many homeowners going with the lowest bid they could find in order to fully (or partially) cover their deductible, as the funds were issued in one lump sum payment immediately following claim approval in the past. This resulted in numerous extremely bad roof installations, many by unlicensed contractors, which then led to significant interior water damage within a few years of the new roof being installed. Insurance then had to pay out significant sums of money to those policy holders to pay for interior water damage repairs.

The two check system was also implemented to assure homeowners were paying a portion of the repair costs (their deductible), and therefore had some “skin in the game”. This helps to keep the number of frivolous claims at a minimum (one of the main reasons most health care insurance plans include co-pays when visiting your family doctor, same principle).

For a contractor to “cover the deductible” within the confines of the current two check system, the contractor must submit falsified documents (they send the insurance company a final invoice amount higher than the actual amount the homeowner is paying the contractor) which is a federal crime. Unfortunately many contractors still operate this way in lieu of the fact that it is insurance fraud and illegal. Following a large hail storm, I have actually seen signs from “roofers” (unlicensed, out of town companies swooping in to take advantage of people) stating they cover deductibles on the side of the road!!! Those signs are taken down by the proper authorities pretty quickly lol. I wonder if the person that put up the sign really even understood what they were advertising is illegal, as i still have to explain the newer two check system to INSURANCE AGENTS from time to time (different part of their company handles the claims and payment processing, so a lot of agents have no idea the claims payment methodology changed).

On top of all of that, insurance companies are not trying to pay more than the fair market value so if a contractor is covering the deductible, they are either offsetting the cost by using cheaper materials, not paying the crew fairly, or don’t have the proper insurance coverage.

We obviously don’t play those games. What we do instead is offer some upgrades and additions above what the insurance scope covers where possible. We are able to do this by keeping our overhead extremely low. We let our installations do the advertising for us.

Here is a link to a website that does a better job of explaining how it works than I do. Please disregard the title of the article, as you at no time have said anything about your deductible being covered by whomever does your roof……the article just does a great job of explaining the two check system while addressing the cover your deductible aspect of insurance claims.

On the flip side of all of that, if the repair cost comes in at $5000 or lower….. most insurance companies still issue one lump sum check upfront then. In that case, you would want to get estimates from trustworthy contractors, since you could minimize your out of pocket costs if you get an estimate under the insurance calculated amount.

If the State Farm Estimate comes in at a price higher than ours, we will match their price and keep your total out of pocket cost equal to your deductible.

If additional trades get invoiced in the claim (gutters, metal fascia wrap, etc), then there ARE ways to cover or minimize your total out of pocket costs legally. Basically it has to do with insurance doesn’t really care about items that don’t increase their risk factor being repaired. If you don’t replace a gutter with dings in it, you aren’t going to be at risk for additional damages that insurance covers. Its extremely confusing I know, and we can cross that bridge if we get to it.

Confused yet lol? It honestly scares me how other roofing companies manage claims, because as you can see above it can be an extremely complicated process. You really need a roofer that you can trust due to the numerous “games” that go on with insurance work.

Thanks and please let me know if you have any questions!