How Do Roofing Companies Work with Insurance Companies?

It’s so expensive and stressful to restore your roof after natural disasters, but you can make it easier by hiring roofing companies that work with insurance claims. You need a roofing company to repair your roof damage and your insurer to foot restoration costs. So, how do roofing companies work with insurance companies? 

Most insurance companies will have a list of providers they’ve designated as “Preferred” or “Participating”. The roofing companies listed often bargain rates with the insurer and must have the necessary licensing. Some insurers offer incentives so you hire their preferred companies, like fast-track claims and discounts. 

This post should help you understand how roofing and insurance companies collaborate. It will break down the roles each of them plays in this process so you can understand better what to expect if you ever need to navigate it yourself. Let’s start!

The Relationship Between Roofing Companies and Insurance Providers

Licensed, reputable roofing companies often establish working relationships with insurance providers. When natural disasters damage properties in an area, these roofing companies will contact their network of insurance providers to offer roof restoration services.

Insurance adjusters may also have preferred roofing companies that they work with regularly. Although it’s a homeowner’s right to choose their preferred roofing company, insurance adjusters may try to steer them toward their preferred choice.

As mentioned earlier, insurance providers want to keep costs down. They may not be keen on paying for a more expensive contractor, no matter their reputation or the quality of the materials they plan to use. They may also have pre-negotiated rates with a network of roofing companies they trust. 

The reasons an insurance company may not want to work with one contractor over another may be:

• An issue with lacking credentials.
• Rates that aren’t on par with the area’s average.
• A history of poor communication issues.
• Scope creep (where they’re hired to do one thing but keep applying for more funding for other issues they want to add in there).

If you choose to hire your own contractor for repairs despite their recommendations, the insurance company may require estimates from two or three other local contractors. They will then compare all the estimates and typically offer to cover the cost of repairs up to the amount of the lowest estimate. This means that if you still prefer to use your chosen contractor, you’ll be responsible for paying the difference between their estimate and the lowest one.

In some cases, the insurance company may be willing to pay an average of all the estimates received or an amount matching the estimate given by their preferred provider. There’s also a possibility they might approve your contractor’s rates altogether, covering the full repair cost.

Policies vary from company to company so you’ll need to get the specifics of your policy to find out the specific terms you’ll be obligated to.

To Be Made Whole Again

Insurance policies are meant to safeguard you from covered losses, and insurance companies disburse compensation to make you whole again. Basically, insurers aim to compensate you only for the loss you suffer due to an unforeseen event. 

They take extra care to ensure you don’t profit from the loss, which could potentially lead to fraudulent claims. So, depreciation factors are a huge deal in insurance. 

Typically, depreciation means your asset loses value over time, so paying you the full value of a new asset makes you better off than you were before the loss. This principle applies to all insurable assets, including your:

• Home.
• Car.
• Personal belongings.
• Commercial assets. 

The good news is that depreciation concerns only tangible assets, so this principle does not affect damages to people or their health. 

The other good news is that home insurance companies factor in depreciation a bit differently for costly operations like roof restoration. 

Understanding Replacement Cost Value (RCV)

The value of your property depreciates with age and use. For example, your roof loses its value as it ages. Most roofs have warranties for about 20-30 years. A 13-year-old roof is worth almost half the price of a new roof. 

When buying a homeowner’s insurance policy, you can choose either the usual Actual Cash Value (ACV) or its upgrade, the Replacement Cost Value (RCV). Both alternatives are fundamentally different in determining the value of your assets at the time of loss.

• ACV policy factors in depreciation, so the insurer pays you what your asset is currently worth, reducing payouts and allowing insurers to offer lower premiums.
• RCV policy covers full replacement or repair costs. It first pays out the current value of the asset so you can pay a deposit for restoration, and it only pays the depreciated value when you submit a receipt proving you spent money on the repairs. 

If roof restoration covered by home insurance was an ACV policy, how would you afford to replace the 13-year-old roof after hail or lightning damage? In that scenario, you’d be paid less than half the cost of a new roof, leaving you to cover the rest out-of-pocket. 

How many homeowners can afford half the roof replacement costs when paying out-of-pocket in an emergency? It would be a huge financial burden for most people. Even if the insurance pays out faster than it takes to repair, you still have to pay out more. 

Choosing ACV may seem appealing with lower premiums, but it’s unsuitable for old or expensive homes, as depreciation quickly eats into your payout. 

Why You Need Reliable Roofing Companies to Help Work with Insurance Adjusters

1. Knowledge of Insurance Processes

For starters, experienced roofing companies have an in-depth understanding of the insurance process. They know what information is required by insurance adjusters and how to present it in the most effective way. 

Armed with this knowledge, they can provide a comprehensive damage report to support your insurance claims. Moreover, reputable roofing companies often have prior experience working with various insurance providers. 

They possess valuable insights into their specific processes and requirements. Such knowledge saves you from the hassle of trying to figure out complex insurance jargon and procedures on your own.

2. Skills for Identifying Invisible Damage

Most homeowners lack the necessary skills and tools to quickly and safely identify all the dents on their roof. You could easily overlook hidden damage, leading to costly repairs in the future. You could also downplay the damage and end up with insufficient insurance coverage.

Pro roofing companies have well-trained staff who can identify all types of damage, including hidden ones. They know what to look for and use specialized tools to assess every inch of your roof. 

Once the contractor finds damage, they’re going to want to do something to mitigate that damage while the whole process plays out between them and the insurance company. They’ll patch it or install a tarp or some other temporary fix. 

The idea is to prevent damage from compounding. You don’t want moisture coming in to cause mold and mildew damage.

Sometimes the contractor will need you to pay for this repair. You can submit it with the estimate to your insurance company, and most of the time, they’ll repay you for that expense.

3. Ignorant or Biased Adjusters

Insurance adjusters are human, and as such, they’re prone to error. Some may approve your claim but at an unfairly low amount, especially if they miss some damage that’s hidden. These scenarios can be frustrating, especially if you don’t know how to appeal the decision.

A reliable roofing company acts as a mediator between you and the insurance adjuster. We prefer you call before even reporting the roof damage. 

They’ll come and evaluate the damage, take detailed notes, and provide photographic evidence to support your case. We also recommend you have them over when the adjuster pays a visit to ensure they don’t miss any crucial details. 

Negotiating insurance settlement property damage with an adjuster is a slippery slope, but a seasoned roofing company on your side gives you a fighting chance. We advise that you record the negotiations between your insurer and contractor. Also, get the adjuster’s agreement on record to avoid future disputes. 

4. Partial Financing and Prudent Use of Insurance Money

If your insurance claim is approved, you’ll receive the actual value of the roof after covering any applicable deductibles. The insurer then withholds the depreciated value of your roof until you prove you restored the roof. 

Ideally, the insurance company should refund all the money you spend restoring your roof. The upfront payment of your roof’s ACV is never enough to cover all the restoration costs, but it’s usually enough to get you started. So, established roofing companies will take your deposit and start working. 

The withheld sum (the depreciated value) helps make sure you actually get the roof fixed. You don’t get it until you have proof of the restoration costs. So you’ll need to follow up with the insurance company with receipts. 

This arrangement works in your favor because:

• You don’t have to pay the whole sum upfront, which can be financially straining.
• You get quality services without compromising on the materials used or workmanship.
• Your insurance money is well managed and goes towards restoring your roof.

Go for Roofing Companies That Work with Insurance

The typical homeowner’s insurance claims process can be complicated, but with the help of a roofing company, it becomes more manageable. These companies handle all the paperwork and negotiations with the insurance company, leaving you to focus on rebuilding your home.

Work with a reputable and experienced roofing company for proper roof restoration and efficient insurance claims handling.