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Roofing Insurance Claims

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There’s a lot of confusion when it comes to hiring a roofing contractor for insurance claims, so we thought we’d clarify a few things that will typically happen during this process so you can know what to expect.

The first thing that usually happens is a roofing contractor gets on your roof to inspect for storm damage, which in Colorado is going to be classified as either wind or hail. You can call a roofing company to come out and inspect your roof, or you might get those ambitious door-knockers who are willing to jump up and do it on the spot. As the homeowner, it’s your prerogative to pick which company you want to ultimately go with, but keep in mind that there is an expectation that a contractor who offers you his time for free will earn your business. A responsible roof inspector is looking for 10-12 hail hits in a 10×10 square on four faces of your roof, or a substantial amount of wind damage, affecting approximately 1/3 of your roof. He will also take pictures of his findings to show you.

Once you know that there is substantial damage on your roof, the next step is to call in a claim. This is a very simple process in Colorado. Argive Roofing even provides our project managers with a spreadsheet of claims department phone numbers for the most common insurance companies. Make sure you tell them a roofer looked at your roof and said there is a lot of damage; feel free to add that you are uncomfortable with the damage (it’s your insurance company’s job to keep you covered and comfortable with the state of your property). Your insurance company will start a claim, give you the number, ask for a storm date, and tell you that an insurance adjuster will be contacting you within 48 hours.

At this point, you can sign a contract with your roofing contractor. From here on, he will be helping you along the whole process of getting you a new roof, including representing you to the insurance company. This is why selecting a responsible company is so important, because it’s more than putting a roof on — there are a lot of administrative duties for the contractor to fulfill on the insurance side of things. Make sure that the contract says you’re only paying the roofing company the insurance proceeds plus your deductible. The contract should clearly state that it is null and void if the insurance company doesn’t pay anything for the roof.

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The next thing that happens is an insurance adjuster will come and inspect your roof. You want your roofing contractor on the roof with the adjuster to represent you. That’s not to say that adjusters are unscrupulous; just that they like to see what the roofer is seeing, and some of them may not bring their own ladders. The adjuster will file his report with the insurance company and they will decide whether to pay our for repairs, or total the roof and pay out for a whole new one.

If they buy the roof, they will send you a check, called the ACV (Actual Cash Value). This is how much they believe the roof is valued at right now, and they will pay out the second half, called depreciation, when the job is done. Both of these checks are for the contractors to fix the damage to your home. You are responsible for signing these insurance checks over to the contractor and paying him your deductible. That’s it.

Now, there are a lot of misconceptions when it comes to “shopping around” for a roofing contractor on an insurance job. Here’s the truth: you’re paying the same amount no matter who you hire. You’re paying your deductible; the insurance company is paying for the contractor. Your insurance company might encourage you to get multiple bids, but that’s to save them money, not you. Think of it this way: you can get the Audi R8 roof or the Ford Pinto roof and the insurance company is paying the same proceeds, and you’re paying the same deductible. So find the company that will take care of you, give you extra upgrades, and the one that just has nice people. You don’t benefit at all from taking that gruff, two-man crew who will drop $4,000 from their estimate to get the job. Since the insurance company is paying for the contractor you choose, you’re only saving them money by getting a cheap roof. You really don’t even need to see an estimate from a roofing company on an insurance claim, since they’re doing the job for whatever the insurance company is paying out, and any discrepancies will be worked out between the insurance company and the contractor without impacting you. You will NEVER be responsible for making up differences in estimates — and your contractor should make sure you understand this.

A word of warning: never trust a roofing company that offers to waive or rebate your deductible. This is a corrupt and underhanded attempt at making the job cheaper for you, but it is insurance fraud. This is a misdemeanor for the contractor, but a felony for the homeowner.

If you go with a solid local company, which is ideal if you like supporting local business, then they will likely require your ACV check in order to buy materials, a dumpster, and pay a crew. As much as we’d all love to pay for work after it’s done, it’s unreasonable to expect a small business to front all the costs of putting a roof on. As long as you have a signed contract, the contractor is legally obligated to complete the work, so don’t be afraid to give him that check. If you have a mortgage company, they will have to endorse the check as well, which could take a couple of weeks. One way to make things easier and speed the process along is to deposit the insurance checks into your own account and then write a personal check to the contractor for the amount — that way you have a nice paper trail to show where the money went.

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At this point, the roofing company will put the roof on. For an average-sized American home, it’s reasonable to expect this to take a couple of days. After they’re done, the roofing company will invoice your insurance company for the final check, called the depreciation check. This will be mailed to you, and the full amount must be given to the roofer, since that is the remainder the insurance company is paying out for the new roof. If your city requires an inspection, then the roofing company should schedule that and meet with the inspector to make sure the roof passes.

Your roofer may also inform you that he is “supplementing” or “requesting supplements” from the insurance company. All this means is that the insurance company did not pay out for all the things necessary to replace the roof, or to bring the roof up to building codes, and the roofing company is filing paperwork with them for that extra money. This does not involve you at all, except that the supplement check will be sent to you (sometimes included in the second check, and sometimes as a third check). All you have to do is sign that check over to the roofer like you did with the previous two checks.

Sometimes, homeowners believe these checks are theirs. However, they are, in fact, insurance proceeds to be paid to your contractor. The insurance company has worked out how much a contractor is to be paid and writes these checks out to pay them. Importantly, homeowners who pocket this money or spend it on other things are committing insurance fraud, and risk liens being placed on their homes and felonies on their records. If you research a solid roofing contractor, though, they will get you the best possible roof with those insurance proceeds. In the end, you’re getting a brand new roof, and all you’re paying is your deductible.

No matter how you look at it, it’s a great deal!

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