Do I Need to Get Estimates for Insurance Claims?

Getting estimates for insurance claims

Home Insurance Storm Damage Claims

Should I Get Multiple Estimates for My Hail Damage Insurance Claim? 

When it comes to hail and storm damage, getting estimates for insurance claims is not necessary. At Colorado Superior Roofing & Exteriors we’ve dealt with thousands of wind and hail damage insurance claims over the past two decades. This is probably the most misunderstood aspect of the entire process. Insurance agents and adjusters will often tell clients that you’re “pre-approved” for a certain amount and then ask you to go get estimates. What most people don’t understand is that only benefits your insurance company and may not be in your best interest.   

After your insurance adjuster comes out and approves your claim, they will provide you with a detailed document called an insurance scope. The insurance scope lists line by line everything the insurance company has agreed to pay for.   Each line item will also have a payment amount associated with it.   However, regardless of the total amount of the insurance scope, insurance companies will only pay for expenses you actually incur.  What that means is that they will pay the lesser of (i) the total insurance scope amount and (ii) what you actually pay to have the work done.  

Sample Hail Damage Insurance Claim

So, let’s say that you’ve received a storm damage insurance scope that lists a “pre-approved” roof replacement cost of $20,000. The insurance company will give you part of that money upfront (based on the age of your roof).  They will give you the rest (minus your deductible) after the roof is replaced.   Let’s assume they give you $10,000 upfront. Let’s also assume that after gathering multiple estimates you find someone who will replace your roof for $17,000. Logically, you’re now thinking that you are going to get to pocket the extra $3,000.   However, that is simply not the case.  Your insurance company will only pay a total of $17,000 (minus your deductible) because that is the expense you incurred. 

In this hypothetical, your contractor will submit a final invoice for $17,000 to your insurance company. Your insurer is not going to give you the additional $10,000 (minus your deductible) listed in the scope.  They are only going to give you $7,000 (minus your deductible).  The only way to get around that is to commit insurance fraud by submitting a fake invoice.  So, going with the lowest bid brings you no financial benefit, and can lead to other problems as well.    

Why Getting Estimates for Insurance Claims is a Bad Idea

In addition to receiving no financial benefit for getting estimates, you are likely compromising the value of your claim.  With storm damage insurance claims, the insurance scope is essentially just a base projection of costs that usually doesn’t include everything.  Adjusters come from all over the country and they do not know every local building code, so they’ll write up an estimate for a basic roof to replace what you currently have.   Oftentimes they won’t include required local code items like ice and water shield or drip edge.   They rely on your contractor to include those things.  There may also be additional pre-existing upgrades on your roof the adjuster can’t see like synthetic felt.   Furthermore, there could be insurable code upgrade items that will need to be covered, but that are not included in the initial scope, like replacing space decking.

Stormy sky Colorado

Share Your Insurance Scope with your Contractor

Most insurance companies use a software program called Xactimate to determine the market rate for repair services. That’s how they come up with the line items in your insurance scope. Contractors have access to this same software, so the price is no mystery. However, without a copy of your insurance scope, it is very difficult to give you an estimate.  That’s because your contractor doesn’t know what the insurer agreed to cover or what they may have missed. Most experienced, reputable, roofing contractors will agree to do the work for the price insurance is willing to pay.  They will also submit supplement requests to make sure your insurance company pays for any additional items you are entitled to.   Your contractor should also work with your insurance and mortgage company throughout the process to make sure everything is properly documented and all funds are released to you.   

If your contractor has your insurance scope, they can make sure that everything is properly covered.  They can also contact the insurance company to include any missing items.  This increases the value of your claim, and thereby increases the value of your home.   If you have a standard insurance policy your only out of pocket expense will be your deductible.  That means you are going to be paying the same amount no matter which contractor you use.   So, interview a few different roofing contractors and hire someone you are confident will do a quality job, offer a great warranty, and is likely to still be around for the duration of the warranty period.

Conclusion

For most people your home is your largest investment. You want to make sure you are working with a quality contractor. That’s why getting estimates for insurance claims and making a decision based on price makes little sense. If you hire the company that provided you the lowest estimate, all you’ve done is save your insurance company some money and most likely gotten a lower quality roof than what you’re entitled to. Ultimately your only out of pocket expense is going to be your deductible no matter who you hire. Since you’re paying the same price no matter what, shouldn’t you get the best roof possible?

If you would like more information about hail and storm damage insurance claims please give us a call.  Colorado Superior Roofing has been around since 2002.  We are A+ rated with the BBB and preferred roofers with Team Dave Logan

 

 

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