How Roofing Companies Can Raise Your Premiums
Any industry involving insurance is highly susceptible to fraud.
The roofing industry is no different.
In fact, we wrote an article outlining how roofers most often commit insurance fraud.
But let’s say a roofing contractor doesn’t commit fraud, but simply is unethical in their affairs. How does their lack of integrity affect homeowners and ultimately affect your premiums?
How Roofers Gouge Insurance Carriers
Most roofing contractors use an industry-wide and insurance carrier approved tool called Xactimate.
There is very little wiggle room for negotiations because the prices are usually set in stone and very fair.
Where a roofer can take advantage of the system is in the “scope of work”. For instance, they might:
- Add things that are not necessary or crucial to complete a job (ie wheelbarrow cost, supervisor fee for a “standard” roofing project)
- Exaggerated labor hours for certain tasks
- Pricing for certain trades is exaggerated (such as painting, siding, etc. and pocketing the difference)
This process of supplementing a claim leaves a lot of room for dishonest roofing practices. And since there isn’t a great system of checks and balances, many roofers can get away with it.
Why This Causes Your Premiums to Rise
When a roofing contractor puts exorbitant price tags on variable items, it can easily be overlooked by adjusters and approved.
How do we know?
We’ve worked closely with several adjusters who have told us this information. When we quoted for certain fees such as delivery, these adjusters would comment on how significantly lower our quotes were than other roofing companies.
This actually caught us off guard when we first heard it.
Then he mentioned that other times a roofer will add potentially exaggerated fees such as a $1,200/day “supervisor” fee.
So when dishonest contractors pump up the total cost of a claim in an unethical way, the insurance company has to find a way to pay for that.
Oftentimes, insurance companies make up this difference by increasing premiums.
Finding a Reputable Roofing Company
At Absolute, we always urge homeowners to do research on any potential roofing contractors.
Any unethical practices you might see in reading their online reviews, talking to insurance companies, etc. would be a clear warning sign to stay away.
Doing things fairly and by the book, in turn, benefits us all.
If you’d like Absolute Roofing to come take a look at your home, please call us to schedule a FREE inspection at (402) 889-3381.