In retail remodeling and building industries, it is standard practice to get an estimate or bid for a project. This is to insure that you, the homeowner, are getting the most for your money. However, the situation is different with an insurance claim, and we hope that the following information will explain why getting estimates for an insurance replacement may not always be in your best interest, and how it could actually cost you money.
First, it is generally the insurance adjuster, agent, or claims department that asks a homeowner to get estimates for the repair or replacement after storm damage. Many times for car repairs, or small home repairs this is sufficient for the company to approve payment, and they will send you a check based on the estimate you provide to get the needed work done. This is not usually the case with major damage to roof, siding, and gutters from a hailstorm, windstorm or a tornado. The cost is considerably more, many times in the 10,000 dollar plus range.
We understand the insurance companies need to send someone out to inspect the damage, and make sure it is sufficient according to company policies, and state laws to warrant replacement. Most of the adjusters are very fair, and more than willing to pay for damage to your home, they simply need to document legitimate damage, and come up with the fair price to pay for the work. However, many of these adjusters, especially in a big storm when they call on many part time subcontractors, are inexperienced with what actual damage is, and will often under pay, or deny a claim out of inexperience. It is our job as experienced contractors who are familiar with insurance protocol to make them aware of actual damage they may not see, and inform them of current replacement costs. Most of the time the adjusters are reasonable, and glad to work with us. Occasionally however an insurance company will ask you to get more estimates. This is in hope that one of the estimates will be lower, and that is who you will choose, thus saving the insurance company money.
The only person who does an “estimate” that really counts on an insurance claim is one produced by the insurance company’s standard software. State Farm has created a program called Xactimate that is the industry standard. The program will determine the competitive market price for the work in each state. It is the contractor’s job to make sure all the damage is documented, and a fair price is paid to complete all the needed work, and if necessary to point out damage the adjuster has missed.
When the adjuster comes to see your house, and agrees with a contractor on a price, they generally hold back about 30% (called depreciation) of the payout until the work is actually done and a bill is submitted. They do this to insure that you DO NOT find someone to do the job for less than the competitive market cost, and then attempt to profit, or “pocket” the difference you saved. They will require documentation that you actually are being billed the full amount before they will actually release all the funds they agreed to pay initially. Once they come up with the final estimate, say 10,000 dollars, they will generally only pay you about 7,000 dollars initially until the work is complete. So, if you do not use a contractor that uses the whole 10,000 dollars, they will only send you what the contractor uses, and is noted on the contract. In other words if you get Cousin Joe’s roofing company to do the job for the 7,000 dollars from the first check, THEY WILL NOT SEND YOU ANY MORE MONEY!! They will only send you the amount actually listed by the contractor in his billing.
If on the other hand you get 3 estimates and the contractor you want to use is bidding the work for MORE than the insurance company’s adjuster- do you think they will agree and give you more? Not usually, they will instead expect YOU to pay the difference.
So then to be clear, if you did take your time to meet with multiple contractors, and explain everything 3 or more times, have 3 inspections, and listen to 3 sales pitches, ultimately the only estimate that really even matters is the insurance adjusters, That’s why it’s critical for us to be present when they make their estimate! The insurance adjusters set the price they are willing to pay, and other than any real mistakes he may have made, or items he missed, that is what they are willing to pay, unless you can help them find them someone cheaper to do it!
Generally if someone is considerably cheaper on their estimate, they are either fly by night, uninsured, part time handymen with no warranty, or they didn’t know what they were doing with their estimate, and got in over their head. So in being eager to get your job, they bid much lower, now, they realize that the job is taking longer, and the materials are running low earlier…what do they do? Unfortunately the answer is they usually “cut corners” and again, you, by saving the insurance company money, hurt your own investment.
So as you can see, there is no need for you to get estimates, only to find a qualified contractor who is licensed, insured, has references, and carries a comprehensive warranty. But most importantly, you need to find a construction, or roofing company who is qualified, and experienced in handling insurance claims and dealing with insurance adjusters. Why? Because no matter how good they are at doing the roofing, and siding work, that doesn’t really matter if they are unable to get everything you deserve to have replaced documented, and paid for-with no cost to you! I hope this was informative, and we look forward to handling YOUR claim from start to finish saving you time, money and headaches!