July 24, 2024
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Homeowners’ Insurance 101
One of your responsibilities as a homeowner is keeping an insurance policy in force to protect you (and your mortgage company) from losses if your home is damaged by fire, storms, or other perils. If your roof has recently suffered storm damage, you’ll need to file a claim with your insurance carrier. Since most of us never have this experience, you’re probably not familiar with the process, so here’s how it generally works.
Once you’ve notified your insurance company, they will send a claims adjuster to look at the damage. The adjuster will determine your settlement amount and the insurance company will likely pay your settlement with a check made payable to both you and your mortgage company. Most mortgage companies require this in order to protect their interest. In most cases, the lender will release a portion of the funds before the repairs begin so that you can hire a contractor. When the repairs are completed, they’ll release the balance of the funds, usually with a check made payable to the contractor.
Roof Repairs
If you’ve already filed a claim with your insurance carrier, they’ll provide you with a copy of the adjustor’s estimate, and your roofing contractor may want to take a look at the estimate. If that seems odd to you, don’t worry. There are some very good reasons the roofer wants to review the estimate.
Your Roofer Needs to Understand the Estimate
Your roofing contractor will need to understand the estimate and know what’s going to be covered and what’s not. Some policies have limitations on the amount of time allowed to complete the job. Other policies may only pay for a portion of the repairs. Your roofer should be able to discuss these items with you upfront and include them in the final price if needed. By reviewing the claims paperwork with you, the roofer can help you to avoid any unpleasant and costly surprises.
Insurance Fraud
Roofing scams can be sophisticated, and homeowners often fall victim to these fraudulent practices without realizing it. These schemes are perpetuated by professional scammers, out-of-state roofers, fake roofing companies, and even some legitimate local roofing companies. It’s crucial to be aware of these scams to protect yourself.
Understanding the Fraud Scheme
Here’s how the fraud typically works: the scammer or sales representative will assure you that you don’t have to pay your insurance deductible. However, your insurance policy clearly states that you are responsible for a portion of your claim, referred to as your “deductible.”
Common Tactics Scammers Use:
- Advertising Fee: They might offer to pay you a certain amount for placing a sign in your yard, labeling it as an advertising fee.
- Waiving Final Payment: They may suggest they won’t collect the final payment at the end of the job.
- Depreciation Payment: They might let you keep the depreciation amount when the insurance company sends it.
While these tactics might seem beneficial, they are designed to benefit the scammer, not you. As the homeowner, you are ultimately liable and could face legal consequences.
Why This Scheme is Illegal
The scammer promises substantial profits from the job, often resorting to using inferior or stolen materials, not completing the work as specified in the adjuster’s report, and overbilling your insurance company. This results in:
- Receiving substandard roofing materials, such as “seconds” or “defective” shingles, which lack a manufacturer warranty.
- Submitting a fraudulent invoice to your insurance company.
By submitting the fraudulent invoice, you become complicit in the scam. Depending on the amount involved, this could lead to charges of fraud, ranging from a misdemeanor to a State Jail Felony, punishable by up to 2 years in prison and fines. Only you will face these legal repercussions because you submitted the fraudulent document.
Protecting Yourself
Your insurance company allocates a certain amount for your home repairs, covering the fair market value of the total cost plus your deductible (your out-of-pocket expense). Typically, they will release some funds to start the project and the remaining amount after the work is completed according to the adjuster’s report.
Important Points to Remember:
- Any discount on the work, such as the deductible amount, must be shown on your final invoice. Failure to do so results in a “Fraudulent Invoice.”
- If the roofer didn’t complete all the work as specified in the adjuster’s report and still includes it on the final invoice, it is a “Fraudulent Invoice.”
- Not informing your insurance company about these discrepancies makes you guilty of submitting a “Fraudulent Invoice.”
Best Practices
Accept that you must pay your deductible. If you believe it’s too high, contact your insurance agent to discuss options for lowering it. Always hire a legitimate and reputable home improvement company to handle your storm-damaged home. By doing so, you ensure the work is done correctly and legally, protecting yourself from potential scams and legal issues.
By staying informed and vigilant, you can avoid becoming a victim of roofing scams and ensure your home is repaired with integrity.
Itemized Work Order
Most insurance companies required a detailed work order from your roofer with itemized line items that match their claim. If your roofer submits an invoice that includes items not on the insurer’s estimate, the insurance company will want an explanation as to the difference. This could cause a series of phone calls, additional paperwork, and long delays delay in getting the full claim amount paid out to the homeowner as well as to the roofer.
Ensure the Work is Done Properly
Your roofer wants to make sure that your claim covers the work that actually needs to be done. Claims adjusters often base their estimates on standard templates. If it’s a roof, it will have certain parts listed in his template. However, not all roofs are the same. Some items that exist on your roof may not necessarily be on every roof. The best idea is to have your roofer work with the insurance company to make sure that the estimates from both the roofer and the insurer will agree.
Local Codes
When a storm causes damage to a large number of homes in a particular area, the insurance companies will often send extra claims adjusters to help with the workload. Most of the time, these adjusters are not used to working in that city or county and may not be familiar with the latest building codes. As a result, the adjuster may not understand exactly what materials and labor are required for the best installation. The roofing contractor can review the estimates with the adjuster so that the work will be completed in compliance with the updated codes.
Faster Settlement
You want to get paid and so does your roofer. Allowing your roofer access to the insurance company’s claim gives them the ability to submit a final invoice that matches the claim and gets you your money more quickly. In some cases, it can also allow them to assist you with getting more money from your insurance company if needed to cover missing items or larger code upgrade items. All of this helps you and the roofing company get paid the full amount owed in a timely manner.
Pick the Right Roofing Company
Unfortunately, there are disreputable roofing companies and dishonest contractors out there, and they often pop up when a bad storm has gone through the area. The shoddy workmanship and substandard materials they use for the repairs they complete may not be evident until another storm comes around, and they’re long gone. For that reason, it’s important that you choose a roofer that you can trust. Before you hire a roofing contractor, do your homework. Find out how long your contractor has been around. Use referrals from trusted friends and neighbors and check their online reputation. See if the local Better Business Bureau has had any complaints about their work and if so, their response to the complaints.
Whether you’re dealing with small leaks, storm damage, a total roof replacement, or if you just need a roof inspection, you can trust the experts at Structured Roofing Systems. We are the leading residential roofing company in the Dallas Fort Worth area, and we specialize in working with insurance companies to help our customer navigate the claims process. We have a knowledgeable and experienced team with the skills and expertise to handle almost any roofing issue. When it comes to your home, your roof’s health is essential to keeping you and your family safe and protected from the outside elements. If you need roofing repairs or think it’s time for a roof replacement, call us to schedule a free inspection. If you’d like to know more about our company or the services we provide, please visit our website or give us a call at 972-484-1200.