Truth About Estimates
When someone is shopping around to find a contractor for a home improvement project such as bathroom remodeling, painting, or roofing, the first step is usually to get estimates. An estimate can range anywhere from cousin Joe saying something like “I could do that for five hundred bucks!” to a professional spending a considerable amount of time measuring and calculating costs in order to provide you with a competitive yet profitable “bid.” In the retail remodeling and building business this is standard practice, and when we do retail work we often provide estimates or bids. This is to ensure you are getting the most for your money and is the best way to do business as an informed buyer.
However, the situation is different with insurance claims, and I hope the following information will explain why getting estimates for an insurance replacement is clearly not in your best interest, and is in fact a waste of your time and potentially, money! To begin with, 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. Not so with major damage to roof, siding, and gutters from a hailstorm or tornado, the cost is considerably more, many times in the 10,000 dollar plus range. We understand the insurance company’s 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 insurance company’s 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 a 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. As a result, they 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 adjusters are reasonable and glad to work with us.
Occasionally however, an insurance company will ask you to get more estimates. This is a hope that one of the estimates will be lower, and that is who you will choose out of habit, thus saving the insurance company money.
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, or even worse not do the work at all and then attempt to profit or “pocket” the payment. 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. 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 to 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, 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. 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, or part time handymen with no warranty. Usually 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. Once 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 that 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!