We’re continuing our series on insurance and roofs with our latest blog on whether you should put your insurance job to bid. The simple answer is no, but like most things involving an insurance claim there are nuances to be aware of. Read on to learn more!
The Roof Damage Insurance Process
To understand why you shouldn’t put your job to bid you need to understand how most insurance claims work. Imagine a homeowner has a roof with a life expectancy of 20 years. Six years after being installed there is a hail storm, and it is determined the roof needs to be replaced. Insurance estimates that it will cost $10,000 to replace the roof with materials of like kind and quality. Because the roof is 6 years old, it has depreciated 30%, or $3,000, so the actual cash value of the roof is $7,000. If the homeowner’s deductible is $2,000 then the first check she receives will be for $5,000, or the actual cash value minus the deductible. If you have a replacement cost value policy, the insurance company most likely will hold the depreciation ($3000) until AFTER the roof is replaced.
Why Going With the Lowest Bid Hurts You
Once the work is done the insurance company will ask for a receipt or final invoice. So, if you put your job to bid and went with a roofer who offered to do the job for $7,500 instead of the insurance estimate of $10,000 the second check would only be for $500 and not the full amount being held back, to total the $7,500 you spent. The insurance company will pay what you paid and not their estimate. And because you went with the lowest bid for your roof you most likely received a sub-standard roof!
What if I Was Told to Get Three Bids?
Your insurance company may have asked you to get three bids. This is by design. The insurance company does research to know exactly what a roof replacement will cost. If you put your job to bid and go with a roofer who offers to complete the work for less than the insurance estimate, then the insurance company will be saving money. However, if your adjuster asked you to get bids, it does not mean they are out to get you. They are often unaware of the repercussion of suggesting a consumer put their job to bid and are just following company policy.
What Should I do Instead?
Instead of going with the lowest bid, you should work with a professional roofing company, like Kanga Roof, who will review the insurance estimate with you and ensure all components are included on their estimate… nothing more, nothing less. When all components are included in your insurance estimate, Kanga Roof agrees to do the work for the amount your insurance company agrees to pay. All you pay is your deductible and any upgrades you choose.