Why Paying Home Insurance Deductible is a Big Deal 

Amber Kirkham Go to 4 minute marker and listen to what he says.... it’s explained in the video. If you’re after the cheapest bid to pocket the difference - you have every right to do so... but 2 years later when your roof is leaking for whatever reason don’t expect that warranty to be around with that company or even that company itself to still be thriving. I’m in the business and our company works for insurance pricing. The guys that are giving you the cheapest bids never stick around and are fly by night roofers. It’s no different than taking care of your car - you can get a lower bid from mechanic A that doesn’t offer the bells whistles and honesty perhaps or pay full price with mechanic B and get your moneys worth.

@@BenDover-og9op I agree researching and selecting a contractor that uses quality materials and good workmanship is important. But the question I was asking is why the roofing contractor feels it is necessary to pressure the homeowner in showing them the claim? I’ll continue with your car example. If you total your vehicle and then you go to the dealership to find a new one do they ask you “Is this an insurance claim, let me see it and I will get you a new car for that price." The person looking for a vehicle will shop around and if they decide they want a more expensive vehicle they will pay more or if they pick a vehicle that is less expensive they keep the difference. The roofing contractor knows their labor/overhead/profit that they need to maintain their business so why can’t they just write up an estimate on what it will cost and show what brand/model of materials they will use? I have had a contractor say “If I would write up an estimate for your roof it would be more than what the insurance is given you”. That says to the homeowner that you are willing to take less money and cut the insurance company a break? And that you charge the homeowner more if they don’t have an insurance claim. Another reason I heard. “I need look at the claim to make sure they are not missing any expenses” Their claims are now software driven and use 3D mapping to determine materials and cost. It is a low % that it is missing much, and by showing the claim it is 100% that any extra above their normal profit will not come back to the homeowner or that extra money can’t be used for better products for your roof. Worst case all bids come in higher than insurance, you talk to insurance and provide estimates and question why they don't’ provide enough to cover it. Then talk to Contractor why their estimate is more than insurance claim. And if you are satisfied with their reason, pay the difference in the balance and get your roof done with quality materials and workmanship. The only reason I can think of that one would want to see the insurance claim is to ensure that they receive every penny even if it is above their normal profit that they normally charge which is greedy. If for some reason your estimates are more then the insurance claim, why would you except less, why wouldn’t you ask homeowners to pay the difference to cover the roofing expenses?

@@amberkirkham3820 I'm a roofing sales person and I get your question from time to time. There are two parts to it. First, as a good consumer we should all research the contractors we are hiring to ensure we get the best VALUE. The amount the insurance company pays to cover the claim should not be considered with the value aspect. Most of the situations I encounter when homeowners ask this question, the homeowner is looking for the lower cost contractor and are attempting to pocket the difference. The issue with this is that it is actual insurance fraud. The reason is the second part of my answer. Contractors are required submit a final invoice of the work completed (sometimes and estimate prior) and the insurance company is only going to pay the amount that was invoiced by the contractor. Therefore, if the contractor invoices for a higher amount than the agreement between you and the contractor (so the homeowner can pocket the rest) then both parties are committing fraud. Like I said, I absolutely support researching contractors but mostly to ensure you are getting the best products, services and warranties for the amount they are invoicing for. If you choose to go with a lower cost contractor and they submit their invoice the way they are supposed to then the insurance company only pays the amount for the lower cost estimate you received and then the homeowner just risk receiving a lower value products and services. We also want to ensure we are covering all of the materials that should be installed on the roof. Dmitri talked about Ice & Water guard not being included. This particular item is very common to not be included initially because it must be installed before they will include it. Once we install it, we have to take pictures and then submit a supplement for it and collect it afterwards. Sometimes Ice and Water guard is included. The paperwork helps us tremendously to help ensure we are maximizing the items covered (on behalf of the homeowner). Obviously this also helps the contractor so I'm not going to take anything away from that but at no point should you ever feel pressured by the contractor. Worst case, you choose not to show them and they submit their own invoice to the insurance. If it's less, homeowner receives less and there's nothing for them to pocket. If it's more, then the insurance may pay it but it's most likely going to be due to the contractor for the additional material or work not originally covered. Hope this helps shed some light on it.

@@teds8601 As I educate myself on insurance and roofing I feel the need to explain how my home insurance covers the replacement of my roof. In my case Insurance adjuster estimated the total cost of roof replacement (lets say 15k), they will subtract depreciation (lets say 4k), they also subtract deductible (lets say 1k). The following day I as homeowner received a direct deposit for 10k in the bank account. The homeowner will select a contractor (I suggest not to inform contractor that insurance claim even exists, I’ll explain why later) and lets say contractor estimate is 14k. The work is performed and homeowner receives final invoice (lets say 14k). Homeowner pays contractor 14k. Homeowner then forwards final invoice to Insurance Adjuster, which will be reviewed and the recoverable depreciation of 3k will be deposited in homeowners account. In the end homeowner pays their deductible of 1k and insurance pays 13k as you agreed upon when you signed your Insurance policy. My case isn’t the same for everyone, different insurance policies may cover only actual cost (- depreciation), replacement cost, may not include updated code requirements, etc. Where insurance fraud comes into play is when the contractor provides a final invoice of 15k, but only charges the homeowner for 14k and that is submitted to insurance adjuster and then insurance company pays 14k thinking the homeowner actually paid 15k. I’ll explain why I think it is a bad idea to allow contractors to see insurance claim. The contractor could provide an estimate and then ask to see the insurance claim, as the insurance claim doesn’t impact them from providing an estimate. Why do they want to see it then? The only reason they want to see the insurance claim is to see how much recoverable depreciation there is. They would like to inflate their profit and take as much insurance money as they can (which is also insurance fraud). If they would provide an estimate first and then realize there is much more recoverable depreciation in the insurance claim they can no longer just increase their profit as this would provide evidence that they are committing insurance fraud. If they see how much they can charge and write their estimate they can say that is their normal price. The reason I keep hearing is “to ensure that the insurance company has every thing on there”. Which I feel is invalid for these reasons: 1) You can validate the materials after you provide an estimate. 2) A roof doesn’t have many materials and any competent homeowner can compare the insurance claim and contractors estimate and see the delta. 3) Even if a material was missing, in my case the recoverable depreciation has more then enough margin to absorb that cost. And if you notify the insurance adjuster he will add the funds if it is needed to complete your roof to code. 4) The insurance adjuster does this for a living and uses a camera to make a 3d model of your house, this computer software then calculates how much your roof will cost and materials needed. Highly unlikely the software is going to miss something. Human error isn’t a factor. 5) I showed my insurance claim to a contractor, his response “Yeah we can do it for that”. He didn’t even bother measuring my roof. If he was looking at the insurance claim to validate everything was there wouldn’t you need to measure my roof? All he looked at was the last page to see the total money and that’s it. And for how fast he replied it tells me the insurance money is a profit and he was confident that he would make out well. By allowing contractors to take all the insurance money you are just increasing the rate premiums will go up for yourself and for everyone else that has homeowners insurance. Even if you don’t show them the claim, I still wouldn’t recommend letting them know insurance money is involved because I feel they will estimate it like the game price is right, They will estimate high and try not to go over. Because most consumers think the higher something cost it must be better and the insurance company is allowing me to spend this much. I know there are different insurance companies and different regions may do things differently, I’m not calling you a liar but I’m going to point out the things that you say that are not true in my case that were not covered above. 1) Ice and Water Barrier “This particular item is very common to not be included initially because it must be installed before they will include it. Once we install it, we have to take pictures and then submit a supplement for it and collect it afterwards.” I received money for this in the first payment (actual cost). All the Insurance Company requires is a Final Invoice and that is it. The city inspector may require pictures to prove you are installing the roof per code. But those pictures have nothing to do with the insurance. 2) “The paperwork helps us tremendously to help ensure we are maximizing the items covered (on behalf of the homeowner).” I’m not sure where you are going here. Only thing I can see that is being maximized is the profit. Besides if the homeowners policy is to pay for replacement cost of the roof, they will pay for the cost of the roof and any money above the cost of the roof the homeowner won’t get anyways. 3) “Worst case, you choose not to show them and they submit their own invoice to the insurance.” All the estimates are submitted to me, this allows homeowner to select contractors that use quality materials. So far from the 4 estimates that I received not one has come close to exceeding the insurance money that is allowed. The Final Invoice will also be submitted by me. It’s easy to email the insurance adjuster or upload to my insurance website. No reason the contractor needs to contact them. If the Insurance company has questions on the Final Invoice they will contact the contractor. The Homeowner and Insurance company would prefer if the money was used to buy the very best materials and that they are installed with excellent workmanship and that the roof will last many years so either one doesn’t have to payout anytime soon. Owens Corning contractor rating (Preferred, Platinum) is this bought? I’m surprised to see that the most expensive contractor wanted to install the monetary cheapest products (generic brand products which voids OC warranty) and is a Platinum Owens Corning contractor.

@@amberkirkham3820 When you send a letter of completion to the insurance company, in order for you to collect the full RCV, you must invoice for the full balance of the work. In order for you to pocket money, this would involve you or the contractor sending one invoice to the insurance company and a different one to you, which makes you both guilty of fraud. If a contractor does this work for less than the RCV on the insurance claim and just submits the one honest invoice to both of you, the insurance company simply pays less. It seems quite naive to imagine that insurance companies are writing estimates for more than they know they need to pay. what would be their incentive to do this? What's more likely, and what actually happens, is that they almost always pay less, as Demetri points out. Why wouldn't they, since most homeowners don't know better? The fact that many contractor will do the work for that amount or less just means that you will likely get lower quality workmanship and that the contractor won't be around to honor the warranty. Trying to get around the deductible or pocket insurance money is shortsighted. There is no free lunch.

See you in September! Thanks for the support!

good feedback. Deductibles is contractors problem not home owners.

lol It is a powerful one for sure

Tons of companies like that!!!

Can't believe they are still in business!

Lazy ass roofers

Exactly sometimes agents get confused I have a problem with a homeowner roof they wrote on the policy the roof was 34 years old when the sellers disclosure said it was 14 years old since the house was bought

We don’t have one. My contract is all I have.

I do about 85% insurance claims, while it is more complicated its far easier to get a roof job that a owner is only paying a fraction of the cost on vs them shelling 15k outa pocket. They also tend to be far happier and also tend to buy more upgrades ending with a even better payout.

Your entire argument for collecting my deductible and all the insurance money seems to be based on the assumption that the contractor isn’t pricing his roofing jobs correctly ( Which may not be true)... and he will go out of business if he doesn’t get all the insurance money including my deductible....Even if that amount is more than what he charges for a roof normally. I should pay you what you charge, no more, no less. I don’t want a contractor to waive my deductible... i just want to pay you what you charge, that’s it.

Well, 2 things: if you want to keep part of your deductible you are committing insurance fraud. Second: you can hire contractor directly for “his price” and keep insurance moneys, but you will not get depreciation: you actually need an invoice to get it. So insurance will give you $8k on $12k job. To get remaining $4k you will need invoice for $12k for them to release rest of payment. Where you gonna get that? You can’t make it up. So if you do it for $10, you saved your insurance company $2k. And either way you are out of $5k deductible. Dealing with insurance company, billing, waiting for payment longer is worth extra $2k to contractors. If you go to doctor you have “cash” price and “insurance” price because you are adding another layer of service and another department to deal with insurance billing. Why does it bother you so much how much contractor gets paid and why you can’t just pay $5k and let them work with insurance company?

@@RoofingInsights3.0 gotcha. Didn’t realize depreciation worked like that. Oh well , back to paying my deductible

Contractor who just pushing paper and doesn’t do any work. Often doesn’t have office or employees. Subcontracts everything, not taking liabilities and have people who do the work do warranty calls.

@@RoofingInsights3.0 do you own your labor crews ?

Why would Contractor keep that money? If home owners wants to live with damaged shed or play set it is his decision. No legit contractor will never charge for work he doesn’t do. What does it has to do with deductible? Instance claim. Is $25k, $20k for house roof, $5k for shed and play set. Contractor collects $1000 deductible and $20k for house roof. He has nothing to do and don’t want to mess with playlets or fences, it’s not his business. It has nothing to do with ACV or deductible. You are confused my friend. Home owner must pay deductible, no if’s buts and no creativity needed. If home owner doesn’t want to do the some work, he can keep the money And live with damage. It has nothing to do with contractor who did everything right or insurance who paid the claim. It is home owners decision to restore or take money and not restore.

No, it’s withheld from the replacement cost. The replacement cost in the insurance settlement is the estimated cost to do the work. The deductible is a portion of that cost. Are you talking like a homeowner who says this and making a joke or asking a genuine question? I can explain further if you need the help understanding it.

@@unpopularopinion149 i need help... Please explain. Had a roofer offer to pay 1% deductible.. He did a lot of explaining.. But what got me was all the pictures he took of everything before getting on the roof... He also wanted me to give my claims adjuster his info..

False

Incorrect, especially if your a top notch contractor using quality materials and your paying workers what they are worth. $10,000 roof replacement claim with $2500 deductible.. you do that job for $7500 your doing it for free. "working into price" is just nice way of saying cutting corners. Somebody pays in the end

you clearly have no idea what you are talking about, stick to auto-body shop talk for just that.. unless you have extra work being performed it is ILLEGAL people get fined in the state of texas.. its not a numbers issue, the only numbers issue is the one that has to do with your own money.. mind you the contractor isn't the one charging your deductible the insurance company is .. if you don't like what they are charging you, take it up with them ..

Mathus Vaiaoga you keep assuming that the contract is billing for 100% of the scope. Yes it’s wrong if your billing for something you didn’t do.

Of course it's fraud to not do every line item you charge for. Thanks captain obvious.

You are absolutely wrong. Do you even know what ACV stands for?

Yes actual cash value

Let me ask u this If the insurance gives $1000 ACV money for interior work and you don’t do the work do you still charge them $1000 deductible??

@@mathusvaiaoga8207 And where did you read that actual cash value can be applied towards deductible? Most states has law covering it today and insurance companies are very transparent about it as well: it is home owners responsibility to cover deductible in both auto claims and home insurance claims. Terminology speaks for itself as well, you know they call it deductible for a reason, and it has nothing to do with ACV.

@@mathusvaiaoga8207 $1000 ACV for interior work are supposed to cover interior work, not deductible. If home owner decided not to do the work it is his decision, nothing to do with deducible. Contractor will not bill for it if he doesn't do the work. Contractor will collect deductible and will charge for work he did. If you get in car accident, and insurance pays for body repairs and you pay $500 deductible, but your radio is broken after the accident and insurance will give you $500 to buy new one, but because you are broke you use it to cover deductible and drive without radio: what does it has to do with collision center who charged you deductible and got paid for work they did? You can keep all you want and you dont have to do portion of the claim, but never tell anyone that you can pay deducible from ACV. You paying deductible from your money, you taking ACV money because you are broke and dont want to restore your property to previous condition. Nothing to do with contractor.

It’s 100% illegal, and I covered it in a video. If you can’t sell the job for the price of deductible I feel bad for you

@@RoofingInsights3.0 shouldn't feel bad for me brother I sell between 350 to 500 a square. You can't get in trouble if you offer to pay them for ad space. You just keep it all separate. I agree with you though. I don't bring it up unless the homeowner does. They will say well these other guys will pay my deductible...so I say ok I'll pay you for ad space. Then I tell them it's illegal for me to just pay the deductible. I can't get in trouble for that. I give them a grand and they leave the sign out front for a month.

@@RoofingInsights3.0 then I get more jobs from it as well. Legit.

@@RoofingInsights3.0 tell me how it's illegal to have the homeowners charge me separately for yard ad space? Where is the law that says that's illegal?

@@RoofingInsights3.0 btw love your videos