PETRUS Roofing and Solar

Rock Solid Roofing and Solar in the Greater Houston Area

insurance

Why Cash is CHEAPER than Insurance for a New Roof!

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When it comes to roof repairs or replacements, many homeowners are surprised to find that the price of an insurance claim is often higher than a straightforward cash deal. But why is that? Let’s break down the key reasons why an insurance job can come with a bigger price tag compared to paying out of pocket.

1. Strict Insurance Guidelines and Requirements

Insurance companies typically have strict guidelines that contractors must follow to ensure the work is done to a high standard. This means that everything from the materials used to the amount of labor required is heavily scrutinized. Contractors must often provide detailed documentation, proof of costs, and follow specific repair protocols that go above and beyond what might be done in a simple cash transaction. This adds time, paperwork, and extra effort, which increases the overall cost.

2. Higher Material and Labor Costs

When working with insurance claims, contractors often use top-grade materials to meet the insurer’s expectations. For example, your insurance company might require a certain type of shingle or underlayment, even if a more affordable option is available. Additionally, insurance jobs may require contractors to hire licensed and certified professionals for every aspect of the work, from plumbing to electrical, adding to labor costs. In contrast, a cash deal gives the homeowner more flexibility in choosing materials and can allow contractors to work with more cost-effective labor options.

3. Administrative Overhead and Documentation

Insurance jobs come with a lot of paperwork. Contractors have to submit detailed estimates, manage inspections, and provide ongoing updates to the insurance adjusters. This administrative workload takes time and resources. In some cases, roofing companies may need to hire extra staff or use specialized software to manage insurance claims, and these additional costs are passed on to the customer.

4. Time-Consuming Approval Process

Insurance jobs can also take longer to complete because contractors need to wait for approval from the insurance company before starting work. This often leads to delays and rescheduling, which can cause inefficiencies and drive up costs. In contrast, a cash deal can be scheduled and completed much faster, allowing contractors to work more efficiently and often at a lower price.

5. Insurance Adjusters and Inspections

When dealing with an insurance claim, an adjuster will often visit the property to assess the damage and determine what repairs are covered. This process may require multiple inspections or back-and-forth negotiations between the adjuster and contractor. These extra steps take time and resources, and the contractor must account for these in the final price. In a cash deal, these inspections are not required, and the homeowner has more control over the process.

6. Insurance Coverage and Liability

Insurance companies expect contractors to have higher levels of liability coverage for the work they perform. This extra layer of protection ensures that if something goes wrong, both the contractor and insurance company are protected from additional financial risk. The cost of maintaining this type of insurance adds to the contractor’s overhead, and this expense is passed along to the customer in the form of higher pricing for insurance jobs.

7. Inflated Claims and Insurance Markups

In some cases, insurance companies allow for higher markups or padded estimates to cover unforeseen costs. Since insurers know there could be hidden damage that isn’t visible at first glance, they sometimes allow for more wiggle room in the budget to avoid underpaying. Contractors may also charge higher rates for insurance jobs to cover any complications or disputes that may arise later, leading to a more expensive overall bill.

Cash Deals: The Simpler, Lower-Cost Option

Cash deals, on the other hand, offer flexibility for both the homeowner and the contractor. With fewer restrictions, contractors can offer competitive pricing, use more affordable materials, and get the job done faster. Homeowners who choose a cash deal may save money upfront but should ensure they’re still getting quality work and materials that will stand the test of time.

The Bottom Line

Insurance jobs cost more than cash deals because of the additional documentation, higher material and labor standards, and the insurance company’s involvement in the process. While paying with insurance can sometimes feel more expensive, it offers the peace of mind that your repair will be done according to strict guidelines and industry standards, often with higher-quality materials and workmanship. However, if you’re looking to save money and have more control over the project, a cash deal may be the right choice for you.

Always weigh the pros and cons of both options, and discuss with your contractor what makes the most sense for your situation. Whether you’re dealing with an insurance claim or paying out of pocket, it’s essential to make sure you’re getting a fair deal and high-quality work.

Wishing for Unicorns

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Now that I’ve spent the last three months diving into the world of contractors, roofers and otherwise, I’ve realized the old saying is painfully true: “Fast, Cheap, Good- pick two.”

Cheap can be fast, but isn’t good. This is because you have to cut corners somewhere. The dangerous thing is if you cut out what is required by code. For instance, Brian recently saw an investor purchase a long-abandoned house on his street get the roof replaced. They didn’t use ice and water barrier, which means future leaks will happen at the next big storm event. The other side of cheap is after the roof is built. If there is a problem, they will not be around to rectify the situation. Cheap labor usually isn’t competent, but it definitely isn’t long-lasting if you’re trying to build a business that matters to the community.

Fast can be good, but it usually isn’t cheap. If I’m a roofer that moves fast, that means I have a lot of people working the job. Sometimes, like in The Woodlands, there are beautifully complicated roofs that require two or three full work crews to get it done quickly. Cheap contractors usually work slowly because they don’t price their work high enough to afford more teams of skilled workers. If fast work is cheap, it is usually because they are skipping steps to get it done. Not laying out tarps or Catch-All nets means nails will be in your yard, waiting for your pet’s paws or kid’s foot. Using the wrong nails or nail heads can mean little leaks into your attic from day one.

Good can be fast, but it ain’t cheap. Good work requires skilled workers. Rare is the handyman who can scale a roof for the first time and know that, when working in valleys, you need to dog-ear the shingles along the angled edge so water can flow smoothly off the roof. Rare is the salesperson who knows what to look for in an attic under the roof on his or her first day. Cheap usually means “unskilled” or “new”. Good work usually means experienced workers. They cost more because they have earned it through demonstrated workmanship.

Everyone thinks they can find that one contractor who will be good, cheap, and fast. Maybe these unicorns exist, but such wishful thinking will only get you taken advantage of by unscrupulous folks. They overpromise and underdeliver because they know every homeowner is looking for that unicorn. But you’re the one stuck with cheap work, cheap materials, cut corners, and no follow-up.

There is a Texas-based roofing company whose ads on Facebook I see almost every day declaring that roofing companies are ripping people off with high prices, and they are good people because they charge around half the norm. My guess is this company will not be around in 5 years. So what’s the worth of a 5-year warranty from a company that fails in 2 years?

Nothing.

Our prices are based on materials, labor (including liability and worker’s comp. insurance), sales, and overhead. We pay our people right and on time. We pay for trucks, gas, Catch-All netting systems for your house, plants, pets, and swimming pool, etc. And we run lean as an organization. Our office furniture was brought from our homes. There are no cushy luxuries bought with company cash.

This is because we want to build something worth lasting.

Exploitation by Bad Contractors

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The three groups of people whose vulnerabilities shoddy contractors exploit are day laborers, salespeople, and homeowners. These unethical and immoral practices have stained the industry to no end, ruining the reputation of the whole industry. Ethical contractors must work together to overcome the horrible stereotype and build a business worthy of your hard-earned dollars. 

VULNERABLE WORKERS 

We all know that there are a lot of migrant workers in the roofing industry, some with dubious legal status to be in the country. The working poor, even as “aliens and sojourners” in our country, cannot be deprived of their just wages. The Bible lists this as one of four sins that cry out to God for vengeance. Yet, shady contractors will often take advantage of migrant workers and instead of paying them at the end of the day, will ditch them at the worksite and pocket the hard-earned money. After all, most day laborers are not going to go to the police. 

Another issue with subcontractors and the business owners is the phrase you’ve perhaps seen or heard on contractor ads: “Insured and Bonded.” This means that we, Petrus Roofing and Solar, carry liability insurance and worker’s compensation for our subcontractors. If an accident should happen, God forbid, they will be covered and cared for. The type of contractor who would refuse to pay a person for their labor is probably not going to pay for extra insurance for the same workers. 

VULNERABLE SALESPEOPLE

Another vulnerability the unscrupulous contractor takes advantage of is his own salespeople. Often, the best salesperson will actually out earn the owner of the business, which is OK because a strong salesperson means the whole company benefits. But what many bad actors in this industry do is once the roofs start going up, they fire the number one salesman and refuse to pay their commissions. Again, the pocket the money for themselves. 

VULNERABLE HOMEOWNERS

The vulnerabilities of homeowner ignorance are often exploited. You don’t know what a whole roofing system looks like, so they leave out the water and ice barrier or the drip edge, causing water penetration during the next big storm. You don’t know what’s happening on top of the roof, so inadvertent damage is covered up, but not fixed, making your home no longer worry free. They pull you into insurance fraud by suggesting you don’t need to pay your insurance deductible. You think they are keeping more money in your pocket, but they are cutting corners, committing fraud, and drawing you into it. We are also “bonded”, which means that if for some reason our company folds, the bond ensures your project will still get finished.

ETHICAL CONTRACTORS

None of us know everything about everything, so our ignorance makes us vulnerable to exploitation and scams. This is why in the contractor field it is important to go with a company that values education. In our ethical outlook, more knowledge means more agency. You are an informed consumer and now, armed with knowledge, you have significantly more leverage in hiring a contractor. You have expectations that are clearly communicated and must be met.

Those who work on your roof are skilled, compensated, and protected by insurance. Those who sell to you are valued, trusted, and respected members of our company. And we will never cause you to commit insurance fraud, submit a false claim, leave off required materials for a complete roof, or push you into a project or solution you don’t need.

We educate and never manipulate because we plan on seeing you again in the future. A satisfied customer is a returning and a referring customer! Every roof, every time.

Your Homeowners Insurance and Roof Claims

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This is not meant to be any sort of legal advice or insurance policy advice. You should pull out your homeowners policy and maybe even call your agent before you have any problems. You’ve heard “Knowledge is power”, but when it comes to insurance, “Education is Armor” against being taken advantage of. Read below to find out more.

Insurance Types and Products

Insurance is meant to protect our families or our assets from the unforeseen and unpredictable future. Life insurance pays out to your spouse and children if you die, protecting them from poverty. If you’ve ever heard of the Knights of Columbus, it was started over 140 years ago to provide for widows and orphans if the husband died in the factory. But there are a lot of confusing financial products in the category of life insurance, such as term life, whole life, etc. You have to navigate all of this and it can feel tedious.

Homeowners insurance is like life insurance. It can get confusing, so let me explain.

Your roof may cost $20,000 to replace when it hits the 20-25 year lifespan for the asphalt shingles. That’s a lot of money! So you get insurance to cover the replacement cost in case a couple years after your new roof was installed a hailstorm comes down like a wrecking ball and totals it. This is a protection against the unpredictable.

I know homeowners who get near the end of their roof life and ask for an inspection, only to be disappointed there is nothing wrong. They hoped hail or wind damage would mean their homeowners policy would cover the Replacement Cost Value (RCV) of the roof and they wouldn’t have to pay out of pocket. That’s totally understandable, especially if you have been a faithfully-paying customer to the insurance company.

Honesty Matters with Inspection Reports

Our free inspections report the truth of the situation. We present the facts on the condition of the roof with nothing false added. We do not exaggerate claims, falsify data, or misrepresent what we see and know. Insurance companies will send their own adjustors, anyways, to make their evaluations. After all, these companies know roofers would love to always find enough damage to warrant a whole roof replacement.

Working with insurance companies is hard work. Some are great and some are soulless bureaucracies who “deny, delay, and defend“, hurting the homeowner. This is why we believe in ethical roofing because our credibility with homeowners requires workability with insurance adjustors and agents. Saying we are on the level and letting our actions follow our words means we build a reputation with insurance companies that we are rational and fair to work with, which helps us get more done on behalf of the homeowner.

When a significant storm event hits your area, a lot of homes will be damaged and filing claims to their agent. A hailstorm or hurricane is an “Act of God”. Humans are not liable for such events. Liability car insurance covers the damage a person might inflict on others because they were texting while driving or some other negligent behavior. Their premiums increase because their poor decisions resulted costly accidents.

This is not exactly how homeowners insurance works. Too many homeowners are scared to file a claim because they fear their premiums will go up and it is already expensive in Houston. The reality is that after many major storm events everyone’s policy might go up because the area is seen as increasing in risk to the insurance company.

If your policy is going to increase, you might as well get a new roof out of it!

So pull out your policy, blow the dust off of it, and look for the section on your roof to see if it says “Replacement Cost Value” or RCV. It may say instead “Actual Cost Value” or ACV. The differences are important and can differ by thousands of dollars.

Residential Insurance: RCV and ACV

Here’s an excerpt from the Texas Office of Public Insurance Council on the matter.

“Actual Cash Value (ACV): ACV is the amount to replace or fix your home and personal items, minus depreciation. Depreciation is a decrease in value based on things like age, or wear and tear.”

“Replacement Cost Value (RCV): RCV is the amount to replace or fix your home and personal items. Even if you purchased coverages that pay RCV, some types of property may only be paid at ACV. These may include:

  • Roofs
  • Other building property – appliances, wood fences, structures that are not buildings, awnings, carpeting, outdoor antennas and equipment; and
  • Personal property – antiques, collectibles, memorabilia, items that cannot be replaced, and obsolete property that is stored or not being used.”