Overhead & Profit an Ongoing Issue in the Roofing Industry

By: Jason Sloan, Owner of CIBS

For many years all that was needed was 3 trades in order to get O&P. We have seen the insurers push back at an alarming rate on O&P. Why are they doing this?

In our honest opinion it corresponds to the economy recession of 2007-2008. New construction was all but halted. Many contractors that had built thriving business had to find new professions. A majority have gotten involved in insurance restoration work focusing mainly on roofing.

English: Moore, OK, May 25, 2010 -- Ron Crow, ...

The reason for this is that hail and tornadoes occur every year. It’s a recession-proof industry, with the exception of pricing and O&P.

Insurance claims keep rising and with that their profits are getting cut, this does not sit well with them. The insurers are fighting back with limiting what is paid on claims in various ways.

  1. Most insurers are holding code items until supplemented for and or while incurred. We deal with this by submitting code items per the ICC and the local building department. If not invoiced correctly many code items that have been approved may not get paid for.
  2. Insurers are not paying for accessories and flashings that are undamaged on a roof or siding. The reason they give is that it’s not necessary and that roofers are completing the job without replacing those items. The bad part of this is we have seen roofers at an alarming rate not replacing accessories and flashings. This makes it very difficult for the contractors that are replacing all metal flashings and accessories to legitimize this. Not paying attention to what’s already paid for and what’s on the property can cost a lot in revenue.
  3. These items are included in the scope of work.We have heard this a lot lately, we handle this by calling their bluff and submitting Xactimate white paper on the item description.
  4. O&P- we don’t go by 3 trades anymore, this job is not complex enough.A job is as complex as you can explain it and show it is. Being able to discuss a claim with an adjuster with the pictures in front of them makes all the difference in the world. If they can’t make a decision then a supervisor needs to be contacted.

Contact us if you are having issues on files and let us free up your days.

Roofing Company Up In Arms Over Unpaid Work

A roofing company in Omaha, NE has taken upon itself to sue a number of insurance companies that supposedly “short-changed” them on a number of roof repairs they had done in the aftermath of a rather destructive hail storm.

$6 million Owed?..Scratch That, OVER $6 Million

Hail on Shed Valley Boys Roofing is claiming over $6 million is owed to them for the repairs they performed on 303 homes in the Omaha area. The lawsuit spans seven insurance companies including:  Farm Bureau, Auto-Owners, American Family, Travelers, USAA, State Farm and Farmers Insurance. Unfortunately, the company has done itself a disservice, as WOWT reports that, “…one house is listed “not paid for a skylight.” Fact Finders looked all around the house and there’s no skylight and the owner says he’s never had one.” (http://www.wowt.com/home/headlines/Roofer-Sues-Insurance-Companies-262635121.html).

There’s a possibility that as this case runs, more and more errors could be discovered or discounted, but as Valley Boys attorney, Matt Satthoff, says,”…it will all be determined in discovery.”

Second Party Rebut

While Valley Boys has made themselves fairly vocal on this outrage, American Family Insurance bided their time and has since come out with the following statement:

“American Family has worked with our Omaha-area customers and roofing contractors to resolve thousands of claims from the April, 2013 hail storm. When insurance companies and contractors work together in the customers’ best interests, the repairs can get started promptly and homeowners quickly return to their normal lives. When the opposite happens, and roofing contractors choose to ignore standard practices, the process grinds to a halt and homeowners are unfairly delayed getting their homes repaired.” So it looks as if these two might be in a for a bumyp ride, but we shall see.