Admin

Insurance Ripoff

By
Real Estate Broker/Owner with Bean & Dunn Real Estate

Last month we had some hail storms like we have never had before.  The North side of many homes and businesses looked like a bomb had gone off and in some cases, stripped the siding right off the property.  A friend of mine, who owns a construction company, asked me for help in evaluating damage and creating repair estimates.  Once out in the neighborhoods, I was amazed at the number of roofers, which had clearly increased 100 fold over night.  Many came in from out of state; did short term leases and set up shop claiming to be local companies.  I learned a lot about the insurance business over the past month.  One roofer we had referred business to over the years was the most honest.  We were trying to get quotes/bids on several residences.  He just wanted to know how much the insurance company was going to pay because he did not want to "leave any money on he table."  I understand these situations create "crisis pricing" and cost of labor and materials tend to sky rocket over night.  However, what I was told still shocked me -   the roofer just want all the money the insurance company was willing to pay.  A roof that should have cost $6,000 was now $11,000.  A garage door normally $650.00 installed with new rails was now $1150.00.  The rationale was that he needed to make all the money he could now because the rest of the time he was barely scraping a living together.   It's way too easy for fly-by-night companies to come in and create havoc in a local market.  I can't imagine how many roofs were put on that really did not need an entire new roof.  Insurance adjusters end up getting so busy that they just want to get the claim in and processed so they can move on to the next one.  It seems there's no incentive for the adjuster to try and reduce the cost - rather the incentive is to get as many claims processed in the shortest amount of time.  I don't see how this is sustainable.  Here's my suggestions:  I'm a limited government type of guy but this is one case where licensing is really needed.  In fact, the entire construction industry should be licensed.  Recruiting roofers off of job sites should not be tolerated.  Part of the crisis cost is companies roaming around offering $10.00 more per per square to roofers in the middle of a job!  Not having to answer to anyone - they (the roofers) pack up and leave in the middle of a job leaving the roof stripped of shingles.  Permits should be required for replacing an entire roof.  I know having to inspect each job could end up being a nightmare; however, with "no permit required" emergency repairs authorized to protect the property, I think the end result will eliminate the materials and labor shortages.  Additionally, adjuster will have more time to better evaluate whether or not an entire roof needs replacing or just spot repairs.  I know there are a ton of arguements against spots repairs and the additional damage caused by getting on a roof that is 150 degrees plus.  Which leads me to ask why we continue to use asphalt shingles.  The obvious answer is the initial cost of the roofing system.  Metal and rubber are three to four times higher than asphalt.  However, these roofs last the 40 years they are intended to last.  A 30 year laminate shingle in Oklahoma lasts about 10 years or about 1/4 the metal/rubber roofs.  In the long run it works out to be the same money.

Show All Comments Sort:
June Piper-Brandon
Coldwell Banker Realty - Baltimore, MD
Creating Generational Wealth Through Homeownership

It seems lately that every natural disaster brings out every harvey wanna be with a hammer and a notion to make a quick buck off those less fortunate than themselves.  Home owners need to beware.

Jun 25, 2010 01:35 AM