Although we have been around the insurance restoration industry for some time now, we are still surprised at the wide range of rates that are charged by restoration companies for the exact same work. Normally we would be taking a close look at the providers who are asking for the highest amounts. In this case, however, we are more concerned by the contractors who are providing the lowest cost estimates.
You’d be surprised how many insurance restoration contractors are literally doing work for free every single day. Yet they don’t see it that way. The reason is because they don’t see the difference between insurance related work and retail work, when the reality is that they are drastically different.
In the retail world, if you’re roofing a 6/12 single story walker (a typical, quintessential residential roof, for those outside the industry) with laminated shingles, you might take that job on for let’s say $300-$350 a square. You pick colors, schedule the job, order the materials and install the roof. For payment, you simply collect half the payment upfront, and ask for the balance upon completion of the job. It’s a pretty simple and very straightforward process.
In an insurance job, you have to first inspect the roof, document the inspection thoroughly, meet with an adjuster, schedule the work, wait for the first payment, do the work, document the entire work process thoroughly, send an invoice for any additional work that had to be done, submit invoices, and wait for the approvals. Then, once all of this is done, you can collect your final payment for the job. Seems more complicated right?
There are other aspects of insurance restoration work which differ greatly from standard contracting, such as the time it will take to complete the work. Your work cycle on retail jobs may only be 2-3 weeks, while an insurance related job can easily take 2-3 months or more. That’s at least 4-5 times longer! Yet for some reason, some contractors feel that getting paid the same amount or less for insurance work is worth it. Nothing is further from the truth. The reality is your bottom line will be hurting because the true cost of running your business is much higher. This concept is called the time value of money.
Besides needing to account for all of the additional time, expenses, and steps involved when doing restoration work, the number one biggest factor to getting insurance work paid the correct way, and quickly, is how well you document the work you do!
If you can’t clearly articulate what you did and why you did it to the insurance company, you’re going to have a hard time getting paid right and quickly! Good insurance restoration contractors will spend the time learning how to communicate with insurance companies, and giving them all the things that they will require to quickly justify their payments to homeowners.