Can A Roofing Contractor Pay Your Deductible?
In a word “No” . There really should be no debate over this, yet there are far too many unethical contractors in this world who take part in this practice. Never will you find someone from your insurance carrier telling you this practice is acceptable. You will never find a deductible covering contractor disclosing the details on an invoice.
Below are a few important facts to know before you do business with a company that offers to cover part or all of your deductible. We will reproduce a few important sections of the law and standard insurance contracts for you to read over and digest. Please note, we offer no legal opinion or advice.
What Does An Insurance Contract Say About Deductibles?
There is a good deal of fine print in an insurance contract, but the basics are not hard to understand. You pay a monthly premium for coverage in exchange for protection against a big loss. Your insurance is not there for every small loss, so there is a deductible amount that must be exceeded before the insurance kicks in. This deductible always comes first.
If your deductible is $1,500.00 and you have a loss that is less than $1,500.00, your insurance owes you nothing. You would cover the first $1,500.00 of any loss. The same is true even if your home is pelted by large hail and the total loss is much greater. if you have a $12,000.00 loss, your insurance company would owe you $10,500.00 as the deductible amount. $1,500.00 would be paid by you. In fact, for any loss above $1,500.00 your part would always be the same, your deductible.
Shopping For A Better Roof Price Does Not Save A Deductible
Continuing with the above example, what if a roofer can do the job for $10,500.00 that your adjuster said would be around $12,000.00? Did you just find a way to save your deductible? No. Your deductible comes first. If your job cost you $10,500.00 then your insurance company would only owe you $9,000.00 – there is no financial reward for finding a lower price. The only way a deductible is saved is by turning in a false invoice that reflects the higher dollar amount, not what you actually paid. It is this false invoice where a bad contractor can get you in big trouble. Approximately one in three claims are internally audited by insurance companies. If a roofing contractor gains a reputation for this practice, all their invoices are highly scrutinized.
The Roofing Sign Advertising Allowance
The most common vehicle an untrustworthy contractor uses to cover or hide a deductible is by placing his sign in your yard and paying you a “sign allowance” .
In exchange for his yard sign on your property, you get a hefty discount on your job. A discount you cannot tell your insurance carrier about, because well they just would not understand. And it is really not a discount after all, it is hard earned advertising dollars…right?
Certainly there is nothing wrong from receiving compensation in exchange for something. A contractor certainly may pay a fee to place his sign in your yard. What you cannot do is simply pull some number out of the air.
What is the true value of a “sign allowance”? The true value of a sign allowance is what being paid without the purchase of a roof! Smaller billboards across town may rent for $1,000.00 a month with tens of thousands viewing it. So now someone is offering you $1,500.00 so a dozen or so neighbors may view a small yard sign?
If this were proper, people would never pay for most home repairs. $300.00 service call from the plumber…no, just let him put a sign in your yard. $500.00 to the electrician….no, just put another sign in the yard. Of course this is ridiculous, yet there are hundreds of low end roofers telling you their sign allowance is perfectly legit (just don’t tell your insurance carrier).
If it walks like a duck and quacks like a duck….it is a yard sign allowance? Don’t deceive yourself. The yard sign allowance is a scam to improperly avoid a deductible. They are always contingent on you buying a roof and must be hidden from your insurance provider.
Are Insurance Companies Dumb?
Are they bad with money? Do they commonly overpay claims? Remember when the government had to bail out all the insurance companies?
The answer to all those questions is clearly no. They are not in the business of mismanaging claims. The price the adjuster comes up with is that for a quality contractor doing a quality job with quality materials.
Good contractors have far more overhead than the vehicle they drive. There is expensive insurance for your protection, an office and warehouse. Good contractors use quality underlayment and accessories which are key to a good job.
Contractors who cover deductibles paint themselves into a corner with a cheap price. They are constantly faced with the decision of making a buck or doing a quality job. Which direction do you think they go with you?
Can You Trust Your Roofer?
A roof is a very big ticket item that last a very long time. It is very important that the instillation is done properly. It is a big mistake to think of it as a commodity. You must trust the company you choose to do a quality job.
Can you really trust the roofer who offers to cover your deductible? They will not say this directly, but their main sales pitch is “we will lie to your insurance company so you will not have to pay your deductible”.
Are you ready to trust those guys? How can you be sure a contractor who knowingly will try and deceive your insurance company will treat you differently?
If your looking for a trustworthy roofer in Huntsville, Montgomery or Birmingham areas Yellowhammer is your #1 choice.