Roofing is the General Contractor's best and most often overlooked opportunity for a major boost to sales. In the past 10 years roofing has become the high priority for TPAs and preferred contractor programs, and has produced dramatic increases in claims volume for program contractors and contributes a lot to grow restoration business.
Most insurance carriers now send their roofing claims through their TPA programs directly to preferred General Contractors. Until recently carriers managed their own roofing claims internally using roofing contractors. There are a number of important reasons for this change.
Program Contractors are vetted by TPAs and provide better quality and greater customer satisfaction than others. Many roofing contractors do not use Xactimate and therefore do not “speak” the estimating language insurance companies require. During CAT events a flood of out-of-state roofing contractors market their services and are oftentimes unavailable afterwards to do any needed warranty work leaving the customer and carrier in a bind.
Vetted program contractors also help the insurance companies by inspecting and estimating claims quickly and efficiently and are familiar with the carrier’s guidelines. Perhaps most importantly, roofing contractors typically do not provide the accompanying services often required for multi-faceted roofing claims such as:
- Window/door/skylight repair/replacement
- AC coil comb and furnace vent reset
- Siding/stucco repair/replacement
- Deck/fence stain/paint
- Painting siding/window/door/fascia/trim
- Awnings, patio and hot tub covers
- Detached garage, barn, workshop, shed
- Board up/tarping
- Interior damage
This leaves the customer and carrier with the complex problem of identifying additional contractors for each additional area of damage. The solution is to assign the claim to a General Contractor who takes responsibility for the entire scope of work regardless of the extent of damage and the number of trades involved.
Though every insurance carrier wants to know that the GC will do roofing as a single trade without charging Overhead and Profit the reality is that additional damage beyond roofing alone will lead to O&P being added to the entire claim on the majority of roofing claims. While material and labor margins are a little tighter than with interior repair work the General Contractor should still expect a 40% per job profit on nearly every roofing claim.
Since roofing is frequently subcontracted to a roofing contractor, 40% profit is a healthy profit for simply completing a damage assessment, writing an estimate, and scheduling a subcontractor to do the work. It can be hard for a General Contractor to gain a foothold in the roofing market without the aid of TPA Networks. Most General Contractors do not aggressively advertise for roofing services and most customers look to roofing contractors if they are making a direct connection with a potential contractor.
Customers don’t think in terms of the broad range of damage done by weather and only think about roofing and therefore roofing contractors. So, it can be hard to break into the roofing marketplace on their own. TPAs solve this problem by providing General Contractors with high volume work without much or any advertising locally.
While it is important to TPAs and other insurance preferred contractor programs that General Contractors provide roofing services the contractor should be aware that roofing can be a multi-faceted service to provide. The contractor should really understand what is required to complete a roofing claim, and be well prepared for “catastrophes” when the volume of roofing work can become daunting.
Planning ahead for high volume weather related claims periods is vital to your success. My company did $2 million of roofing in 2012 following a single hail storm that damaged 26,000 homes in Colorado Springs, CO. Inside of two weeks we had received over 200 hail claims from our insurance partners.
In 2013 we experienced a late season hail storm in September damaging fewer homes than in 2012 but still providing us roofing work well into the early part of 2014. It was a welcome boost to our year-end numbers when other work typically slowed in our area. In 2012 hail came early in the season and in 2013 it came late.
Contractors must always have a plan in place that can be enacted upon any time a high volume incident occurs. Roofing was an important revenue generator for my full-service restoration company and it can be for yours. General Contractors are best equipped to handle multi-faceted and complex roofing claims and with a 40% per job profit margin it only makes sense that you seriously consider adding roofing to your construction services.
The result couple be a multi-million boost to your year-over-year revenue from this one additional service alone. In each of my Coaching Plans for full-service restoration companies I provide a step-by-step process including damage assessment procedures, industry best practices, cash flow management, needed personnel, roofing resources, lessons learned, and a Damage Assessment Guide for roof inspectors to aid in the development of this vital add-on service.
I also help General Contractors become activated on a majority of the 9 National Third Party Administrator Networks who as a top priority are seeking dependable and competent GCs who insure a quality finish and are committed to customer satisfaction and retention to whom they can send their roofing assignments. This could be the really big “next thing” for your company as you grow your restoration company to its next level of growth. growmyrestorationbusiness.com Reference: 3 Month Coaching Plan - The Rain-Maker - Nail-It! Make Your Next Million In Roofing