Insurance

Insurance Preferred Contractor

My Home or Business Has Storm Damage, Do I Need 3 Bids?

Insurance Cancelled Because Of Roof Condition

The short answer is NO! This article will explain how obtaining multiple bids or using a “preferred contractor” only helps insurance companies underpay claims.

With most home or business owners insurance policies your insurance company is responsible for paying the entire cost of repairing your home or business after you pay your deductible. Thus, your insurance company has a strong motivation to minimize their costs. Some insurance firms will go to great lengths to delay or deny claims or use other questionable tactics to save money.

Insurance companies have deep pockets and they pay lobbyist a tremendous amount of money to influence government officials to protect their interests rather than the interest of home or business owners.

If the insurance company already knows the market value of fixing or replacing damage to your home or business, then why would they suggest, or in some cases insist, that you get multiple bids? It’s because the insurance company wants to manipulate you into either:

1. Obtain a cheap bid from some “Chuck-In-A-Truck” that is willing to repair your home or business for less than what the insurance is paying.

2. Create a bidding war between the contractors so they lower their prices below market rates to win your business.

In either case, the price reduction benefit only goes to the insurance company. Your insurance company will only pay for what the contractor charges and will not pay you the difference.

Furthermore, low estimates encourage contractors to cut corners. Any contractor that is willing to accept a below market payment must cut corners somewhere to survive. Unfortunately for you, this may be that the contractor is: using poor materials, or the required materials.

Another tactic used by some insurance companies to save money, is their insistence that you use their "Preferred Contractor". Insurance companies want you to use their Preferred Contractor because they have cut a deal with the contractor to accept very low margins in exchange for guaranteed work. Thus, these contractors are motivated to cut costs by cutting corners on the work that they do for home or business owners. Regardless of what your insurance company insists, you have the legal right to choose the contractor you want on your home or business.

As a property owner, you’re probably wondering if your property insurance can be cancelled due to the condition of your roof, and if your insurer really has the right to drop you.

The short answer is yes, it can happen. Insurance companies have the right to non-renew or drop your coverage if they believe your roof poses too high of a risk. An insurer can also choose to include a roof exclusion in your policy.

To mitigate their risks, insurance companies often have roof exclusions in their policies. This means that if your roof is in poor condition, they will exclude coverage for any damage related to the roof. This can leave you financially responsible for repairs or replacements.

Common Roof Issues That Lead to Non-Renewal or Cancellation

Several common roof issues can raise red flags for insurance companies. Here are the most common ones that can lead to non-renewal or cancellation of your insurance.

• Old or worn-out roof: Insurance companies may hesitate to renew coverage if your roof is approaching or surpassing its expected lifespan, considering it a potential risk.

• Missing or damaged shingles, leaks, or structural damage: Insurance providers often raise concerns if your roof exhibits signs of wear and tear, as it may lead to significant issues that could be costly to cover.

• Improper roof maintenance: Neglecting regular maintenance tasks, such as cleaning gutters and addressing small repairs, may be viewed as negligence by insurance companies. This neglect can result in larger problems over time, prompting them to reconsider coverage.

• Use of outdated or unsafe roofing materials: Roofs constructed from materials prone to damage, such as asbestos tiles, organic shingles, 3 tab shingles, t-lock shingles, and worn out commercial flat roofs may face insurance non-renewal or cancellation. Insurance companies consider these materials high risk and prefer not to provide coverage.

See Examples Below

T-lock Shingles

3-Tab Shingles

Organic Shingles

Asbestos Tiles

Worn out Flat Roof