There are a variety of reasons WHY an adjuster denies a roofing or siding insurance claim; they dispute the storm date, they didn’t perform a thorough inspection, there wasn’t enough damage to warrant a replacement, or maybe they felt that the roof could be repaired instead of replaced. The WHY doesn’t really make a difference. What matters is what the contractor can do about it.
Some roofing contractors and sales reps view a denied claim as the end of the road for that particular job, potentially missing out on thousands or even millions of dollars per year. Savvy contractors who understand what damage looks like and perform thorough inspections view a denied claim as just another minor setback and actively work to appeal a denied claim and convert it into a profitable job.
Supplementing a denied roof or siding claim is the best way for you to bring an insurance storm claim back to life, but as Kenny Rogers used to say, “You’ve got to know when to hold ’em, Know when to fold ’em, Know when to walk away, And know when to run.”
Denied claims are more work for the contractor AND the homeowner. The denied claim supplementing process involves submitting a detailed Xactimate estimate with corresponding photo documentation and educating the homeowner on how to challenge the adjuster’s initial findings. If you don’t want to lose credibility with carriers, you should only supplement denied claims when you feel confident the house has enough damage to actually warrant an approval. By choosing the right denied claims to challenge, you will increase the likelihood of getting approvals, but even if you eventually lose the fight, you will likely have gained a long-term customer and even get referrals.
What Are Your Options?
When you want to convert a roofing insurance claim from a denial to a full replacement, there are six main options at your disposal: Reinspections, Estimates, Engineer Reports, Public Adjusters, Arbitration and engaging State Insurance Regulators.
- REINSPECTION: A reinspection is when a homeowner requests that a different adjuster perform a second, full inspection of the property. You should come to the reinspection prepared to walk the adjuster through all of the documented damage. Clearly marking damage and performing test squares can give you credibility with the adjuster but be careful and know your local adjusters; this can sometimes backfire if they want to be the ones to mark any damage found. When reinspections are done correctly, you can expect conversion rates as high as 50%.
- REQUEST AN ESTIMATE: Requesting an estimate from a 3rd party supplementing company is a great option for contractors who do not have experience challenging denied claims or lack experience writing Xactimate estimates. Having a well written Xactimate is the first step in the denied claim supplement process. During this stage, a 3rd party supplementing company will also be able to quickly look at the existing documentation and provide their professional opinion on the damage photos and the case to move forward. An honest 3rd party can save contractors time just by helping them avoid denied claims that have a low probability of approval.
- ENGINEER REPORT: Engineer reports are another tool to challenge a denied claim. If the adjuster and contractor cannot agree on whether or not the damage is storm related or if there is enough damage to warrant replacement, then in most cases the homeowner may hire an engineer, at his or her expense, to inspect the property. In most cases if the engineer determines that the damage warrants replacement then the insurance company will reimburse the cost of the engineer. However if it is determined that there is not enough damage to warrant replacement, then the homeowner will likely be out the expense of hiring the engineer.
- PUBLIC ADJUSTER: Another option is to get a public adjuster involved. The public adjuster works on behalf of the homeowner to provide another expert inspection and has the ability to negotiate with the insurance carrier. It is a good idea to have a few vetted, trustworthy public adjusters ready to recommend. Public adjusters can be very expensive and typically should be a last resort as in most cases if there is valid damage on a property then any one of the other items mentioned in this post should ensure a similar outcome at a fraction of the cost.
- ARBITRATION: Arbitration is the formal means to dispute a denied claim. The process involves both parties sending an arbitrator to inspect the property in question. Typically the carrier is represented by a senior adjuster or some other highly credentialed inspector, while the contractor represents the homeowner. Remember arbitration takes time (hours and hours in most cases), time that could be spent going to find another deal instead of fighting a tough battle that distracts you from helping more clients. It is warranted in some cases however we at Elite feel that arbitration and public adjusters for that matter, have become vastly overused in our industry when a contractor’s focus should be on getting the next deal and repairing as many homes as possible. Like Kenny said…know when to fold ‘em.
- DEPARTMENT OF INSURANCE COMPLAINT: In cases where storm damage is obvious, well-documented, and there exists a clear storm date, etc., and the carrier refuses to engage the claim in good faith, a contractor could recommend that the homeowner file a complaint with the Department of Insurance in that state. This action is not intended to change the outcome of a specific claim, but more so to level the overall playing field moving forward. This could help state regulators identify and weed out bad actors on the insurance side.
No matter the step, denied claims require more buy-in from the homeowner. Sometimes the homeowner will not want to move forward with the claim but when they do, they often become more emotionally invested and determined to get the denied claim overturned. That’s why it’s so important for the contractor to educate their clients on the process, set expectations and communicate every step of the way. Remember it all starts with being well-trained on how to identify damage, performing an accurate thorough inspection, and only working on properties with valid damage. If you start there your likelihood of having a denied claim overturned goes up significantly.