Sustaining Your Roofing or Building Business Through Understanding Insurance

by admin | June 10th, 2014
Business with roofing insurance

Sustaining your roofing or building business not only hinges on understanding your liabilities, but also knowing the in’s and out’s of your client’s insurance. However, to get someone to become your customer, you need to have the credentials to prove that you do quality work.


  • You must be fully accredited through The Better Business
  • Find out how you can get on Angie’s List, which is used by consumers to find contractors.
  • Fully Licensed-You need to have a copy of your construction license to show to the customer.
  • Full Bonding Capabilities– Better than that is to be bonded. (We will be writing an article about that for a March 1st blog.)

Your Insurance

  • Make sure you have the General liability and Workmans Compensation Insurance need to protect your workers and your businesses.
  • Email your client a copy in a PDF of your insurance certificate. Your insurance agent can help you.

Your Customers Insurance

It’s important for you to understand what your client’s insurance covers.

  • ACV:  This is the amount that the insurance company computes initially, and it is the replacement cost minus the depreciation of the roof. This is not usually the final figure.
  • Adjuster: As you probably know, this is the insurance person that evaluates the damage to to the property.
  • Deductible:  This the amount the client will have to come up with on their own.
  • Public Adjusters: Are persons, who works for the client. They become involved when the customer has extensive damage.
  • PWI: It stands for Payment When Incurred. It usually has to do with tearing off the roof.  If PWI is in the insurance adjustment, it is an option. The insurance is telling the customer how much they will pay for having a specific type of work done.
  • RCV: This is determined by the local prices for construction.  Most insurance policies have an endorsement for this, and it means the insurer will pay full replacement costs.
  • Recoverable Depreciation: This means that adjuster will come up with a figure based on the value of the roof minus depreciation. If a roof is worth $10,000, and it is ten years old; then the depreciation is based on a roof life of 25 years. That calculates to a figure of $6,000, which $2,000 will be paid upfront, and the rest at the completion of the job.

Information that You Need to Give to the Consumer

  • Workmanship Warranty: You need to emphasize to the client that if they have any problems with your work. They need contact you immediately to have you fix it.
  • Manufacturer Warranty: Explain to your customer that your materials are warranted by the manufacturer for a certain amount of years. Also make your client aware of the fact that the warranty is usually pro-rated after five years.

Insurance payouts are many times your major source of income. The more you understand about the owner’s policy, than the more likely getting paid for your service will go much more smoothly.

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