Promoting and Working With Insurance Claims

We’ve seen some incredible storms already this year, and there always will be more. With that in mind, I’d like to share some thoughts about insurance work.

Storm damage may not be the kind of work you like to do but it needs to be done. It’s also a chance to find new clients and reconnect with previous clients. Let them know your business is ready and able to help them recover.

A recent newsletter Devon received from a writer who isn’t in the construction industry had fantastic advice for contractors:

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Hailstones bombarded a neighborhood we used to live in and damaged the roofs of many of the houses.

Because this had never happened to them before, many of our former neighbors were unaware that their homeowner’s insurance covered hail damage.

A local roofing company put door hangers on their front doors.

The headline read:

“Get Your Insurance Company to Pay for Your New Roof.”

And it generated lots of new business for the roofer.

Why did the campaign work so well?

1—It was timely. The door hangers were placed on the doors immediately after the hailstorm.

2—The reader learned something important—something he may not have known or been aware of.

3—The headline is yes, a sales pitch—but it is also useful and helpful information.

4—The door hanger offered a quick and convenient solution to an urgent problem.

5—The offer saved the consumer time and money.

6—Also, it was not a gimmick or deception, but rather honest, straight talk–and the truth.

7—It prevented homeowners from making a costly mistake–namely, NOT calling their insurance company because they were unaware they were covered.

(Reprinted with permission from Bob Bly, www.bly.com)

That’s a great idea. There are other things you can do to help your clients.

Tell Them What They Need to Know

Give clients and potential clients the same information and the same warnings you’d give your mom if she was facing damage to her home.

Some contractors send out notes before storms hit that list all the emergency information their clients might need during and after the storm.

Warn them about the hazards of getting involved with a storm chaser. Those are the companies who move into an area to pick up insurance work and move out when the work is done. Some are legitimate and do good work, but your clients need to know there are bad ones as well.

Warn them about high-pressure tactics, requests for large down payments, one or two page contracts, etc. Tell them what they need to know about the repair process and how to make sure they’ll be treated right.

Dealing with Insurance Claims

In repair work, you’ll probably be involved with insurance claims. That means you’re going to run into issues you don’t normally bump into with remodeling or new home construction. Points to consider:

1. Be nice to the adjusters. They don’t have an easy job. But remember that nobody, and I mean nobody, can work for 10% overhead and 10% profit and stay in business. Don’t cut your price to get the work; using the same pricing methodology you always use and stick to it. You might need to change your paperwork; we discuss how to handle that in the book Markup & Profit Revisited.
2. Collect all depreciated and deductible amounts upfront from the client before you start the job. If you don’t collect them before starting, you stand a chance of not getting paid on either or both. Adjusters often don’t want contractors talking about depreciation and deductibles because they “upset” the building owner. Do it anyway; you’re the one who has to collect them, and you’ll be even more upset if they aren’t paid when the job is complete.
3. Be sure you know who payments will come from. If payments will come from your client, schedule your down payment and progress payments like any other contract. If you’re going to be paid by the insurance company, make sure that the check is given directly to you and is made out in your name only. If the check is made out jointly to you, your client, and the mortgage holder, it can take a long time to get access to the funds. Guess who waits for their money while the wheels grind?

There are many other issues to consider. Review Markup & Profit Revisited, and Craftsman Book Company wrote a book dedicated to insurance work titled Insurance Restoration Contracting (available as a printed book and as an eBook) to help you succeed.

Help your clients get their homes and buildings put back together and make a reasonable profit for your effort. That’s why you’re in business.

“A good plan executed now is better than a perfect plan executed next week.” — George S. Patton

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