Here we are at the beginning of another storm season. Already this year, the hail across the country has been more active than normal, and the projection for the coming hurricane season is that this year's batch of hurricanes has the potential to be even more powerful than last year's.
It's a simple fact that hurricanes sweep in and leave a path of destruction in their wake. In many cases, months after the event, some homeowners are still struggling to replace a roof damaged in a storm - a roof they were told needed to be replaced.
But did it?Recently, I met with a large insurance company regarding its policies in Florida and the coming hurricane season. In the course of that meeting, we reviewed the claims that were filed and the roofs that were totaled and bought by the insurance company. As I looked at the roofs they had considered totaled, something hit me. In over 50 percent of the cases, the roof never needed to be replaced and could have been repaired.
Here's the reason; When the insurance companies come to an area following a storm, a roof that has 25 percent or more damage is automatically considered a candidate for replacement. That means that a two-year-old roof that sustains 26 percent damage in a storm could be completely replaced, even though a repair could have saved everyone a lot of time and money.
So why do replacements win out? After the hurricanes, the storm chasers sweep in. They often bring with them limited roofing knowledge and a team of unskilled and untrained salespeople. They aren't concerned with building relationships. They aren't concerned with helping people. They're concerned about getting into a ravaged market and putting up as many roofs as they can as quickly as they can to make as much money as they can.
The problem is they are the only ones who win. The homeowners certainly don't win. They receive a roof replacement they may not have needed at a quality level that is less than they deserve.
The professional roofing contractors in that market certainly don't win, either. The storm chasers come in and sweep up opportunity. While the professional roofing contractor takes the time to meet with homeowners and thoroughly evaluate the damage done to their home, a storm chaser will take one look at a house and write it off as a replacement, even though the roof might need only a quick and relatively painless repair.
Often, though, even the professional roofers don't want to mess with the prospect of a repair because they may feel there is more money to be made in replacement. The fact is that, if done properly, repair work can generate a higher gross margin than replacement work, and, in many cases, it's in the best interest of the customer. Plus, you'll face much less competition in repair than you will in replacement. When you can repair a roof, your client doesn't have to wait months for a new roof to be installed during a busy storm season. The homeowner will appreciate that, and you'll have a client for life that will eventually buy a full roof system at a later date.
Insurance companies often feel pressured into replacing any roofs damaged by storms. Once homeowners hear from a contractor that their roof needs to be replaced, they'll start thinking it, too. They'll call for a second estimate for a replacement, and that second contractor normally won't think to suggest a repair because the homeowner is set on replacement. By the time the insurance company gets involved, the homeowner is confident the replacement is necessary and anything else could result in the threat of legal action.
The real tragedy in this scenario is that everyone pays. When storm chasers and unscrupulous companies sweep in to make a quick buck, the homeowner pays. They pay in a lower quality roof, but in the long run they'll pay in higher insurance premiums. But those higher premiums won't be passed on only to them. If the insurance companies face an onslaught of claims, everyone's rates will rise eventually. Plus, you and I will pay too in the repair opportunities that get lost in the storm.
This storm season, I urge you to think twice about replacements when you give out estimates to homeowners. Don't write off repair work. You could end up with a higher gross margin, less competition, and some very happy customers.