Roofing Insurance claims Overhead and Profit explained: Greed Or Must?

Roofing Insurance claims Overhead and Profit explained: Greed Or Must?
0:26 what is Overhead and Profit?
3:00 10% overhead, 10% profit
5:11 overhead expenses
7:28 insurance excuses for not paying
8:06 1 trade vs 3 trades (the first excuse)
9:43 a job was not complex enough (the second excuse)
10:14 roofing doesn't count? (the third excuse)
10:53 who is greedy?
11:59 insurance?
13:06 homeowner?
15:16 contractor?
17:22 about Steve Patrick
-How much PROFIT does a roofing company make?
-How much does a roofing company spend each month on OVERHEAD?
-Who's got the most GREED? Insurance companies, homeowners or contractors?
Watch and learn from Dmitry as he analyzes this important topic!
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#O&P
#InsuranceClaim
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[@sparklander]

Now you've got me checking the figures on my recent roofing claim to see what my insurance company offered as "overhead and profit." I don't see a line item charge for "overhead and profit" on my estimate from Travelers here in Colorado on a $35K claim.

[@moldsquadrestorationcontra6252]

Dmitry. Is one of the best roof coaches in the game. I'm learning so so much from you. I am in Water Damage Restoration and have been trying to add a roof division to the business for about 3 years. I want to revenue at least $1M in sales my first year. And once I'm established we'll enough, we will move to higher expectations... Keep doing these videos. And I will watch every single one of them. You keep it real. You are kind of like a business partner to us. You explain EVERYTHING... You have definitely changed roof education... While other roofers show us how to install the materials.. you show us how to become millionares. Can't wait to do an interview with you. But I have to be like Eric reno status before you interview us... Bless you....

[@Urielgamboa94]

This is the best roofing industry content on KZbin!

[@RoofingInsights3.0]

Thank you sir

[@shaneMcguire1981]

I'm glad I pulled this video up. Great content. I really appreciate your knowledge and experience!

[@deadlymig123]

15 claims this year with 10% overhead and 10% profit, was about an extra 2000$ a pop

[@davidcarpenter7394]

Had an adjuster deny o&p on a roof,siding,gutter,fascia replacement for hail claim. Said wasn’t enough trades… pretty much full exterior….

[@triumphroofmanagementservi610]

Excellent presentation! I hope the insurance industry is listening. I am a paper contractor but with my share of overhead. $60k mobile office, software subscription, cell phone and landline.

[@harrisonbounds1089]

I am a roofing contractor in Mississippi. I find your videos very helpful. A video would be helpful on how you argue with an insurance company for O&P.

[@rooferchicks]

Great video on o&p Dimitri! Thanks for the info. We just had Steve Patrick train our company a few months ago, he was great at illuminating us on the subject

[@JaredMorganFilms]

This may have already been said but read the Xactimate white paper. It specifically states that O&P is for rent, salaries, utilities etc.

[@anthonyelder6689]

Enjoyed the video. I worked for State Farm as an adjuster for years always preaching coordination and complexity. Now I am a contractor and I see how wrong we were to deny contractors O&P. Every year we would change our stance on O&P sometimes going as far as to ask for a general contractors license. Every year we would find ways to pay less and less. In 2008 we automatically paid for all vents, valley metal and pipe Jack's. If we missed a pipe Jack we could get written up. Then all a sudden in 2009 we were told do not pay for any of these items unless it is actually damaged by a physical loss covered under our policy. Such crap if you ask me. This leads to contractors reusing vents, drip edge and other items that should be replaced when doing a re-roof.

[@RoofingInsights3.0]

Thanks for sharing

[@SaltwaterOutlaw]

I like you Dmitry, and you do offer some great content. I feel more so for new roofing/restoration contractors (which is awesome, I wish you were around 17 years ago when I started), but regardless even an OG like me learns a new trick or two so keep up the good work. Although I wish I could get O&P on a roofing only job, or even a roofing, siding & gutter job for that matter, it rarely happens. Unfortunately we haven't got hit with a good storm yet this year (or anything great last year either), Current Xactimate numbers are pretty solid in Chicago on roofing. A 1-layer walk has a 40%+ margin (as long as the proper line items are added correctly) and if it's steep, 2 layers, needs a lot of I&W shield, etc. we could be at closer to 50% gross margin based on current numbers. So although I wish, I don't agree with your analogy. You are making it seem as if the Xactimate line items do not have profit built into them. If that was the case of course you would need a 20% mark up over the cost of labor and materials, shit even 20% would not be enough obviously, but that's not really the case. I know some Xactimate numbers very a lot in different zones/states, and we are luckier than most in Chicagoland so I guess that is something I need to consider, but I'm sure even in the worst zone it wouldn't be much less than 30% already built into the line item prices. Also, why would a roofing only job get General Contractor's O&P? I really doesn't make sense as a general contractor doesn't need to be involved it's only 1 trade. Now when there is a beast of a storm and we are dealing with coordinating, scheduling and managing roofing, siding, gutters, garage doors, window damage, fence/deck repairs/staining, interior leaks/stains, AC units, etc. then damn right it should be paid and it kills me when we have to fight for it in this situation, as now it is fully deserved having to deal with all the extra bullshit, in which most of the smaller trades don't have much of a margin in the line item to begin with and are just a hassle you are doing for the customer to help them out. But I just don't see the justification for a roof only, I don't think I have gotten O&P on a roof only job in 17 years. Either way, just figured I would give my opinion.

[@forwardhomeenhancements2622]

I liked how you laid it out.

[@esaujagernauth3677]

Great explanation.

[@willhall7684]

That's a great point. If anything the complexity or amount of trades should be reflected in residential supervision/project management- per hour.

[@arnw7933]

I usually don't even know how much insurance has paid the home owner . I put a bid on the job ,sometimes homeowner has to come up with more money weather it comes out of there pocket or we go back to insurance with the actual scope of work or the home owner got more money than my bid is for and gets to keep a couple of bucks ..... I do not let insurance dictate my pricing

[@travisedwards9983]

One of many reasons we deal with the insurance company for the homeowner, whatever we can get them to pay is what we do the job for. Including O&P, all owner ever needs to pay is Deductable and any upgrades, makes it easy for us and easy and smooth for owner. Plus we use Xactimate software for pricing just like insurance

[@pinnacleroofing9841]

The only roofing companies surviving w/o O&P are the ones that don't carry the proper insurance coverages - IMO

[@1008gonzo]

It took me like 4 months of watching your channel to realize you were the guys sitting in front of me at Steve Patrick in February that left their camera. Funny to see this come up on the channel now.

[@RoofingInsights3.0]

What camera? 😂😂😂

[@roofingdyi6.7powerstroke8]

Yeah that's true

[@idjrod49]

What do you do when the customer wants to keep the money they promised to give they contractor? After the work is done. TX

[@Kotsoteka55]

In Texas Why are roofers able to make a profit while absorbing the deductible. 2019 Law changes now homeowners must pay the deductible so I assume roofers are making more. Now if your insurance company gives you o$p does the roofer get this?

[@gliddenrivera6846]

What if insurance is not involved, is O and P still proper? The problem is that terms that govern O and P are written by the insurance. It is not a right, usually O and P is about complexity of scope and overlapping trades.

[@dr_920]

Insurance company pays new roof, window repairs and chimney chase cover replacement. Some contractors told me they won't do the chimney or they won't do the window repairs. I understand that they are there for roofing. However, I found it is difficult to hire another window company or chimney guy to do the work and ask them to deal with the insurance. What is my option?

[@jaked5823]

As a homeowner that is dealing with state farm right now about this exact issue, how should I go about convincing them to pay o&p. My contractor is super professional and I feel they deserve it.

[@joerostkowski7313]

Me aswell with state farm, drop them the y low ball, and raise your deductible in a 25 page letter that nobody reads and lowers payout as your house gets older,they factor age into depreciated value. Your property value can go up so will your insurance, but they will pay less percentage as the house gets older. They double dip.

[@willhall7684]

Late reply, but ask them if you have o&p coverage. Then respond that your roofer is charging o&p and ask why that is your responsibility to pay out of pocket when you have the coverage.

[@edmartinez6946]

O&P is not needed on roof only project.

[@jimrodgers4149]

Nice break down. I also view it in a different way when it comes to O&P inside of Xactimate. Xactimate makes pricing for each line item to be fair market value for that line item. (That is a different discussion in itself for certain line items, but that is their goal) The price in that line item can only be fair market value if the entire estimate is written by the rules of the actual software. If you do not abide by the rules of Xactimate on how an estimate really works then you do not come up with fair market value for a job. So when Xactimate publishes a white paper on O&P to explain how and when it is used then if an estimate goes against those rules then the estimate is no longer a reflection of fair market value. So to the homeowner out there, in most cases, if the insurance company uses Xactimate and does not add in O&P then they have shorted your contractor fair market value. Keep in mind your pay fair market value on your premiums and deductibles.

[@whoknowsu1002]

So your saying that Xactimate is technically commiting fraud by relying on the average persons ignorance in understanding how the hole thing works because let's face most people are use to buying something and the profit is added into the purchase price and when you get into detailed appraisals and people not wanting others to know what they make money per job that's when this type of things show up so be honest not greedy

[@jimrodgers4149]

@@whoknowsu1002 Xactimate is not committing fraud at all. If a contractor wants to use Xactimate as their estimating software then I believe that particular contractor should spend as much time and money to learn how to use it properly. If you talking about fraud based on ignorance then I would say you could make an argument the Insurance companies commit fraud all the time since the very large majority of homeowners and contractors both do not fully understand their policy and what it really means when you have a claim. I say hire experts and the experts need to be just that, experts. There are too many contractors, adjusters, public adjusters, ect. that do not know much at all.

[@gregcrockerroofmd]

do roofers like madsky or they just hurting the market

[@abisaigutierrez6246]

Make a videos on getting your first costumers.

[@RoofingInsights3.0]

We did, look it up: how to start roofing business first year

[@franciscocharco2291]

What company’s do you recommend??

[@RoofingInsights3.0]

For what?

[@hamzarifai1014]

Do you know us at CPE Roofing?

[@MrTop419]

👊👊

[@forwardhomeenhancements2622]

Don't think Insurance companies should write the check to the homeowners what so ever.

[@swingerhead]

I dont think adding O&P is an issue for most adjusters. But why would you incur a higher cost to hire a GC to do a roof only when you can just hire a roofer to do it for 20% less? If i was having someone install a fence id call a fence guy. Now if I was replacing a fence, siding, roof, some other stuff a tree took out you bet Id let a GC take care of scheduling everything and handling any issues that come up. From what I understand the unit prices in the estimating software includes each subs costs in the line items so the roofing line items would be enough to take are of that one job. Regarding warehouses, no one warehouses shingles they call ABC and get it dropped off along with the nails. Everything else is on the truck. And yes its totally legal in the states that things are handled that way or it wouldnt be done.

[@RoofingInsights3.0]

Roofers needs 20% overhead and profit just like GC does. No one can work for material and labor rates and not charging enough for profit and overhead. Let’s say roofer or GC does 10 roofs per month. Both have office and receptionist to keep up with books and paperwork. So GC can charge 20% to cover that and roofer can’t?

[@swingerhead]

@@RoofingInsights3.0 The way I understand it thats in the labor rate for the trade already, insurance, overhead etc. If a roofing labor rate say $90 per hour for example, you and I both know those guys arent getting $90 an hour. in NY state a roofer might make $30 an hour down to 15-20 in other areas. The additional amount is the O&P for the roofer. Show me a roofer that gets on his check stub $90 an hour and Ill buy you a drink

[@welfarecheckx4433]

O&P is paid when coordinations are necessary. When only replacing a roof you only have roofers involved. Those items you have listed for overhead are the price of doing business that every business in America has to pay including fast food restaurants. It’s not the insurance company’s responsibility to pay for your insurance has or office supplies.

[@michaelmorganti1631]

@@welfarecheckx4433 Buddy... it’s simple math... where does the money come from to pay for company overhead if not from the service you sell/ provide? You think it just magically gets paid by the overhead fairy??? I’ve got news for you my man, the overhead fairy (similar to Santa Clause) simply isn’t real. This means those expenses must be paid based on a percentage of every job. If you don’t collect it on one job then that cost has to be passed on to the next customer. Does that sound fair to the average consumer? No it definitely doesn’t. You have to stop drinking that carrier Koolaide and just try to think about this stuff logically from the perspective of the average consumer and average business owner. Insurance carriers collect all of their overhead costs from insurance premiums. You can bet McDonalds calculates their overhead costs into the price of every Big Mac. Why would contractors be any different? Also, you’re clearly confused. You stated that all of those things are “the cost of doing business” (which is clearly regurgitated from your in house adjuster training). I’ve got news for you, “the cost of doing business” is literally the definition of overhead expenses. Not all contractors are crooks, we simply don’t all work out of a garage and some of us have a legitimate business with overhead costs. It’s really not that hard to understand I wish you guys would stop acting like it’s so absurd for us to get paid a healthy margin and stay in business.

[@roofingdyi6.7powerstroke8]

Yo

[@edmartinez6946]

Greed.

[@TheGolfster3]

Call me! I will show you how to get it every time!

[@SaltwaterOutlaw]

Oh really... I have been a storm restoration contractor for 16 years (as well as a PA for 7) and there is no way to get it every time, if we were to get O&P 50% of the time that would be amazing. A lot depends on the storm. If it's a legit storm that damages enough different trades beyond roofing, siding & gutters (i.e. fence/deck staining/repairs, interior leaking, windows/window frames, AC units, etc.) then it is a lot easier to justify it and it is paid more often. On lessor storms without a lot of incidental damage outside of the roof/siding, it's nearly impossible. Sure I suppose you can take it to appraisal and then if that doesn't work out take other legal action but most GC's are not willing to spend the time, money and energy on all of this and just accept the insurance isn't going to pay it, move on and spend the time and energy going out and selling another job. I have even taken classes on the whole "Get O&P 90% of the time" and sure I gained some knowledge that helped out in certain situations but overall was pretty much BS. Anyway, if you have the magical bullet, hit me up I would love to hear more.