Insurance Proceeds 101


The process and order of operations with insurance claims are generally fairly consistent. This overview will help you in establishing SOPs for your new roofing company.

To explain and visualize the workflow for a roofing company, especially for homeowners and those new to the roofing business, let’s break it down step-by-step, ending with a workflow diagram.

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A very Simple Explanation of the Workflow for a roofing company pursing insurance projects and benefitting from the the moderately increased profit margins possible; in contrast compare to cash deals where competition is real, in addition to a general race to the bottom concerning materials, labor, and general disregard considering the margins for these deals.

Customer Lead

This is the starting point where potential customers show interest in the roofing service, typically through a phone call, website inquiry, or referral.

Prospec

Once a lead shows more concrete interest, they become a prospect. Here, the company engages more deeply to understand the customer’s needs and potential roofing issues.

Signed Contingency Contract/Final Contract

If the prospect agrees to move forward, they sign a contingency contract which becomes binding once insurance approves the claim. A final contract may follow after negotiations and final terms are set.

Approval from Management

The signed contract and project details are reviewed and approved by company management to ensure everything is in order before work begins.

Scheduling

The project is scheduled based on the availability of resources, including labor and materials, and the customer’s preferred timing.

Material Order

Roofing materials required for the project are ordered from suppliers.

Scheduled Day for Construction/Collection of ACV

Construction begins on the scheduled day. ACV (Actual Cash Value) payments, which are the initial insurance payouts, are typically collected around this time.

Completion of Project/Collection of Deductible

Once the roofing project is completed, any deductible the homeowner is responsible for is collected.

Invoice for Depreciation

An invoice is sent to the customer for the depreciation amount claimed in the insurance, which covers the difference between the old roof’s value and the new roof’s cost.

Collection of Depreciation from Customer

Finally, the company collects the depreciation amount from the customer, completing the financial transactions related to the roofing project.

Workflow Diagram Creation: