# I'm sick of Roofers & Storm Chasers



## kcremodeling (Nov 8, 2009)

Back in April, Johnson County Kansas was hit with a massive hail storm that impacted at least 25,000 homes. One insurance company alone has reported over 7,000 roof claims, all related to the storm. Since then, the streets have been cluttered with Texas tags and brand new trucks with all the upgrades. 

Now I understand that the homes need to be repaired and there are clearly not enough local contractors to handle all the claims in a timely manner. The thing that has me upset has been the feedback that I have received from other contractors who have profited from the storm. I feel like a vast majority of these guys are committing insurance fraud. I've had 2 guys tell me that they almost always take care of the deductible as part of the agreement. 

These guys also told me that they cover all the taxes on the jobs since the workers are all being paid cash. One reported a $12,000 profit on selling a single roof. This is very tempting to pursue these types of profits, but I just feel like the whole thing is a little sleazy. I would love to hear some other opinions from both roofers and remodel contractors.


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## catfish (Jul 19, 2007)

Sounds pretty normal from the storms I've been on. Business as usual for storm-troopers.


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## Jaws (Dec 20, 2010)

In Texas we have tags from everywhere, because there is actually some work here. Storm chasers get a bad rep because many, not all, take the money then run, or do horrible work in a big hurry for a lot of money. 

I don't compete with them but I imagine if I did I would be frustrated. Then again I would be hauling azz for the nearest work no matter where it was, if I was out of work and had no prospects.

Texas just passed some new laws a few weeks ago to protect homeowners from this, in lieu of the wild fire damage . Haven't read it yet because I don't plan on pursuing disaster work because I dont know how to pursue it with out feeling scummy. I fought the big fire in Spicewood where 34 homes were lost and another 50 were damaged. Would feel like a conflict of interest to pursue any work 
from it, unless it was from a refferal or from one of my ads.


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## go dart (Dec 6, 2005)

I believe theres enough crews locally to handel damage in the 10000 roof range. with over 25000 damaged the price gouging would be unreal if storm chasers didn't follow the storms. Lets face it the men actually doing the work whether local or brought in arn't " local boys " anyway. Every home thats insured had an adjuster spot it and he sets the pricing.


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## Splinter hands (Aug 31, 2011)

go dart said:


> I believe theres enough crews locally to handel damage in the 10000 roof range. with over 25000 damaged the price gouging would be unreal if storm chasers didn't follow the storms. Lets face it the men actually doing the work whether local or brought in arn't " local boys " anyway. Every home thats insured had an adjuster spot it and he sets the pricing.


Are you implying they hire illegals down there?:whistling

IMO stormchasers are the bottom of the barrel. I am sure there are plenty of roofers within a 50 mile radius to get the job done. The problem is the stormies bombard the area and give a bunch of false promises before the legit guys can get there.


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## Jaws (Dec 20, 2010)

Splinter hands said:


> Are you implying they hire illegals down there?:whistling
> 
> IMO stormchasers are the bottom of the barrel. I am sure there are plenty of roofers within a 50 mile radius to get the job done. The problem is the stormies bombard the area and give a bunch of false promises before the legit guys can get there.


 I agree most of the contractors I've met who were storm chasers were pretty scummy. So are a lot of out of state guys who have moved here because we have some work here. 

I will say that if I had no work and a hurricane hit somewhere, I would probably go. I am not bottom of the barrel. A lot of places have no work.


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## Splinter hands (Aug 31, 2011)

jawtrs said:


> I agree most of the contractors I've met who were storm chasers were pretty scummy. So are a lot of out of state guys who have moved here because we have some work here.
> 
> I will say that if I had no work and a hurricane hit somewhere, I would probably go. I am not bottom of the barrel. A lot of places have no work.


I am talking about the "professional" stormchasers. The guys who stormchase for a living because they can't stay in one place too long because of the shoddy work. The guys who prey on homeowners after a storm.


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## CarrPainting (Jun 29, 2010)

you get what you pay for. A local reputable roofing contractor will do a better job in most cases than someone not from the area. Same goes for just about any trade.


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## kcremodeling (Nov 8, 2009)

I got a call from a past client today. We had finished their basement a couple of years ago. She was looking for somebody to complete to the repairs that were unfinished by their out of town contractor. I guess they sold the job to replace the roof, gutters, window, screens, and paint the entire house. After completing the roof the company has apparently become impossible to track down. She said that it had been an exhausting experience and was very unsatisfied with the company. 

For many people this would be a no brainer... but it is always smart to work with a local contractor who relies on their reputation to attract business.


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## smalpierre (Jan 19, 2011)

I've been working for a roofing contractor for a few months now, still doing my thing - which is tough - but here's my take:

We do a lot of insurance work. We do it for what the insurance company pays. Not to get into pricing - but when I bid work, average is somewhere around 200 - 225 / square for a tear off.

Some insurance company sent a summary that added up to something like 160 / sq - we had to call them and straighten them out. You can't be a legit company and only get that in this area. Some areas it'd be more like twice that.

Usually they are right in the area we need to be at to make a profit. 12k profit on a roof? That's pretty outrageous. I can't imagine an insurance company paying that much unless it's a huge roof.

Take a 50 square roof for example. That's about 10k. Materials cost about 4k for that around here, and labor cost about another 2500. Then I get a sales commission, and there's overhead ...

That's a decent size roof, and the company profits somewhere around 2500. Not bad for a day's work, but it's a FAR cry from 12k profits on a single roof. That guy was probably full of ..it!!!

Im going to repair a roof tomorrow where the insurance company paid for his roof, and the storm chasing jerks took his money and ran. They were all over the news here. I feel bad for the guy, because now the money is gone.

Those guys make it really hard for legitimate contractors to make a living, because it puts us in a position of mistrust. The guy I work for is the president of the Chamber of Commerce, is well known and respected, and is generally a good guy that is trying to make money the honest way.

Indirect collateral damage storm chasers have caused goes like this: I went to a hail damaged house. The HO is an adjuster himself ... he called his insurance company - they told him they didn't see any storm damage. I saw it everywhere, and all over the neighbors houses too. The adjuster had the audacity when we called for a reinspection to say no, then changed his story to "the damage I saw was inflicted by a human or the gutters and mailbox would be trashed too" ... yeah, hard ass aluminum vs shingle? And the mailbox was under trees. He said he'd send an engineer out. Then he asked who the contractor was - and he said "Perry from Roofing Solutions" and the other guy before me (his GC that's in the hospital now, why he called us ...) the adjuster said "I've ran across THAT guy before ..." which is total BS - I've only been with them for a couple of months, and have never met an adjuster from his company ...

So the guy had made up his mind that it was the roofing contractor up there with ball pein hammers instead of hail - because apparently we are all storm chasing hack frauds?

Anyway - I've been contemplating just doing my thing like I was before and saying to hell with roofing because it's difficult to convince someone that you aren't one of those guys.


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## kcremodeling (Nov 8, 2009)

smalpierre said:


> 12k profit on a roof? That's pretty outrageous. I can't imagine an insurance company paying that much unless it's a huge roof.


It was a 6,000 sf ranch so yeah, it was a pretty big roof. I really don't think the guy was lying. He might have exaggerated a bit but the guy's not a liar.

Roofing is just like any other trade, a handful of bad contractors can give the whole industry a negative image.


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## BamBamm5144 (Jul 12, 2008)

smalpierre said:


> I've been working for a roofing contractor for a few months now, still doing my thing - which is tough - but here's my take:
> 
> We do a lot of insurance work. We do it for what the insurance company pays. Not to get into pricing - but when I bid work, average is somewhere around 200 - 225 / square for a tear off.
> 
> ...


WTF?

There is no way to be legitimate at $225 a square. 50 square and you're materials are 4k?! What are you putting on? My shingles alone are $88 a square. Last 50 sq roof I did my materials were 6200. Dumpster $500. Labor $2900.


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## jkfox624 (Jun 20, 2009)

Must be i'm missing something in your numbers. 50 sq at $225 comes out to $11250. Your numbers are $9600 leaving 17% for profit and overhead. Now i have no idea how you run your business or any of that nonsense but to say there's no way to be legitimate and charge $225 a sq doesn't make sense to me with the numbers you tossed. Please correct me if i'm wrong.


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## BamBamm5144 (Jul 12, 2008)

jkfox624 said:


> Must be i'm missing something in your numbers. 50 sq at $225 comes out to $11250. Your numbers are $9600 leaving 17% for profit and overhead. Now i have no idea how you run your business or any of that nonsense but to say there's no way to be legitimate and charge $225 a sq doesn't make sense to me with the numbers you tossed. Please correct me if i'm wrong.


Who are you replying to?


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## jkfox624 (Jun 20, 2009)

BamBamm5144 said:


> Who are you replying to?


Your post about the last 50 sq roof you did. I'm sure i'm tired and more than likely misinterpreting what you said. Around here $225 is the norm.


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## BamBamm5144 (Jul 12, 2008)

jkfox624 said:


> Your post about the last 50 sq roof you did. I'm sure i'm tired and more than likely misinterpreting what you said. Around here $225 is the norm.


Yeah you must be sleepy, I never said I do it for $225 a square. I'd be paying people at those prices.

A lot of guys must be working just to have something to do at $225 a square all day where you live.


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## MJW (Jan 27, 2006)

Look at the location Bamm. Cheaper and less materials per job, plus cheaper labor, less taxes, less insurance, less WC, less heating days per year, less salt on your vehicle, less gvmnt interference, more days without rain, less days of snow and cold, less ice dams....etc


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## larryb (May 23, 2008)

kcremodeling said:


> Now I understand that the homes need to be repaired and there are clearly not enough local contractors to handle all the claims in a timely manner. The thing that has me upset has been the feedback that I have received from other contractors who have profited from the storm. I feel like a vast majority of these guys are committing insurance fraud. I've had 2 guys tell me that they almost always take care of the deductible as part of the agreement.
> 
> These guys also told me that they cover all the taxes on the jobs since the workers are all being paid cash. One reported a $12,000 profit on selling a single roof. This is very tempting to pursue these types of profits, but I just feel like the whole thing is a little sleazy. I would love to hear some other opinions from both roofers and remodel contractors.


"Profited from the storm?" Profit is a good thing...when earned honestly. What/where is the ins fraud?

While paying deductibles may not be construed as ins fraud, it is a practice that I and all reputable contractors disagree with. Because so many local and out of state contractors offer to bury deductibles, either directly or though phoney "sign discounts", thereby sleazing up the market, many states have passed laws prohibiting the practice. While I don't like more laws, no "deductible buying" is good legislation because it levels the playing field. I never paid a customers deductible and if they demanded it, I'd walk away knowing that, in a storm situation, there was always a few hundred other potential customers to talk to.

In every region there are always going to be some local retail contractors who hire illegals, don't pay ins, do hack work, give away their work, etc. just as there are out of state stormer contractors who come into town after a storm and operate in the same fashion. My experience over 40 years says that some retail contractors dislike out of state stormers more because of the work they "steal" from the local guys than the quality of their work. However, once the local guys learn how to contract storm damage the right, honest and legal way, their perspective (and their profit potential) is completely changed for the better. 

In these tough economic times, a retail contractor who frowns upon storm damage work hurts themself. HO's want to spend less and don't have to get the work done so it's harder than ever to sell retail work at prices that a self respecting pro deserves. When a storm comes through a town or city however, instantly creating millions of dollars worth of work, complaining about out of state "stormers" profits no one. "If you can't beat em, join em?" 

If you "join" them by learning what the good ones already know and do things on the "up & up", you'll become a local hero and your workload, your profits and your future goodwill will increase exponentially which is what all thinking business owners want. 

If you decide to complain about "stormers" (local or out of state) who do things the right way and generally succeed at getting P&C insurance companies to pay their policy holders what they are truly owed instead of learning how to do it yourself and taking advantage of the windfall, you've done yourself a costly disservice. 

There are always trade off's. With retail, there's much more involved from a selling stand point.  Whether retail or ins work, the "in between", scheduling and getting the work done is much the same. In a storm situation, very little selling but more work on getting the claim properly paid. 

Since there is so much work to be done (and so much legitimate money to be made) contingency agreements are the only logical approach. Contractors who misrepresent contingency agreements as authorizations to do the work are committing a type of fraud and such practices are frowned upon by all legitimate retail and storm damage contractors. 

So, the retail market is slow as molassess, HO's expect contractors to give away their retail work and some are more than willing to do so - to their own detriment. All of a sudden, a storm comes through an area providing many millions in additional recession proof work. Is the retail guy whose perception of the storm damage contracting process is completely wrong going to sit by while other contractors (local and out of state) who have invested their time and money into learning the process make a small fortune? In many cases, yes. 

P&C insurance companies promise their clients to pay for damage. Their premiums are based on top pro contractor remodel rates which factor in code upgrades and Overhead and profit. Then damage occurs, they try and pay at prices lower than their projected costs upon which the premiums are calculated. A contractor who knows his/her "stuff" will see to it that the ins co pays at the higher rates.

If the repair costs done by a pro would be $30,000, that is what the ins co needs to pay per their promise to their insured's. If insured has been dealt with fairly and honestly, the work was done right and per code using quality materials and workmanship and the profit to the contractor is 40% to 55% of the job (with O&P paid properly), such "high" profits are not sleazy, such profits are deserved - whether earned buy a local or out of state contractor.

Only 20% of contractors will invest their time and money into learning how the process really works and they will become the most successful. It will also help them with their retail contracting. The other 80% will just complain. My market is the 20% who understand ROI and are willing to do what it takes to learn the process instead of complaining about the "less than" who are usually out of business within five years - retail or storm damage.

Sour grapes puts zero money in anyones pocket. Learning the process does!


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## smalpierre (Jan 19, 2011)

BamBamm5144 said:


> WTF?
> 
> There is no way to be legitimate at $225 a square. 50 square and you're materials are 4k?! What are you putting on? My shingles alone are $88 a square. Last 50 sq roof I did my materials were 6200. Dumpster $500. Labor $2900.


Like this: I pay 72 / sq for GAF timberlines, and about 64 for 3 tabs. My crew installs for 50 / sq and hauls off trash in a dump trailer. They are legal, and have their own workers comp so I don't have to pay rates based on what payroll is - they have their own.

Lets work that out since we're calling me a liar ... 72 / sq + 5 / sq for felt ... 3 boxes of nails at $22, and a box of felt caps at 30. That puts me at $3946 for a 50 sq roof. So I wasn't right on the nose, but pretty fking close.

Now, I add in hip / ridge and starters before I calc the total price - so when I pay $19 for a 120 lf bundle of starters, and 22 / bundle for hip / ridge it only saves me money because I added up the squares for EVERYTHING before I bid the roof.

Also, I've never paid 500 for a dumpster. 300 gets me a 20 yard dumpster with no weight overages (ebox) - not that I've used them in a while since the crew has a dump trailer ...

You live in a different area than I do - our costs are different. It's why straight pricing questions are silly. Oh, and our licensing here is relatively inexpensive. It cost about 2500 / year for me.

EDIT: And I'm not using ice / water for anything but critical areas either - we don't have ice dams around here. Even so, it wouldn't add THAT much to my costs - by the time I pay less for starter and H/R I could almost ice / water the valleys for no extra charge ... Pipe boots are cheap, and we only replace flashing thats fubar.

Insurance company doesn't pay for it - we don't do it.
Customer doesn't want to pay for upgrade - we don't do it.

Now I DO tell the customers that we can put on a roof that will last longer, and I will upgrade their warranty to 10 years (from 7) if they do ... but they hardly ever go for it.


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## smalpierre (Jan 19, 2011)

larryb said:


> "Profited from the storm?" Profit is a good thing...when earned honestly. What/where is the ins fraud?
> 
> While paying deductibles may not be construed as ins fraud, it is a practice that I and all reputable contractors disagree with. Because so many local and out of state contractors offer to bury deductibles, either directly or though phoney "sign discounts", thereby sleazing up the market, many states have passed laws prohibiting the practice. While I don't like more laws, no "deductible buying" is good legislation because it levels the playing field. I never paid a customers deductible and if they demanded it, I'd walk away knowing that, in a storm situation, there was always a few hundred other potential customers to talk to.


If I'm willing to do the job for a grand less than you - how is that sleazing up the market? What if the insurance company paid out 11,500 for a roof that I would have normally bid at 10,500, and I make them pay the deductible - is that price gouging?

If you're going that route, you might as well have the government price-fix everything. If you charge less than the competition it's sleazy - if you charge more it's gouging ... so just let the government step in and tell us what everything cost - THAT will fix the economy REAL good!

And I'm not saying the contractors you're talking about aren't sleazy ... they probably are.


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