The Deductible Dilemma and other Insurance Horrors – Part 2

By Thea Dudley.

Where does the law leave a roofing company trying to compete within what is fast becoming the new norm? 

There are more than those two grim choices we discussed in Part 1 of upholding the law and losing jobs because homeowners don’t have the cash or losing jobs to other unscrupulous contractors.  Take a proactive approach by educating yourself and your company on tools and options that you can offer your customers.  Once you have those in place you can roll them out to your customers taking the pain away before it sets in.

The average homeowner is not aware that a “create, rebate, gift card, etc.” falls under fraud.  Educate your customers on the law-keeping them, and you, legal by offering them solutions that allow you to keep the business, add to your credibility and that gives you a leg up on others who might not be so honest or knowledgeable as you.    

Here a few things to help your roofing business build that bench strength to set you apart AND stay legal:

Include a reference to the law in your state on your credit application, contract or proposal.  This puts the information on the table and opens the door to the conversation about how to LEGALLY solve it.  HB2102 requires this to be part of the contract and is specific right down the size of the font. 

Once the deductible conversation is started you can move into solution offerings:

1. Traditional Bank financing - Homeowner goes to their bank and applies for a personal or small home improvement loan.  Your homeowner often can work with their bank to make this happen fairly quickly with good credit.  Pro:  The money is there with no work on the contractors’ part.  Con: The customer has loan paperwork and credit check to pass. 

2. Have a few consumer finance options for your homeowner -  Greensky Financial, On-Deck, Lendkey Technologies and Financeit all offer various options that you can either steer your customer to independently online or as an offering of your company (get yourself set up with one of these companies in advance).   The process is the same as a bank with some variance in costs and interest.  Pro:  Once you pass the customer on the discussion is between the financing company and the customer.  Con:  Customer needs to complete the loan paperwork and pass a credit check; rates may be higher for customers with credit challenges. 

3.  Offer a payment processing service.  This is a newer offering in the finance arena for our industry.  On a very basic level, it works like a credit card processing service.  FMD- FundMyDeductible is one and the only one catering to our industry.  For a small fee, the company collects a monthly payment from the customer of the roofing, insulation or other trade and then passes it to the contractor taking the pressure off the contractor to collect and giving the homeowner a vehicle to pay monthly and provide proof to the insurance agency.  Pro: No loan paperwork, no credit check, creates a revenue stream from monthly payments to the roofing company, not managed by the roofer.  Con:  No credit check.

4. Revisiting the insurance policy.  Although not helpful at the time of getting a new roof, the homeowner can go back to their insurance company and inquire about other options to help reduce the out of pocket in the future.  An increased premium rate for a lesser out-of-pocket deductible is one option.  They can also inquire if their insurer offers deductible insurance.  A separate policy that covers the deductible.  Pro:  Less or possibly no out of pocket.  Con:  More insurance and insurance premiums. 

Loan size is the greatest challenge for the homeowner in this situation.  It may not be economically feasible (or worth the effort) to get a loan for a few thousand dollars, making the payment funding option really attractive. 

If the name of the game is customer service set yourself apart from the pack finding practical solutions to offer your customer (outside of finding a generous relative or rolling the dice on an accounting sleight of hand hoping it stays under the radar) is a great way to do it. 

No one is excited about having more laws to have to incorporate into our businesses, but the laws are here and appear that they will keep coming and be enforced so finding a solution is imperative.  To quote Teddy Roosevelt “Complaining about a problem without posing a solution is called whining.”  Stop whining, start solving. 

For those of you wondering, I did move into that house, for a greatly reduced price to cover the cost of the new roof!

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Thea Dudley is an expert credit and collections officer, having spent 30 years in the construction field working for contractors and distributors. See her full bio here.