Legal Considerations When Buying a New Roof in Georgia
Here is a tale of two roofing stories.
Academy Roofing recently experienced first hand how homeowners are not in good hands with Allstate. Especially since the recent hail and wind damage storm.
Story # 1
The first story begins with an elderly lady who called our company because one of her neighbors recommended Academy Roofing. The homeowner knew that her roof was getting up there in age and wanted an estimate to replace the roof.
As usual, we checked out everything and began measuring when we noticed immediately that roof had severe hail damage. Not the kind of hail damage that one has to squint to make out but this is the kind of training material to give as examples of hail damage to shingles. This is the kind of damage to shingles that you find when one simply does a google search.
How insurance companies underpay on roof claims.
Insurance companies use a program to estimate damages to your property called Xactimate. This program is owned by Verisk Analytics whose parent companies include Travelers, AIG, & The Hartford. In other words, the insurance companies own the software program for which their adjusters write estimates for claims. While there could be many conflicts of interests involved here, we are going to focus on a big one that affects the roofing industry.
Xactimate’s default for removal of any trade is under the category code Demolition (DMO). Demolition requires the utilization of a separate crew of non-specialized laborers for removal. Non-specialized laborers would be considered day laborers who are uninsured. Xactimate assumes roofing companies use two different crews throughout the process. This is an incorrect assumption.
Roofing companies do not use two separate crews when replacing the roof. They do not use uninsured day laborers to remove the existing roof and then another skilled labor insured crew to install the new materials. It is the law to have workers compensation. The same insured skilled labor crew is used for both the removal and installation. Xactimate list skilled insured labor as (RFG) as a trade.
So, why does Xactimate default to demolition day laborers (DMO) when insurance companies know the truth? The answer is simple. Money.
Here is a screenshot of the line item for 3 tab 25-year shingles where they have it defaulted to DMO. The unit price for removal using their default day laborers is $44.73.
When the removal trade is changed from DMO to RFG the price increases significantly to account for using skilled labor with general liability and worker’s compensation. Here is what that looks like. The unit price for removal changes from $44.73 to $108.36. That is a difference of $63.63 on this one line item.
To put this into perspective, if you have a 4,000 square foot roof that needs to be removed, by the default being DMO it saves the insurance $2,545.20 on this one line item. This is just one line item where it defaults to DMO. On the average claim, there are five to six line items where it defaults to DMO.
What did Academy Roofing’s Insurance Agent say?
Academy Roofing has discussed this issue at great length with our insurance agent and there are a couple issues that they have stated.
“Concerning General Liability: Most policies for a general contractor do NOT provide coverage for any sub-contractor that does not have workers comp and general liability insurance. It’s a requirement of the general liability contract for any and all sub-contractors to carry coverage.
Concerning Workers Comp: Workers comp auditors count as roofing any person as a roofer if they are on a roof at any time during their occupational duties. You cannot count them a demolition because of the height issue, which you cannot avoid or ignore. Furthermore, by trying to get a contractor to classify roofing as demolition is tantamount to FRAUD because this contractor will have to LIE to an auditor to have this work rated as demolition instead of roofing. The rate for Roofing is 103.74 compared to 29.41 for debris removal. This is sticking a contractor with an additional charge of $74.33 for every $100 they pay to these laborers.”
What is the solution?
Have your contractor submit a supplement to the insurance company requesting they change the default DMO to RFG along with a letter from their insurance agent.
This might take multiple attempts talking to your insurance adjuster or their superior as many adjusters aren’t aware of the conflict of Xactimate defaulting to DMO does to the claim. However, be resilient and don’t let up. Hopefully, in time, they will correct this error within Xactimate and stop defaulting to demolition day laborers.
I’m sure you’ve had a few knocks on your door if you have a Chalet shingle on your roof. Here’s why roofing contractors are targeting Atlas Chalet shingles for replacement or repairs around Atlanta.
In 2010, Atlas Roofing Corporation announced their Chalet line of shingles would be discontinued.
• The Atlas Chalet shingle had a 30-year Limited Warranty when it was being produced.
• This would now equate to a limited lifetime warranty for a similar shingle today.
The Chalet shingle had been a very successful shingle product for many years. The design of the Chalet was to mirror that of an architectural shingle except it was a three tab shingle. The shingle’s granules were distributed to give the shingle a raised area which made it appear dimensional. However, the long-term durability of the shingle proved to be a major issue.
Many Chalet roofs had severe cracking, blistering, and early granule loss. Cracks can be seen on this Chalet shingle picture.
What do I do if I have an Atlas Chalet shingle on my roof?
Bad News – The Chalet can’t be purchased so if you need a repair done, it cannot be matched.
Good News – If you need a repair as a result of storm damage, your homeowner’s insurance would pay for a complete replacement as they recognize these shingles are discontinued. Unless you have Allstate as they state that a Chalet roof can be repaired. This is, of course, illogical as the Chalet is discontinued, defective, unavailable, and a different size shingle than any comparable shingle today.
Any attempt of repairing the shingles would do more damage and cause the roof to look like a checkerboard. No reputable contractor would warrant such a repair.
See Consumer Reports ranking of homeowner’s insurance companies.
