Finding new customers is always a challenge in any business. For construction contractors, one way to get work is to partner with insurance companies. When a homeowner has damage to their property and makes a claim, the insurance company pays for repairs. Someone will have to receive the money from the insurance company and actually do the repairs. That could be you! But to get work from insurance companies, you will need to know how construction contractors get insurance repair work.
How General Contractors Work With Insurance Companies
There are two main ways that you can begin to work with insurance companies. You can go through the insurance company, or you can go through the homeowners.
One way to begin working with insurance companies is to go to the companies directly. But to do that, you will need to have at least some experience with disaster mitigation work. An insurance company wants to know that you have the knowledge and experience to smoothly handle an insurance claim. For that reason, it makes sense to start with homeowners until you build your portfolio.
How Contractors Land Work with Homeowners
When a homeowner has been through some kind of a disaster, they will need a disaster mitigation contractor to repair the damage. But this is likely one of the most stressful moments of their lives. When your home is damaged it puts both your family and your largest investment in danger.
Often homeowners are dealing with the immediate effects of the disaster: finding temporary alternate housing, salvaging belongings, trying to care for their families. So the most important thing a contractor can do is avoid adding stress. In fact, the contractor who gets the job is going to be the contractor that relieves stress.
Part of the stress of rebuilding after a disaster damages your home is working with the insurance company. If a contractor can take care of that, they will be much more attractive to the homeowner.
Working With an Adjuster
The first thing an insurance company will do when it receives a claim is send out an adjuster. The adjuster will inspect the damage and determine the level of coverage and the dollar amount of the claim. This can be an incredibly stressful event for a homeowner, especially if they find out they are not as covered as they thought they were. So the best thing a contractor can do is to meet the adjuster and advocate for the homeowner.
An adjuster is hired by the insurance company, so they are biased towards finding less damage and making a smaller payout. This doesn’t mean the adjusters are the enemy of the homeowner, but it is a bias worth recognizing. Most adjusters use software to determine the amount of coverage. They tally up the damage and make a list of required materials for the repairs. Then they estimate the labor involved and calculate it out at average local rates. Finally, they add 10 percent for overhead and 10 percent for contractor profits.
This leaves a pretty narrow margin for the contractor, especially if any of the estimations come in lower than the actual cost. As a contractor, you can accompany the adjuster around the damage site on behalf of the homeowner. Be kind, but thorough. An adjuster has a job to do and beating up on them won’t get you any more money. Make sure that you are clear on what damage is covered and what the scope of repairs will be. If you see something that the adjuster doesn’t, let them know that it will be included in your estimate. It’s better to keep your adjuster as informed as possible before they make their final calculation.
Negotiating With the Adjuster
Once the adjuster has inspected the damage and prepared their standardized estimate, the negotiating can begin. You will be negotiating for scope and price. If you want the adjuster to consider your estimate, you will have to be able to justify it. Simply putting together some numbers on a legal pad will not do the trick. You will need a professionally presented, itemized estimate that realistically documents how you got to your estimate.
Your best tool for dealing with the adjuster is good estimating software. With a quality construction management program you can quickly build a professional looking estimate. Even more importantly, you will be able to make adjustments to your estimate quickly and easily. As you negotiate with the adjuster, you will find that you need to make multiple adjustments before you come to an agreed upon price.
Keep in mind that the difference between your final invoice and the adjuster’s estimate will have to be covered by the homeowner. If you plan on getting good reviews and referrals, it pays to try to keep that difference as close to zero as possible.
Courting the Insurance Agent
Once you have negotiated a price with the adjuster and started the work, you can go after the real prize. The insurance agent is the one who holds the keys to the kingdom. Many insurance agents have a list of preferred vendors whom they recommend to their clients. This is one way the agents try to offer something that cheaper internet-only companies don’t. So how do you get on that list?
The first thing to realize is the “list” is usually not any kind of formal agreement. Insurance agents receive solicitations from all kinds of restoration companies, auto glass, and auto repair companies all day long. In order to fend off the onslaught of sales reps, they have an easy canned answer: “I can’t refer you because you are not on my approved vendors list.” In fact, most sales reps never even get to the agent. They get the “vendors list” line from an office manager or secretary and are sent on their way.
Keep the Insurance Agent Happy
Once you are working on a job, you have a line of communication with the insurance agent. This isn’t a time to ask to join the list, but it is a time to impress. Insurance agents want to work with vendors they can trust. So make sure you are trustworthy. Keep the agent up to speed with how the job is going. If the customer is satisfied with how the work is progressing, convey that to the agent. Agents are busy, but they like to know when a client is happy.
To put the icing on the cake, there’s nothing like a bouquet of flowers. When the job is completed and the homeowner is satisfied, send them a bouquet of flowers, but don’t put your name on it. Instead, put the name of the agent. Let the agent know that you are doing this and tell them it is a thank you for the opportunity to work together. When the client calls to thank them you will have one very happy agent.
Construction Management Software Makes You More Trustworthy
Insurance agents want to refer vendors to their clients that they can trust. The last thing an agent wants is for one of their referrals to go bad. One way to make sure you are trustworthy is to present yourself as professionally as possible. With construction management software like the suite from Needo, you can be professional and efficient from start to finish. It’s easy to keep the customer and the agent informed of the status of the job. And when you’re done and ready to submit an invoice, you will be prepared with a professional, sleek invoice that can be broken down as finely as your customer or the insurance agent wants.
If you are ready to go after the insurance market, don’t hesitate to reach out to Needo. We’ll have you all set to take on this great source of income for any construction contractor.