After every disaster, contractors are there to help pick up the pieces in their communities. According to the National Oceanic and Atmospheric Administration, the frequency and costliness of natural disasters are increasing in the United States.¹ Since 1980, there have been 285 natural disasters that have caused more than $1B in damages. As these disasters impact the United States more often, it is important to understand how to work with insurance companies and homeowners to make sure your business is positioned to help when the time comes. Here are things to consider before disaster strikes your community.
Working directly with the insurance companies
Insurance companies create lists of preferred vendors for specific trades to share with homeowners after a disaster. Getting on these lists requires an application process, appropriate licensing, and certification requirements. It’s a lot of work, but the direct benefit is having access to a large referral network, in times of crisis. Once you’re included on these lists, you are now at the front of the line for jobs related to a recent natural disaster. Things you will likely need include:
- Certificate of incorporation
- Business license and/or permit
- Require certifications to become a preferred vendor
- Insurance coverage policies
- State Employer Identification Number (EIN)
- Federal Tax Identification Number (TIN)
- Signed agreements and contracts
Make sure you have strong processes in place to move the job along quickly. Hearth memberships include digital contracts and payments to close deals and get paid fast.
Using financing to cover deductibles
As you have probably seen, some companies will offer to partially or entirely cover deductibles for insurance jobs. Some states have begun to crack down on this tactic because it can be misleading for customers. In order to stay on the right side of the law, be honest about your customer’s responsibility for their deductible. Offering them a financing option for their deductible can improve your chances of closing the deal and getting the job started.
Start offering financing for your home improvement jobs today!
Here are the five things you need to provide a homeowner so they can get an insurance company to cover their project:
- A detailed estimate that includes parts and labor
- A job completion schedule
- Your license number and business insurance policy information including your coverage
- Years in business and how many jobs you’ve completed recently
- Any parts and labor guarantees you can offer
Insurance companies will work with you directly on payment after finishing the project.
Competing against storm chasers
Out-of-state contractors and scammers will flock to areas recently hit by natural disasters. Even if some of the out-of-state contractors have good intentions, it’s your job to make sure you close as many deals in your area as possible for the sake of your company and community.
Homeowners and insurance companies are looking for trustworthy and verified contractors to work with. No one wants to deal with a botched restoration job. Use your longevity, work guarantees, state licensing and permits, and local presence as a tool to beat out your competition. Show homeowners you can take care of their property long-term and you’ll stand by your work.
You may also have to compete with storm chaser contractors for crews to install your jobs. This is extremely common, but what you can offer your crews and homeowners are consistency and longevity.
Protect your business and review your coverage
Business insurance is a necessity, but it may not cover everything you need. Take stock of what you need to run your business effectively during a disaster, and make sure your insurance coverage meets those needs. You don’t want to find out too late if your coverage isn’t enough.
Before a natural disaster hits, you also need to protect your business from natural disasters. Avoid trying to pick up the pieces of your own business operations while your community needs your services. Here are some tips on how to protect your business.
Keep your business’ vital records and documents safe by digitizing and going paperless. A floor or storm can’t destroy your files if they’re saved to the cloud. Staying paperless is an easy way to protect the future of your business.
Set a clear plan regarding who does what when disaster looms. Where will you store your equipment and vehicles? Who will check on your employees and crews after the storm? Who will let your customers know that you’re in business once the cleanup begins?
The Small Business Administration has free resources for you to build your plan.
¹ NOAA, 2020 U.S. billion-dollar weather and climate disasters in historical context, Jan. 2021