How much does a roof replacement cost? It is the question we all want to ask, and keeps us up at night wondering what it should cost. Well I can give you the most cliché answer ever, it all depends. It might be cliché, but that is the honest answer. Let me break it down as much as possible so that you do not have any more sleepless nights.
As soon as mother nature decides to strike with hail, instantly the door knockers and flyers raid your neighborhood first thing. Trust me I do not like it any more than you do but it is how we make our living. Gaining trust of a customer in our industry is an exceedingly difficult sell. It is even harder than being a car salesman. Now the real question is what kind of insurance did you decide to go with on your $300,000.00 home? Is your deductible 1% or 2% (some even go as low as .5% but premiums are higher)? Let us say you chose the 2% route because you wanted the lower monthly premium, so your deductible is a whopping $6000.
Once this storm is over you have a few options. First you can do absolutely nothing at all because the more you think about it you decide you simply cannot afford your deductible. Guess what not only is it illegal to cover a deductible, we cannot afford to cover it as a company either. Second option is you can have a professional roofer access your damage. If you have a metal roof, I suggest going with option 2, especially if you have a what insurance calls a cosmetic exclusion (cosmetic exclusion will be explained in the “cosmetic exclusions blog”. If you have a cosmetic exclusion and the damage did not cause functional damage, then the claim will most likely be denied. Hard for you to understand? That is exactly why you have a professional look at it. I personally find an insurance company that does not require you to sign the cosmetic exclusion waiver. The truth is today the damage may not be functional but as rain sits in the pits it will over time cause rust which will cause leaks in the future. That is a proven fact. Lastly you can simply just call your insurance company and file a claim. The only problem is if you file a claim and there is not sufficient damage it could possibly hurt you. For example, if only one side of your roof received 8-10 hits of noticeable hail damage per square (a square is a 10ft x 10ft section) then they will only pay for that one side to get replaced or repaired. So, the answer is yes, you could have old and new on your roof. Do you really want that? Option two is always the safest option because honest and trustworthy roofers do not want to waste their time or yours.
By now you may be wondering how any of this has to do with how much your roof cost. I assure you it will all make sense in the end. Let us say you were the savvy shopper and chose option number 2. Your trust has been earned by a roofer to look and see if you need a roof replacement or just a roof repair. Most but not all roofers 1099 their sales team so we really are not out of pocket any money when our team knocks on your door and accesses your roof. We will call our salesperson Bridget. Bridget thoroughly looks over your roof and she finds the 8-10 hits per square throughout your entire roof. Is that good news or bad news? Depends on how bad you want a new roof. If this is the original roof odds are the builder used the most basic material possible, I promise you builders do not spend money on your roof like they should. Why is that important? When you agree to sign Bridget’s agreement to do your work, she will meet with the adjuster. Let me stress the importance of having your representative present during this inspection. If it is not the original cheap roof done by your builder, most adjusters try to get away with being cheap. They will for instance give you monies allocated for felt paper opposed to the synthetic felt your last roofer used. The cheap felt cost $.04 a sq foot and the synthetic felt is $.32 per sq ft. That is a significant difference considering this material is laid on every inch of your roof. The adjuster is hired by your insurance company so who’s best interest do you think he/she has? I will leave that up to you to decide. Bridget does her job, and the adjuster says yes, Mr. and Mrs. Jones you need a new roof. Guess what Bridget still has not been paid a dime by her roofing company. So far, we are at $0.
Now three major steps have been achieved. You have filed a claim (1) and your roof has been approved for replacement (2). I did mention earlier that Bridget had you sign her agreement that if the roof was replaced then you were agreeing to use her company (3). We have our sales team get an agreement signed before we do an adjustment. You may ask why? Well to be frank our team takes pride in being professionals and lots of times roofs do not get paid for if you do not have a professional roofer with the adjuster. The adjuster may say yes to a new roof, but they may also cut corners with the scope of work to be done. If you want our expertise you would then need to sign our agreement. What do you have to lose? The agreement is binding and assures you that the roof will be replaced as required by the approved scope of work. At this point most but not all roofing companies will pay a portion of Bridget’s commission to her. On average roof salespeople make approximately 12% of the today claim or 50-60% of the total profit. Remember a square is a 10ft by 10ft section (also 1 square equal 3 bundles of shingles) and you have 45 squares set for replacement. Now this is where the fun part begins. The adjuster will send you the approved scope of work meaning they are only paying for what is in this scope. It is ok to show this scope to Bridget for several reasons but most importantly the adjuster represents the insurance company and Bridget represents you as the home/business owner. Every insurance company uses a program called Xactimate, this is also used by every roofing company as well. It is simple, the formulas do not change. Now you have 50 squares but at what pitch? A pitch is how steep is the roof. Is the roof 1 story or 2 stories? What type of felt paper is currently on your roof? What class shingle do you currently have? Yes, these are just a few of about 50-line items that must be apples to apples. That is why it is important that Bridget makes sure that you are getting the same roof that is currently being replaced. Your insurance company is giving you $19,000 excluding tax for a full replacement cost. Man, that is a lot of money considering your hard-working salesperson really has not been paid much yet.
On average shingles cost $21 to $35 per bundle depending on where you get them and what style you are getting. The big box stores have the best price but are extremely limited on color options. Let us go with $30 a bundle. So we already know that you have 45 squares so just in shingles the cost is $4050 plus tax (this changes state to state so that’s also why it’s important for Bridget to see the adjustment because believe it or not this is not correct most of the time). We are going to use the good grade of synthetic felt so we need 7 of those at $80 each = $560. We also need 13 bundles of ridge cap shingles which cost $49 per 25 linear ft = $637. You have approximately 400 linear feet around the perimeter of the roof, so you need drip edge (which is code in most cities but often left off by the adjuster). Drip edge cost about $4.00 per ten feet, we will get 42 of these to be safe so that = $168. We also need 400 linear feet of start shingles which go along the perimeter of your roof edge. These are sold by the bundle which covers 105 linear ft so we will get 4 bundles at $34 per bundle = $136. You have miscellaneous vents on your roof. For numbers sake we will just say you need a total of 4 boots and 3 turbines replaced because the soft metal was damaged by hail. The total cost for these would be around $150. You also have 450 linear ft of gutters which will cost $4.00 per foot which equals = $1800. You are most likely by local code required to put ice and water shield down in your valley’s which cost around $100. You also need around $900 in flashing around your chimney, L-flashing, and step flashing. Although very generic, the total cost for materials = $8501.00 plus tax = $8947.30.
Now most roofing companies, like Resi-Comm Roofing, subcontract out the labor part of the work. Depending on the slope/pitch, the roofers make anywhere between $55 and $105 per square. If a roofer disposes of the old shingles, they will charge a higher rate. In our case let us say they do this, so we are going to pay them $85 per square for the replacement which = $3825. If your roofer subcontracts out the work, make sure that the roofers are insured. One of Resi Comms requirements is that all sub-contractors carry the state required Workers Comp Insurance as well as General Liability.
So now we can finally do the math. Your total claim = $19,000. Your insurance company will send you 2 checks most of the time. The first check is called the ACV check and the second check is the RCV or recoverable depreciation. These amounts vary on age of roof. I will keep it simple so your first check will be 80% and the second 20%. Take $19,500.00 - $6,000.00 (deductible)= $13,000.00 x 80% (ACV check) = $10,400. Once the roofer sends an invoice for exactly $19,000.00 plus the tax on the materials, the insurance company will send the remaining 20% or $2,600.
The original question was “how much does a roof cost?”. The answer is simple. $8,947.30 (materials) + $3,825.00 (roofers) = $12,772.30. Sounds like a big variance from how much you received right? Let us not forget about Resi-Comm’s expenses. Bridget makes the standard 12% after the companies 6% holdback which (office, insurance, and general company expenses) = $2143.20 + 50% of the deductible which is $3000.00 for a total of $5,143.20. This leaves Resi Comms cost at $5143.20 (basic sales commission) + $12,772.30 (labor and materials) = $17,915.50. Resi Comm makes 6% overhead or $1,140.00 + the difference of total cost minus claim which = $2,724.50. Now you see why we cannot cover the deductible and exactly how much it cost us to replace your 45 sq roofing system.
In a different blog I will cover the “ok get us (the insurance company) 3 bids“. For sake of my sanity I want to pretend you did not fall for that and choose Resi-Comm Roofing (Bridget’s company) to replace your roof. What you need to understand is what ever bid you take that is exactly what your roofer legally must send as it is final invoice. If you have had the roof adjusted and they are giving you $15,000.00 and the roofer is only charging you $12,000.00 then you will have to give the $3,000.00 back. This is how the ACV and RCV money comes into play which is why there are two checks. Clear as mud? Watch for our blog on “get us 3 bids”.
On a final note an easy way to help recover the $6,000.00 deductible is to check out our blog on “How can I recoup my deductible”. Check out all of our roofing articles or feel free to get a free roofing quote while you’re at it. If you ever have any questions, just contact us and we’ll be more than happy to help.