The Financial Impact of Roofing Supplements on Contractors
As a roofing contractor, you're not only a skilled tradesperson but also the CEO of your business. Ensuring profitability and scaling your company requires careful attention to revenue streams and operational efficiency. One key area people often overlook is roofing insurance supplements, which can significantly boost your business's financial performance.
Original insurance estimates rarely cover the full scope of work needed on a roofing project. That's where roofing insurance supplements come in. But are they worth the time and investment? Should you handle them in-house or outsource them to a specialized supplement service? In this article, we’ll discuss the financial impact of roofing supplements on contractors, providing insights into supplement service costs, ROI, and long-term benefits for your business.
Key Financial Benefits of Roofing Supplements
Higher Insurance Payouts
At the most basic level, roofing supplements ensure you’re compensated fairly for the full scope of work. Insurance adjusters are not roofing nor code experts, and it’s common for initial estimates to miss important details, leaving contractors with underfunded projects.
Are roofing supplements worth it?
Absolutely, if you want to avoid absorbing additional costs yourself.
By submitting supplements with thorough documentation, contractors can recoup the full value of labor, materials, and even code upgrades, boosting their bottom line.
Improved Cash Flow
Cash flow is critical for roofing contractors. Timely, predictable payments enable you to purchase materials, pay staff, and manage day-to-day expenses without financial strain. Supplements help ensure that payments are received in full and on time. When a supplement process is standardized and efficient, it eliminates unnecessary delays in receiving payments, resulting in smoother cash flow.
For contractors, better cash flow means you can take on more projects and invest in growth without worrying about payment bottlenecks.
More Accurate Estimates with Xactimate
Both contractors and insurance adjusters now use sophisticated estimating tools like Xactimate to create accurate and standardized claims. A well-structured supplement ensures that no critical detail is overlooked, encouraging a more thorough review of your work before you begin. This not only increases your chances of securing higher payouts but also positions your business as professional and reliable in the eyes of insurance companies.
Outsourcing to insurance supplementing companies who specialize in Xactimate supplements can further streamline the process, as they are often more proficient in using the software, ensuring accuracy and completeness in every submission.
Maximize the Financial Impact of Supplements
While supplements can bring in more revenue, their true value is realized when they are optimized for maximum financial impact. By treating your supplement process like any other core business function, you can ensure that it contributes not only to your short-term cash flow but also to long-term profitability and scalability.
Streamline Your Supplement Process
Efficiently managing supplements can turn them into a reliable, predictable source of revenue. For those handling supplements in-house, streamlining the process is essential. Tips include:
Provide detailed, standardized estimates: Using a consistent format ensures your supplements are professional and easy to review.
Submit supplements early: Insurance companies are more likely to approve supplements submitted promptly, leading to faster claim approvals.
Implement a payment collection system: A robust system ensures you capture every dollar owed, reducing payment delays.
Alternatively, outsourcing can be the most efficient option for many contractors, allowing you to focus on running your business while ensuring supplements are handled by experts.
Supplement Service Costs: What to Expect
What is the cost of roofing supplement services?
Fees for outsourced supplement services vary widely. However, most insurance supplementing companies offer a few common pricing structures:
Flat-rate per job: A single fee for each supplement submission.
Monthly membership: A subscription model offering different levels of service depending on the number of supplements submitted.
Percentage-based: A percentage of the awarded supplement is taken as the fee, ensuring you only pay for successfully increased estimates.
Companies like OneScope offer percentage-based pricing with no upfront costs, meaning you only pay for the results, which is a low-risk way to enhance your revenue without overextending your budget.
Tracking the Financial Performance of Supplements
For a contractor acting as the CEO of their business, understanding the financial impact of supplements is crucial for scaling effectively. Tracking key metrics such as approval rates, revenue from supplements, and overall insurance supplement ROI will give you valuable insight into the performance of your supplement process.
Supplement Approval Rating
Tracking your supplement approval rating provides visibility into how well your supplements are performing. By maintaining a log of supplement submissions (including dates, claim numbers, and amounts), you can track approval trends. A strong approval rate indicates a well-managed supplement process, while a decline in approvals could signal areas for improvement.
Revenue from Supplements
Calculating the total revenue generated from supplements and comparing it to the initial insurance estimate amount can reveal gaps in initial estimates and opportunities for optimization. It’s also useful to track the percentage of your total revenue that comes from supplements. If you notice an uptick in supplement revenue after major storms or other events, this can help inform future business planning.
This image shows a small sample of some of the metrics we track for our clients. Note that this is for illustrative purposes only - totals and averages vary greatly by number of jobs, job size, and location.
Calculating ROI on Roofing Supplements
To fully understand whether roofing supplements are worth it, you must calculate the return on investment. Compare the revenue generated from supplements to the costs incurred, including:
Software costs (e.g., Xactimate)
Staff training
Time spent on supplement submissions
Outsourcing can often improve your ROI, as the service cost is usually offset by higher payouts and faster approvals. At OneScope, we provide performance metrics included in our service. So you’ll always know your revenue from supplements and your ROI.
Are Roofing Supplements Worth It for Long-Term Success?
In the long term, roofing supplements play an integral role in scaling your business. Initial insurance estimates often don’t account for overhead, profit margins, or complex work required to complete a project. A well-prepared supplement bridges this gap, ensuring contractors receive full compensation. The additional revenue generated from supplements can be reinvested into hiring, training, marketing, or expanding your services - critical elements for long-term business success.
Try OneScope
See how our supplementing services can impact your business's bottom line.
How OneScope Helps You Maximize ROI
At OneScope, we understand that every roofing business is unique. That’s why we offer percentage-based pricing, so you only pay if we perform, and customized packages for high volume contractors. With our expert team of Xactimate estimators, we handle your supplement process from start to finish, ensuring accuracy, timeliness, and maximized payouts.
Ready to see how supplementing can increase your revenue and scale your business? Contact us today for a consultation and start improving your supplement ROI.
