I don’t believe the problem here is covering the deductible. The problem is submitting an invoice to the insurance company, when the job is complete, for the full amount of the claim in order to have the recoverable depreciation paid. Technically speaking, if you offered to cover the deductible, you really aren’t charging the full claim amount but in fact, charging the claim amount minus the deductible.
The flip side is, I am unaware of any situations where the insurance company pushed back on this practice. I can only speculate that the insurance companies may be happy to simply pay the claim amount. There is the potential for the Homeowner to submit a bid higher than the amount listed on the insurance statement of loss which would consume $ from the insurance company in dealing with it and ultimately paying more dollars than was initially allocated.
I’m also speculating that many of the storm chasers and companies practicing the strategy of covering the deductible are utilizing cheap, illegal latino crews and cutting corners on as many items as possible in order to keep their costs down. They are generally working on a hit and run volume basis. This seems to be the case from what I’ve observed. Therefore, they aren’t putting a ton of effort into negotiating with the insurance company, submitting supplements, etc… So the insurance company satisfies the Homeowner, the Homeowner gets a new roof without paying their deductible, the insurance company turns a blind eye towards the practice and life goes on.
My final speculation is that if handled properly, this can probably be accomplished and even if the insurance company ever challenged the contractor for “rebating” the Homeowner, they’d have a difficult time making it stick in court.
It seems to me the real answer is to do a better job in the sales process in order that you don’t have to give $1000 away in order to get the job. I’m not sure how you pay a Salesman their commission and then take $1000 off the claim amount for a $10000 roof and still make out. Well, I guess if you’re paying an illegal crew $40 per square and using the cheapest materials possible, you probably can.
Should you sell this properly, one would hope many Homeowner’s could recognize where they are getting shorted and would also be concerned about paying US dollars into the pockets of illegal aliens, assume the risk of an injury to a worker without workman’s comp and even consider the ethics of what they are doing. However, with the economy being what it is and people hurting for money, that is often easier said than done.