North Texas leads the U.S. in hail damage, and roofing here remains largely unregulated, with contractors facing minimal barriers to entry and high failure rates. Established roofing companies are pushing for regulat ion to protect homeowners, but face opposi t ion f rom two main groups.
First , insurance companies use thi rd par ty est imat ing sof tware like Xact imate to set repai r pr ices based on local roofer databases. When indust ry bar r iers are added, costs increase. Licensing fees raise overhead, and fewer entrepreneurs enter the market , leading to higher pr ices. 96% of roofing companies fail in the first 5 years. Currently, the cycle is: hail hits, a company star ts, bids low to win jobs, delivers poor workmanship, fails to handle war ranty claims, and then folds. Fewer low-bidding companies would increase average pr ices, impact ing est imat ing tools and insurance payouts. Al though insurance companies aren't responsible for poor work, they utilize the low pr icing of inexperienced contractors to keep database averages down in order to minimize payouts. If pr ices rose by 5%, insurance companies would pay out hundreds of millions more on claims per year .
The second bar rieris the Hispanic labor lobby. Much of Texas roofing labor is undocumented. Industry regulation would increase scrutiny and require work visas, reducing the labor pool and raising costs for skilled workers. The lack of regulation creates over lapping issues. Homeowners must exercise due diligence in selecting contractors and resist opting for the cheapest bid in an industry with scarce regulations.
This past week, we went to the Roofing Contractors Association of Texas (RCAT) conference here in DFW. I t was apparent that the bat t le over legislature between roofing and insurance companies is still very much alive but it doesn’t seem like much is going to change in the near future. However , what might be the bigger story is that deductibles and premiums are going to continue to rise and what used to be an insurance dependent market will almost entirely flip to retail in the next 5-10 years. Insurance companies will either raise deductibles over what i t would cost for a new roof, or push homeowners to switch to AVC for the roofing portion of their policy. To learn more about the difference between RCV and ACV check out our article the but ton below or at the following url. https://www.arringtonroofing.com/blog/2023/september /insurance-claimsacv-rcv-depreciation-and-deduct/