Last week, we began a three-part series on the Storm Damage Repair Process. This week, we continue that series, looking at what to do when the storm hits and after it passes. All of this advice is intended to help get your office prepared for SDR jobs, so that you can close the highest number of jobs with the lowest amount of stress.
Let’s start with something very fundamental…
Get It In Writing
Always start with the contract. Like any other job your company does, there should be some form of written agreement. This could be a full-blown contract for a retail job, a one-page capture sheet for SDR or a Memorandum of Understanding. The bottom line is, have SOMETHING. This is for your protection as well as the customer: you know you have an agreement, the customer knows the price or scope.
Next, make sure your office puts a second set of eyes on each contract. We use a “Capture Sheet,” a one-page document that our sales reps fill out which clearly explains what they sold, what part of the Scope of Loss we are doing (and not doing), how much we charged and what we promised. It’s a simple and easy-to-translate document that we can pass on to the production team
Then, track invoices and payments efficiently. I generate the invoice, payment and the budget at the same time in my administrative process. My sales reps submit the job in JobNimbus (our CRM), and then the administrative team reviews it. Once it’s marked as “Approved,” it shows up in the production team’s Dashboard and the administrative staff create and record everything about that job in the CRM. This allows us to maintain clear records that are up to date.
Closing Out The Job
First, let’s define what closing a job out in SDR means. Like we mentioned previously, insurance companies break up the total contract price into sections. Usually they give the customer the Actual Cash Value (or ACV amount), which represents the actual value of the product on their home. (Damaged shingles and siding still have some value). The remainder that the insurance company holds back is called Depreciation. Depreciation is the value of the new work and is usually held by the insurance company until they receive a Certificate of Completion or some form of verification that the work was actually done.
For the most part, you are contracting with a homeowner to do the work for the Replacement Cost Value, or RCV. The RCV is the sum of the ACV, the Depreciation and the deductible. So, in order to be paid in full for your work, you will usually need to get that final payment released to the client so that they can use it to pay you!
Once you have the intake setup, you now have a budget so that you can do job costing (which you have hopefully been updating along the way). You also have an accurate invoice that details the work completed, any credits or change orders issued during the production stage, and a record of payments the customer has made. You can literally close a job in 5 minutes from this point.
The first step for job closeout in SDR is generating the Certificate of Completion, or COC. The COC is a form or verification in which the homeowner or client acknowledges that the work was done according to the Scope of Loss document and that the claim is completed. The insurance companies will have different requirements for what must be included with this document. However, at a minimum, it’s typically going to include the customer’s contact information, claim information, their signature and an invoice.
From there, you need to figure out where to send the COC. In the insurance Scope of Loss, there are usually instructions on how to release depreciation and close the claim. It may be an email, sometimes it’s snail mail, or it may need to be completed using an online portal. Either way, the insurance company needs some documentation to close out the job and release any remaining funds.
Now comes the unpleasant part: you need to wait, and you need to have some means of following up on open invoices. Most insurance companies take 30 to 45 days to release depreciation so I set my reminders for open invoices at 45 days, 60 days and 90 days. This is the time period where the cash flow – or the lack thereof – from insurance companies can be a killer on your finances.
It’s important to remember that you need to stay on top of the client. SDR jobs are strange because the client, in many cases, doesn’t feel that THEY owe you money. They feel like their INSURANCE COMPANY owes you money. Once the work on their home is completed, they sometimes perceive their obligation to you to be over. It’s important to stay on top of them to keep pressure on their insurance company so that you can collect that final payment.
A few other things you will likely encounter. Sometimes, insurance companies will write the checks to the homeowner and their mortgage company. It takes time to get these checks endorsed because they need to be mailed to the mortgage company, endorsed and mailed back to the homeowner who can then give it to you. You may also need to submit licenses, W9s, insurance certificates and other documentation, so if this comes up, it’s legit and sometimes necessary.
Be patient, be tenacious and make sure your processes are in place, and you’ll find that you and your company are ready for SDR jobs when the storm comes!