Simplifying roofing code research
With savings in loss costs and loss adjustment expenses combined, the homeowners insurance industry could save over $1 billion annually while simultaneously helping their adjusters and contractor partners avoid frustration, save time, get clear answers and save out on recurrent overpayments due to systematic errors in code identification and managed services implementation.
Identification & Automation
Time is Money
Data is Key
Roofs are Expensive
By digitizing the following key data for 28,547 municipalities in the United States, OneClick Code is pioneering automated roofing code identification and permitting processes:
- Roofing codes
- Municipal jurisdiction authority
- Material tax
- Manufacturer specifications
The resultant data set eliminates millions of hours spent by adjusters and contractors required in the claims process by putting the information where it belongs: at the user’s fingertips.
Claims departments responsible for settling roofing claims can enjoy enormous potential loss adjustment expense reductions and loss cost savings through quickly considering a very simple set of questions:
- How many roof claims do we settle on average each year?
- What percentage of those claims require roofing code research
and review of contractor estimates?
- What is the average time required by an adjuster to research roofing codes and review contractor estimates?
- What is our average adjuster hourly pay rate?
The process to research the roofing codes and review contractor estimates is more involved than it may seem, including but not limited to the following steps:
- Reviewing supplement
- Identifying jurisdiction
- Searching for roofing codes
- Finding the municipality phone number
- Recording these actions in a claims log
- Adding line items specific to code
- Calling the contractor to discuss approved items
- Reviewing and processing payment
- Downloading and uploading related information
Altogether this typically requires just shy of 120 minutes (two hours) of the adjuster’s time. Moreover if there is a supplemental request by the contractor and it is denied in full or in part it may be requested again. Such an additional request can add anywhere from 30 to 60 minutes to the process each time an adjuster reopens a claim to review a supplemental request and it is not uncommon for this process to repeat three or four more times after the initial request. Associated labor costs aside, there is no real measure for the amount of frustration experienced by the adjuster or contractor in such a process. To fully appreciate that frustration, we recommend trying to work tomorrow without your mobile phone or computer.
Using a data driven solution instead, this entire initial process takes less than five minutes and any resubmission less than one minute resulting in hours of savings each time. It also eliminates or greatly reduces the frustration experienced by the adjuster and contractor during the initial submission and any subsequent reopening by the adjuster. Most importantly, a data driven approach provides defensibility for the position taken, eliminating ambiguity and underpinning acceptance by all stakeholders. Such clarity increases the fidelity of the indemnity process and by definition reduces the possibility of fraud.
Data sourcing processes should be designed around three key values/principals:
Related to settling roofing claims
Straightforward answers to the most commonly asked and important questions (such as whether a local code requires a roof to include drip edge, valley liner, or iced water shield in eaves)
Updated consistently to ensure accuracy
OneClick Code targets municipalities based on what the Census Bureau calls CBSA’s (Core Based Statistical Areas). A CBSA is a U.S. geographic area defined by the Office of Management and Budget (OMB) that consists of one or more counties (or equivalents) anchored by an urban center of at least 10,000 people, plus adjacent counties that are socioeconomically tied to the urban center by commuting. 95% of the US population lives within 919 CBSA’s which encompasses 1,811 Counties. Within those counties are a further 28,547 local municipalities. Of the 28,547 municipalities, 12,593 issue their own permits. The remaining municipalities require permits, however they submit to the Jurisdictional Authority of an adjacent Municipality or County to obtain those permits. Additionally, municipalities may choose to outsource permit processing to third-party private companies. OneClick Code has developed a patented process for enabling the geolocation of an address in its geographically defined Jurisdiction of Authority in order to ensure data accuracy.
OneClick Code personnel contact each of the 12,593 permit issuing municipalities on an annual basis or semi-annual basis to collect and verify roofing code and sales tax data for digitization involving at least 3,000 different types of documents. Anytime there is a major storm (hurricane, severe storm, etc.), OneClick Code calls the local municipalities within 72 hours to ensure codes are updated for the ensuing claims process.
When working to find the correct sales tax estimation, it is important to know that there are often multiple rates per zip code, county, and/or city. Determining tax rates based solely on zip codes will result in inaccuracies. To ensure accuracy, it is necessary to pull the sales tax information based on an address’ geolocated latitude and longitude, and not simply the zip code or the city which can lead to incorrect input rates and a possible notice from the local tax collector.
At the core of OneClick’s patent pending building code solution is determining the correct municipal jurisdiction, i.e. given a US postal address, what local government has legal authority over that property. There are more than 40,000 individual jurisdictions within the US, each with a varying degree of legal authority. Determining which jurisdiction has authority for a particular address involves a two-step approach.
- The first step being to geocode a particular address, where a precise latitude and longitude is assigned. Jurisdictional boundaries are represented as shapes on a map. Provided a latitude and longitude coordinate, the jurisdiction(s), or shape(s), that contain(s) the coordinate can be assessed.
- The second step is to determine which jurisdiction that contains the property has legal authority to adopt and enforce building codes. This is a manual process consisting of various levels of communication with each jurisdiction throughout the country while taking into consideration the various nuances each state or municipality might have. This communication entails deciphering if each jurisdiction adopts and enforces building codes or if another jurisdiction has the authority to do so.
- For example, does a particular city enforce building codes within its city limits or does the county that houses the city enforce the codes?
- Additionally, situations may arise where a municipality’s building code does not require something yet the code also states a manufacturer’s specifications take precedence. In cases like this OneClick provides the ability to select a specific manufacturer and product line in order to determine the final requirements.
As we continue to collect building codes throughout the US accuracy and data integrity remain our top priorities. Given the unique nature of the data OneClick collects, software was developed in-house in order to effectively and efficiently gather this information. This bespoke application helps to prevent basic errors as well as providing verification for certain contact data points. In addition, when collected data is flagged as potentially erroneous, it enters into a review process where a senior building code analyst confirms the information before publication.
- OneClick Code has gathered and maintains the only database containing this information. Each municipality is contacted at least once per year to gather or confirm pertinent contact and building code information.
- Severe storms are also tracked by OneClick Code and any municipality that is affected by a storm is contacted within 72 hours of the storm to verify any and all contact and code information.
- Defensibility is key to OneClick’s success such that during the data collection process OneClick attempts to gather verifiable evidence from each municipality backing up certain code items, in particular the requirement of an ice barrier.
In the last two decades, the combination of the rapid rise in severe convective storm (SCS) frequency and severity and skyrocketing roofing costs have created a toxic environment that is punishing homeowners and property insurers’ alike.
- Between 2001 and 2017, there was a 7.5 percent per annum rise in claim severity and 3.3 percent per annum rise in frequency that combined to produce a growth of total loss, or SCS claims inflation, of 11 percent.
- Sales among privately held roofing contractors increased 13.5 percent and 15 percent in 2017 and 2016, respectively while the average profit margin for roofing contractors grew 4 percent annually from May 2014 to May 2018.
Incredibly in 2022, no one in the roofing value chain can confidently answer how much it should precisely cost to replace a roof. Below we highlight a hypothetical example of where an incorrect set of roof data inputs can swing the claim payout by 21%. Perhaps most astonishing in this example is the fact that the payment could be wrong in either direction, i.e. the insurer may end up paying too much or too little based on the data as depicted.
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