It might help to understand how the insurance company gets their numbers. They are generally a result of thousands of closed claims in the region that your claim is filed under. They are updated monthly. Sometimes they go up, sometimes they go down. During covid, costs outran the estimates in almost all cases. The price list is compiled from cheap roofers, expensive roofers, and everyone in between. Therefore, that estimate is a good guess on what that roof should really cost a roofer, including his profit margin.
I can say that a company like mine is going to be priced in the ball park of the insurance estimate. A mom and pop shop that runs a business out of their home is going to be a bit less. We have a staff with departments that handle warranties, billing, invoices, ordering, scheduling, legal, and on top of that we have a 5 year warranty on work and labor. All of that adds to the cost. A small roofer may have one or two people to do it all. Nothing wrong with that, its just a different of size and necessity.
You carrier isn't necessarily paying for 'upgrades'. They are paying to replace like for like. For me, however, if you have a 3-tab shingle, I can always and will always upgrade that to a 30 year shingle and stay in the constraints of what insurance estimated. So I do.
You can certainly pay a cheaper roofer and save your insurance carrier the excess money. Just make sure you are actually still getting a quality job from a quality company. Don't get caught up in the idea that if you save the insurance carrier $6,000, you somehow will be immune to higher premiums in 6 months. You will still get increases. We all do. Whether you replace your roof or not. That's why I always encourage just going with insurance and moving on with life.
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I'm talking comparing bids from the same company, same shingles, same underlayment, etc. They're 100% taking advantage of someone else paying the bill.
A small roofer will have a wide swing in out of pocket cost vs. an insurance deal. If I have to compete out of pocket, then price matters. I have to squeeze every penny out and make sure I am making enough profit to make it worth doing and I won't out compete a mom and pop shop. Ever. I can't for the reasons above.
When we price a roof, we use the same insurance price list as insurance. It is far better to estimate with the same price list and end up in the same ballpark. But to your point, if the insurance is paying the bill, and it costs you the same either way, there is no roofer that isn't going to charge the carrier less than the carrier already agreed to pay. It's business. The entire purpose of being in business is to turn a profit. Some jobs have low profit, some have high. Either way, the homeowner only needs to worry about the fact that it costs them the same and that they should be making sure they get everything they possibly can and the best possible job. When you go with a cheaper roofer, they may make a much larger profit, or even charge you less if you want, but for that same money, I can give warranties and offer all major brands of shingles with top tier warranties if you want because of our credentials.
It just comes down to what you value.
