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Last Post 07/28/2010 7:50 PM by  Goldust
Allstate Has Acted In Bad Faith
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Odin
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10/28/2009 10:39 PM

    Hello everyone,

       I am writing this blog entry in order to reveal the facts behind what Allstate has done here in the State of Colorado during this 2009 hailstorm season.  Once again Allstate has hit a new low in how they operate, shortchange their Insureds and the contractors who do the work for their Insureds, and how Allstate is getting away with it.

       Here are some basic facts....

        Allstate has....

          a) Gone into the IntegriClaim software and they have changed the line item prices in order to shortchange Insureds.

          b) They use their "26%" O&P and $14.00 "Roof Stocking Charge" to justify downward pricing, say for example, 25 yr 3 tab from 158.00 approx per square (without felt, on only) down to $68.88 per square.

          c) If a contractor actually becomes the General Contractor on a project Allstate then double-knifes the contractor back by saying that they are not entitled to a true 10 & 10 for O&P because they already paid the "26% O&P".

          d) Bottom Line....Allstate has acted in bad faith in undervaluation of losses by altering the price guide distributed by MS/B (IntegriClaim)......

     

       Any comments?  We have recently received a legitimate copy of IntegriClaim and we are in the process of gathering evidence to present to the Colorado Department of Insurance so that this situation can be looked into by the Attorney General's office here in Colorado.  Any former Allstate/Pilot guys out there???  Tell me what you think.....Isn't Allstate the absolute lowest form of life on the face of this planet? They are 10 times worse than Lloyds of London......Horrific!

     

       More information to come, and believe me when I say that the Colorado Department of Insurance is going to find out about ALL of what Allstate has done this summer....This is worse behavior than they displayed following Katrina....

     

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    JustinAdjusting
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    10/28/2009 10:49 PM
    You sound like a disgruntled contractor who obviously dosen't know the meaning of bad faith.


    Best of luck.


    Justin
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    Odin
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    10/28/2009 10:51 PM
    Also, let me give you some basic numbers to ponder.....On an average roof most carriers adjustments are providing between $320-400 per square, and Allstate is coming in at approximately $220-240 per square. Shingle suppliers in the Denver area at contractor discount rates are selling 3-tab 25 yr (choose your brand) for around $85 to $90 per square, however Allstate is wanting to pay $68.88 per square for materials alone....Most carriers are paying approximately $40-55 per square for labor and Allstate is coming in at $22 per square for labor alone...

    Let me tell you folks that worked these 3 hailstorms for Allstate/Pilot....They have got all of you to act in bad faith and believe me before I leave the State of Colorado the Attorney Generals office as well as the Colo. DoI will know all about this situation. I hope you all have O&E coverage or I hope Allstate N.C.T./Pilot has provided that coverage for you because look out.....This is gonna blow sky-high on the local news stations when the time comes....

    Allstate is forcing their Insureds to contract with lowlife un-insured, disreputable gypsy roofers because most legitimate local contractors/roofing companies will not deal with Allstate here, let alone accept their bogus "IntegriClaim" adjustments.....And also know this much, Marshall Swift/Boeckh has also been made aware of this situation and we expect that they will be indemnified from this situation due to their cooperation with providing information and evidence to pin the tail on the Allstate donkey, so to speak.....
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    Odin
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    10/28/2009 10:52 PM
    Oh and my brief examples of what Allstate is adjusting losses for...Know this much, the price discrepancies are across the board.....This is Bad Faith Folks!!!
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    Odin
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    10/28/2009 11:03 PM
    As to Justin's comment it is bad faith to claim that you are using a specific adjusting software and claim it is legitimate when in fact you have gone into the adjusting software itself and downward priced all operations. I guess we will see if the DoI of the State of Colorado believes that Allstate has acted in "good faith" in what they have pulled up here in Denver. And Justin, if your an employee of Allstate N.C.T. and/or Pilot, get ready my friend.... :)
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    Odin
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    10/28/2009 11:12 PM
    Justin, here is a definition of what "Bad Faith" is....just wanted to show you that what Allstate has done is indeed bad faith...

    Insurance bad faith is a legal term of art that describes a tort claim that an insured person may have against an insurance company for its bad acts. Under the law of most jurisdictions in the United States, insurance companies owe a duty of good faith and fair dealing to the persons they insure. This duty is often referred to as the "implied covenant of good faith and fair dealing" which automatically exists by operation of law in every insurance contract. If an insurance company violates that covenant, the insured person (or "policyholder") may sue the company on a tort claim in addition to a standard breach of contract claim. The contract-tort distinction is significant because as a matter of public policy, punitive or exemplary damages are unavailable for contract claims, but are available for tort claims. The end result is that a plaintiff in an insurance bad faith case may be able to recover an amount larger than the original face value of the policy, if the insurance company's conduct was particularly egregious.

    Now, taking this definition into consideration, the accused, Allstate, has indeed committed "bad faith" by not fairly dealing with their insureds....I.E.--they have provided amounts of money for said loss(es) that necessarily will cause an "Allstate Insured" to contract with a disreputable contractor, henceforth Allstate has shorted their Insureds by forcing them to get shoddy repairs done to their dwelling(s)....Like I stated earlier, we will see what the Colo. DoI thinks about what Allstate has done.....
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    claims_ray
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    10/28/2009 11:31 PM
    Soap boxes for sale. Cheap. Only one previous owner.

    How are you to prove that these other contractors making these repairs are performing shoddy work? You sound like a stormchasing contractor yourself as you have stated that you had worked Katrina.
    Why would you possibly come on here and threaten any adjuster?
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    dnjsdad
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    10/29/2009 4:26 AM

    If the roofer signs a contract that states he will work for insurance proceeds with the insured which is what most roofers do.  Then how did the insured get short changed?  And who is to say that the roofers that roofer A picks up at the local home depot parking lot are any worse than the ones that you pick up at the Lowes parking lot????  Speaking of unscrupulous roofers after hurricane Ike the home I was living in got a new roof, after the new roof was installed I had roofers coming by knocking on the door and asking if I would like them to look at my roof.  I was curious on what they would say, not one came down and said your roof looks good, four yes four roofers in a row said I needed a new roof and they would handle my insurance company for me.  It was very interesting. 

    On another note today I met with a roofer and a PA to inspect a risk, the roofer went on the roof while I was walking around the exterior, he was getting off the roof when I came back around to the ladder.  I asked him what he saw, can you believe my surprise when he said there was no damage.  The look on the PA's face was priceless.  But how could he argue with his own contractor?  What a great day. :)

     

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    Ol' Ghost
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    10/29/2009 9:57 AM
    So, you think Allstate is low balling and Allstate thinks you are price gouging. Is the answer going to be found somewhere in the middle of the road yet again?
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    mgfirment
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    10/29/2009 10:24 AM
    ODIN SAID - Also, let me give you some basic numbers to ponder.....On an average roof most carriers adjustments are providing between $320-400 per square, and Allstate is coming in at approximately $220-240 per square. Shingle suppliers in the Denver area at contractor discount rates are selling 3-tab 25 yr (choose your brand) for around $85 to $90 per square, however Allstate is wanting to pay $68.88 per square for materials alone....Most carriers are paying approximately $40-55 per square for labor and Allstate is coming in at $22 per square for labor alone...

    Let me tell you folks that worked these 3 hailstorms for Allstate/Pilot....They have got all of you to act in bad faith and believe me before I leave the State of Colorado the Attorney Generals office as well as the Colo. DoI will know all about this situation. I hope you all have O&E coverage or I hope Allstate N.C.T./Pilot has provided that coverage for you because look out.....This is gonna blow sky-high on the local news stations when the time comes....

    Allstate is forcing their Insureds to contract with lowlife un-insured, disreputable gypsy roofers because most legitimate local contractors/roofing companies will not deal with Allstate here, let alone accept their bogus "IntegriClaim" adjustments.....And also know this much, Marshall Swift/Boeckh has also been made aware of this situation and we expect that they will be indemnified from this situation due to their cooperation with providing information and evidence to pin the tail on the Allstate donkey, so to speak.....


    Odin:

    As you requested, I have pondered the numbers presented above and have some numbers of my own you should take time to ponder. In this scenario, let's take a look at the actual cost to remove and replace 30 squares of 3-tab, 25 year shingles on a 6/12 roof in Denver. According to Lowes' website(Aurora, CO) the cost of 3-tab, 25 yr shingles is $62.85/sq, #15 felt is $16.50/roll, and drip edge is about $.40/l.f.. So, the cost of shingles is $62.85 x 30 sq. = $1,885.50, felt is 8 rolls x $16.50 = $132.00, 300' l.f. drip edge x $.40/l.f. = $120.00, let's allow another $500.00 of materials for fasteners, caulk, razor blades, and another 3 squares of shingles and felt to account for waste. Total estimated materials = $2,637.50 x 9% tax = $2,875.00 total materials cost - let's just call it $3,000.00.

    You say labor is about $50/sq, so let's calculate 33 sqaures x $50 = $1,650.00

    Estimated cost to haul off debris = $500.00

    Total estimated cost(materials, labor, debris) = $5,150.00. Of course, we have all heard about the exorbitant cost roofers pay for insurance, offices, trucks, tools, permits, etc, so let's allow another 10% for overhead, or $515.00. Actual cost + overhead = $5,665.00. What is a fair profit for a roofer - can we agree on a 20% profit margin? At a 20% profit margin - profit would equal $1,416.25($5,665.00 x 1.25 = $1,416.25). Therefore the total cost to replace the roof, including 10% overhead and 20% profit margin(which is greater than a profit percentage), is $7,081.25. Since us adjusters don't really understand what it takes to replace a roof, let's throw in another $400.00 or so and say the actual estimated cost to replace the roof is $7,500.00. $7,500.00/30 squares = $250.00 per square.

    Please let me know what is wrong with these calculations. You contend that you should be getting $400.00 per square, or $12,000.00 for this particular 30 square roof. Let's just use round numbers based on the calculations above and say that the actual cost to replace the roof before profit is $6,000.00 - if that is accurate, then you are saying that you "deserve" a 50% profit margin on this roof. But I am sure that you are paying your subcontractors and suppliers at least this much profit, right? And let's not forget your workers' comp. and general liability carriers that I am sure are also making 50% profit on you.

    You may want to take the time to more closely examine the adjusters' estimate and look at the bottom line, instead of immediately trying to nitpick every line item. Allstate is likely using a component-based estimating system that details each operation required to replace the roof.
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    LENNY
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    10/29/2009 10:52 AM
    What you are insinuating here is not the full story. I’m an adjuster working this storm here in Colorado for Cunningham Lindsey. I have had conversations with both Allstate adjusters and roofing contractors regarding this issue you are referring to. Yes, Allstate does have their own price in MSB but are settling the claims fairly with the insured’s at the end. The contractors are negotiating with Allstate to get the fair and reasonable price required to complete the work.
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    Tom Toll
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    10/29/2009 11:46 AM

    Has anyone heard the term "price gouging". $320.00 to $400.00 per square for 25 year shingles is ludicrous. I will be interested to see what the Colorado DOI has to say about this matter.

    Success is not final, failure is not fatal: it is the courage to continue that counts.
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    Ray Hall
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    10/29/2009 4:32 PM
    Odin I think you should try to get real truthfull information before you go public was your dribble opine about the insurance world.
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    ChuckDeaton
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    10/29/2009 5:04 PM
    Odin, when you actually find a lawyer willing to name Allstate in a bad faith suit and you actually win, please, come back here, back to this board and crow, get up on the fence and crow, stand on your tippie toes and crow your heart out. Any Arkansas Dominicker rooster can show you how.

    Without a doubt Allstate is bad faith knowledgeable and while being mentioned in the same sentence with the word bad faith, by a roofer, doesn't bother them, being named in a bad faith suit by an accomplished trial lawyer does. Allstate is not going to allow a bad faith judgment to happen.

    If any company knows the residential insurance market in the United States and the legal climate in the United States it is Allstate.
    "Prattling on and on about being an ass with experience doesn't make someone experienced. It just makes you an ass." Rod Buvens, Pilot grunt
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    rbryanhines
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    10/29/2009 10:03 PM
    Man I don't know where to begin on this topic. First of all I'm not sure why this guy posted on this web.My disclaimer is that I'm a contractor/ project consultant. I do have a little experience in the adjusting field
    .
    "Most carriers are paying approximately $40-55 per square for labor and Allstate is coming in at $22 per square for labor alone... " at 40-55 for labor I'm not touching the job. I'm based in the Houston market ( I travel but mainly commercial work) and we are one of the lowest priced market for roofing.I have not seen that low of a price in a while.

    " b) They use their "26%" O&P and $14.00 "Roof Stocking Charge" to justify downward pricing, say for example, 25 yr 3 tab from 158.00 approx per square (without felt, on only) down to $68.88 per square.
    c) If a contractor actually becomes the General Contractor on a project Allstate then double-knifes the contractor back by saying that they are not entitled to a true 10 & 10 for O&P because they already paid the "26% O&P".

    I'm not sure what all that means. I will go ahead and say it 10 & 10 is a myth! not sure who made it up. For my company to be profitable we have to have a gross profit margins around 35% . I sometimes play the 10 and 10 game but in the end the margin has to be right.

    " it is bad faith to claim that you are using a specific adjusting software and claim it is legitimate when in fact you have gone into the adjusting software itself and downward priced all operations "
    Not really bad faith just because they are changing prices. If so it would be gouging if you changed the price up. Adjusters move prices according to local acceptable rates and their research. Not sure but maybe thats why they call it adjusting. I find that most of the time the price guides are workable. Errors occur when associated cost are not accounted for in the unit cost and omitted from any other line item in the estimate.

    "If the roofer signs a contract that states he will work for insurance proceeds with the insured which is what most roofers do.Then how did the insured get short changed?"

    Many times contractors get hosed. Accepting clients can be as tricky as knowing what vendors to take assignments from. There are times when we have worked based on insurance proceeds. But only if the carrier is paying based on the acceptable rates. I can tell you from experience. In this type of contingency contract the contractor is on an Island. The insured all of a sudden starts believing in santa claus and the easter bunny. They shift their financial responsibility to the contractor. In contracting you have to use a form of know before you go.

    "I have had conversations with both Allstate adjusters and roofing contractors regarding this issue you are referring to. Yes, Allstate does have their own price in MSB but are settling the claims fairly with the insured’s at the end. The contractors are negotiating with Allstate to get the fair and reasonable price required to complete the work."

    Not sure I'm understanding you point but this appears to be the picture of bad faith. Allstate is suppose to inform and pay atleast the reasonable ACV value at the time of the loss. The insured should not have to get a contractor involved to get this fair value.

    Insurance companies are many times getting real close to bad faith. Anyone in this business needs to understand this fact. being shocked or pissed about it would be like walking in a snake pit and being surprised when you get bit.

    you can have the soap box back!





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    Ray Hall
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    10/30/2009 12:44 AM
    Bryan in your own words "but are settling the claims fairly with the insured,s at the end. This is simply k eeping the lid on contractors after a storm. You and I know the contingency contractors make a good profit on each job. You and I also know insurance restoration contractors would not be in buisness unless insurance campanys did not support them. Insurance estimates WILL NEVER BE "UNFAIR" as long as 10 contractors call be called on the phone and at lest 75% will take the job on a Competent adjusters estimate. You owe me lunch.
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    insprojohn
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    11/12/2009 12:14 AM

    Allstate is known to be one of the hardest insurance companies to deal with if you are a contractor.  Unfortunately for the contractor it is the insured who decides whether or not to file a bad faith complaint not the contractor.  If the insured has her property repaired she is happy.  If the insured is happy then the insurance company is happy.  If you are sad Allstate does not care.  I am an adjuster but at this time I am selling roofs as their is nothing happening right now.  Even my pal with 36 years of adjusting experience is starving.  So make all the complaints you want.  If you are successful that would be great.  However, Allstate has been difficult for many years.  I even read the depostion of an Allstate Claims Manager by a hardcore Sue Everyone Successful Attorney who got Millions of Dollars from Allstate.  He won his case!  This was 15 years ago.  And guess what?  Allstate still does "whatever"  it wants to do.

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    insprojohn
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    11/12/2009 12:27 AM

    Hey Ray,

    I have to agree with Bryan about Allstate.  They are the worst insurance company to deal with.  I have yet to handle my first claim as an adjuster.  However, I was an agent and underwriter for 10 years.  So I do understand an HO3 pretty well.  I am even starting to crack open a few CPCU books to more deeply understand the Commercial Property Policy.  I am very intrigued by a discussion of a Landlord rental policy offered by State Farm that according to Public Adjuster William Cook is an "open perils" landlord policy?  I am like wow.  I did not even know something like that existed as I am only aware of DP1, 2, 3.

    I was trying to follow your whole Bubba Brown & Jezebel HO3 story.  I am gonna have to spend 15 minutes figuring out who all the players are.

    But from what I can quickly tell is there will definitely be some subrogation against the company that fixed the VW leaky gas tank owned by Elton Jack. 

     

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    Ray Hall
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    11/12/2009 12:28 PM

    The DP-3 is a "risk of loss policy and it can be written on rental property, building and contents.

    I so not buy into "open policy" . This is language used in court before a jury by plaintiff's expert witness. It,s also used by PA.s and some adjusters. The first time I heard "open policy" was in 2004 when I was setting at the defendants table in court in Conroe, TX on a multi-million dollar mold lawsuit.

    All due respect to Bill Cook.

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    Medulus
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    11/12/2009 12:51 PM
    The term "open perils" is now used in the AICPCU courses to replace the older terminology "all risk", which was always a misnomer. I don't thing I have ever seen the term "open policy".
    Steve Ebner CPCU AIC AMIM

    "With great power comes great responsibility." (Stanley Martin Lieber, Amazing Fantasy # 15 August 1962)
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    Ray Hall
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    07/19/2010 9:20 PM
    Oh god I discovered I could see wind lift damage in the rain and its been raining the whole month of July, and with my slicker suit I can still inspect 6 a day with the roofers and write them up the same day. No need to come to Houston, as this is very hard work and it takes a lot of training and eye balling to tell unsealed shingles from 10 other reason from genuine IKE wind lift, but i fall back on the confusing language, but my policy does not have any, so I just roll over to keep a total loss of $10,000 turning into a $150,000 loss at mediation. Man you cant beat experience as it saves the insurance carriers $840.000 a day when they hire me. 
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    Roy Estes
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    07/21/2010 8:29 PM
    Odin,
     
    With all due respect, I say........
     
    Having worked several Hundred hail/wind claims in Colorado For Allstate in 2009, Reinspected another several hundred, and file reviewed several thousand, I can Say this much. Colorado Contractors and Roof Vendor/Suppliers is more of a PRICE GOUGE than a business, There are Roofing companies who are charging $400.00 per square for 3 tab 20 year. When ANYONE can go to Lowes or Home Depot and Purchase the material for around $38.00. Companies pay the Labor that actually do the work there about $40.00, So this means About $300.00 profit.
     
    I think What Ill Do is call American Shingle, or other National Roof Vendors and have them saturate the area, to drive the prices down in that area.

    I Re inspected a roof that had T-Lock, and Had one corner of one shingle damaged on a 30 square roof, I found a like kind/Quality and Color shingle in Denver, and the roofer was screaming because he stated they dont sell T-Lock around here anymore. I went and purchased the Shingle and put it on myself. The insured was happy and the roofer got laughed away from the job  by the insured.
     
    I love Denver area, I love working in the Denver area, But the Contractors and Lawyers there are worms, and could use a little spanking, dicipline in education in price gouging.
     
    My Suggestion to you is QUIT BEING A CRY BABY, Put on your big boy panties, Allstate and all vendors and adjusters that work with Allstate are good people, and have care and compasion for their customers from what I know.
     
    Just my opinion is all. :-)
    "Each of us as human beings has a responsibility to reach out to help our brothers and sisters affected by disasters. One day it may be us or our loved ones needing someone to reach out and help." RC ESTES
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    Ray Hall
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    07/21/2010 8:55 PM
    Amen Roy.... these crooks don,t go to California.
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    Ray Hall
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    07/22/2010 7:52 PM
    Which schools offer a money back guarantee, installment payments, deferred payment until you are deployed. Please chirp up and I will teach 8 hours of commercial losses for free.
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    CatAdjusterX
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    07/25/2010 9:48 PM
    I was told by one of my new members that
     
    AMCAT will refund your tuition (Texas All-lines, Xactimate level one and adjusting 101 over 5 days) upon your 100th loss being submitted and accepted.
     
    The devil seems to be in the details as I believe it must be while deployed by them ,within 1 calendar year and since I can count on one hand adjusters I personally know who have after becoming licensed by a school and placed on their roster and actually being deployed from that roster.
     
     
     
    Robby Robinson
    "A good leader leads..... ..... but a great leader is followed !!" CatAdjusterX@gmail.com
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    Goldust
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    07/28/2010 7:50 PM
     
     
      Roy,
     I have to agree with you I have done claims with the A company since Hurricane Andrew. If there is even a small deficiency that needs to be taken care of they are right therte to take care of it.
      usually the deficiencies are contributed by Adjusters who doin't slow down long enough to do their jobs right. That is to bring the insured back to WHOLE!
     
       GOLDUST!!!
    JERRY TAYLOR
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