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katadj
USA
315 Posts |
 Posted - 02/13/2003 : 22:57:45
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Thank you Cheryl, for a concise and informative opinion. "They take the money, they owe the money" is what im hearing in the response.
Also the advice to always "CYA" is well noted.
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Cheryl Joyce
USA
45 Posts |
Posted - 02/13/2003 : 23:57:43
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I could almost sound like I have personal experience in those areas, you think?, I may have lost a little weight by doing it that way (you know getting my bottom chewed out), but right is right and wrong is wrong.
The insurance policy is written in separate sections for reasons. It is only an actuarial calculated document which is basic concept and then fine tuned with statistic applications and scenarios for predicted events and then percentages are applied. What a mouth full of jargon. But if you know anything about insurance, it makes sense, because that is how they determine the premium cost and inside all jargon is a factor for O & P. Therefore, when it comes time to pay the claim the O &P is still a factor it's just in the pay column in lieu of the collect column of the calculations no matter who is doing the work.
William S. Cook has actually pointed out the bulletin where this is stated with the Department of Insurance.
The main reason that most insurance companies toy around with this issues is because the 10 & 10 is something they can add to the total of the appraisal them self when confronted by the insured or a contractor and it reduces the fee from the handling adjuster because the amount is not added on to the appraisal by the adjuster and adjuster's fee is based on the RCV - up to the amount of Insurance involved. So bigger claims will result in higher amounts of O & P. The more the insurance company can keep out of the total of the loss damages, the lower their fee will be, as a general rule. They can add it in any time; Same as they can subtract it out. It is only a game to play and cheat the adjuster, they know that they are not going to get out of paying the O & P when confronted they are just getting out of paying a higher adjuster fee with it excluded. That O & P 10 & 10 could put the fee into the next fee category.
This is not a true statement for all companies. There are some companies that believe in doing things right the first time and make sure all parties are treated faily under the handling of a claim. And those adjusters that know how to sell those claims, the right way, will make more than those who don't. That's the name of the game, making money and treating everybody right and fair. Getting what they pay for. |
Edited by - Cheryl Joyce on 02/14/2003 00:05:44 |
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Dadx9
USA
143 Posts |
Posted - 02/14/2003 : 00:33:13
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One issue we are forgetting in the settlement of the claim is, there is already substantial profit in the body of the estoimate without O & P. So if we pay 'contractor' prices and the homeowner does the work themselves, they are profiting. They make sub-contractor wages plus profit.
As an IA, most of my customers do not want the O & P included unless it is actually incurred. Some adjusters suggest to include thew O & P and then depreciate 100%. That way it's there, if needed. Not a good idea. Homewoner sees money that they are not getting, creates unecessary question. For my customers I let them know what the claim would be including O & P in the short form report.
As a staff adjuster, we paid O & P on all claims that exceeded three trade, period. Plays heck with those severity numbers!!!
Perhaps a method would be pay 10% overhead and not profit. Eliminating the concern that homeowners are making a profit. |
Don
"To be held in the heart of a friend is to be a king."
Bruce Cockburn |
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Cheryl Joyce
USA
45 Posts |
Posted - 02/14/2003 : 01:04:29
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I think what is lost in the whole picture is that there is NO EXCEPTION for who gets what or what percentage is calculated or how it is distributed or how the homeowner makes the repair. There are written rules for qualifying for O & P, as someone pointed out earlier, certain trades don't get to be calculated in the O & P, but that is where the ADJUSTER uses the correct data base for estimation of the damages, knowing which electronic box to turn on and off when they set the estimate parameters up, reviewing the characteristic of the make up of the line item price involved and know how to ADJUST the factor to be correct and then place the 10 & 10 O&P at the bottom of the claim calculations. Also paying attention to content items which would not be part of the O&P and to know if certain trades are performed by an outside service which has the O&P already figured, you would just eliminate that from the overall O&P, but because the premium for the cost of the policy already calculates and includes the factor for O&P inclusive, the insured is already paying for this "privilege" then they would receive the benefit in the pay out of the claim and there is no profit. It is a pay me now (to the company), they pay you later (to the insured) situation if there is a claim.
There are 2,000,000 reason how to justify or not to justify who gets O & P, but the bottom line is that each claim based upon it's individual merits has to qualify for O&P and it should be paid, no matter who is performing the work. Board of Insurance says "THS IS THE WAY IT WILL BE DONE IN ORDER TO COMPLY WITH FAIR HANDLING." THE PREMIUM IS COLLECTED BASED ON THE INCLUSION OF O & P AND THEREFORE THE PAYMENT OF THE BASIS OF THE CLAIM WILL ALSO INCLUDE IT, O&P, IF IT MEETS THE CRITERIA. DONE. |
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Newt
USA
657 Posts |
Posted - 02/14/2003 : 06:20:22
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| The O&P that is paid to the client is paid toward the work done and to the person who does the work. That payment should not be considered profit to the insured, it is profit to the one who gets the job done. That is in the contract if three or more trades are used. |
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CatDaddy
USA
310 Posts |
Posted - 02/14/2003 : 06:52:26
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The addition of O&P to an estimate should be evaluated on a case by case basis. Most of the reasons are listed in the posts above. There should be no hard and fast rule say its should be applied on every claim. Some people have talked about the guideline that added it on 3 trades or more. Well, there are some instances where you would apply it when only 1 or 2 trades are involved. What about the 80 year old couple that doesnt know drywall from pegboard? Are you going to deny them from the use of a general contractor that may add O&P for coordination of the repairs? No. On the flip side, should add O&P to every 3+ trade estimate you write? No. I am not saying that you won't/shouldn't be paying O&P on alot of claims, you will. But it should be evaluated on a claim by claim basis.
Should an insured profit from their loss? Absolutely not. They pay premiums based on what their PROPERTY is insured for, not their annual incomes. Its not a money making opportunity for them. Their home is being returned to its preloss condition. You am not there to save them from their financial problems.
And the best for last. Isn't most of your motivation, for those of you wanting to pay O&P to everyone with a waterspot, just the fact that your billing will go up 20%? More for you right? After all, its not your money is it?
Have a good day. |
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CCarr
Canada
1200 Posts |
Posted - 02/14/2003 : 07:10:20
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| Mr. Emfinger (aka CatDaddy) your last paragraph, and not the 'good day' one, but the one relative to your 'motivation' comment; is both callous and demeaning to those who have chosen to post to this thread. |
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Newt
USA
657 Posts |
Posted - 02/14/2003 : 07:31:33
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I think Cheryl mentioned "if it meets the criteria" and I also mention 3 or more trades.
That wouldn't put every claim in the same catagory.
As stated all should be handled, case by case, I agree.
How ever if it is in the contract to pay O&P for the jobs, I can't see the difference in who gets the money for it. The insured isn't getting profit for the damage, he is getting money for his work. To get less than the GC is a discrimination according to the contract. |
Edited by - Newt on 02/14/2003 07:57:02 |
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CatDaddy
USA
310 Posts |
Posted - 02/14/2003 : 07:57:55
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Is it just because the STUFF is from me CLAYTON? You seem to take shots from others a little less personally than comments from me. I am sorry you feel threatened by my opinions. Some of them must hit close to home.
I paint a board picture with my comments. People who know take pride in their work and do the job the right way know I am not talking about them and I always applaud them. Read my past posts. The ones who dont, the turners and burners as you call them, they hurt us all and you dont like them any more than I do so why are you popping off? I only expect the quilty parties to respond the way you do. I am giving my personal opinion. Sit and read it just like I sit and read yours and quit wearing your feelings on your sleeve.
And are you gonna tell me people like I described are not out there?
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JimF
USA
1014 Posts |
Posted - 02/14/2003 : 08:16:53
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Clayton, let's face it, some 'adjusters' don't want to pay for O&P on losses for various and sundry reasons, or for that matter, no reason. Whim perhaps??
*Some adjusters* also don't want to pay for damaged mail boxes, dryer vents, birdhouses and God only knows what else.
*Some adjusters* = We have been informed in no uncertain terms, there are at least 10 like this. |
Edited by - JimF on 02/14/2003 08:25:58 |
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CCarr
Canada
1200 Posts |
Posted - 02/14/2003 : 08:27:35
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Mr. Emfinger, it is certainly not because the demeaning post was from you specifically, please get that out of your mind. As well, my income is not derived from the value of any estimate I may do. I found your comment demeaning to those that were party to the discussion on this thread. It infers that the conversation in this thread, by those that support the notion of allowing overhead, is as you say, 'motivated' to gain acceptance of this for personal increase in income.
I certainly am not threatened by any of your opinions, as I am sure you are not nor should be by mine. I just find some of your opinions, like the one in question, hit home regarding the professionalism of this indusrty.
I don't know Lannie what a 'quilty parties' are, so I cann't relate to that or respond in any way to that.
Yes Lannie, there are people like 'that' out there (aka fee motivation through estimate inflation), but your comment about that was made with a wide brush. You, like I, and all those responding in this thread, I see as the parties to this discussion, and hence your 'motivation' remark was seen by me as directed to the parties of this discussion; and not to the general population. That is why I took the exception to it that I did. I do not consider it a 'pop off'. |
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Newt
USA
657 Posts |
Posted - 02/14/2003 : 08:29:01
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I would like to clear up one point. My opinion is not based on the bottom line of fees. I have an income and the more I make the more taxes I pay from my present income. In fact they take 1 dollar for every three and tax what they took.
I would like to see the client get what he has comming, no more no less and if client or GC deserves O&P for their work, not the loss, thats fair. To do otherwise is unfair trade practices and I believe Alan J would agree, from what I read, that is the opinion of the courts. This is not greed it's the right thing to do. |
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CatDaddy
USA
310 Posts |
Posted - 02/14/2003 : 09:09:38
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Jim, do you even read posts before you respond to them? I clearly said that "I" believe O&P should be payed on claims, evaluated on a case by case basis. You could pay it on 100 claims in a row and then on the 101st, you may not. It all depends on the claim.
As usual CCarr, you interpret things the way YOU see fit in order to build your defense. Whatever. You're right. I'm wrong. Please open your mind and enlighten us some more with your all-knowing wisdom. I am just happy to be in the company of your greatness. I am sorry I thought opinions other than yours and JimFs meant something on this site. Forgive me. |
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CCarr
Canada
1200 Posts |
Posted - 02/14/2003 : 09:21:10
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No need Lannie for the last paragraph of your last post. I responded honestly as to why I made the post I did in response to your 'motivation' comment. That was all it was, an interpretation of what I read.
I am not great, I am not all knowing, and opinions that have relevance are welcome from you; and it is of no significance if we disagree from time to time. |
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mshort68
USA
138 Posts |
Posted - 02/14/2003 : 09:33:34
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| Does Jim F. have short man's complex or what? Believe what you will some people are faster than others, not demeaning anyone. O&P on a case by case basis not necessarily because you have 3 or more trades. Consider roof damage, decking damage and fascia damage. I wouldn't pay O&P unless a licensed GC. |
The grass is always greener on the other side, but it still has to be mowed! |
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Paying GC Overhead and Profit (O&P)
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