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Gale
USA
231 Posts |
 Posted - 04/08/2004 : 16:11:40
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While I think many agree with Kile that the “whole price list and software issue is a red herring” in the NFIP issue being discussed here but it a more general sense it is a major issue especially for software vendors and the carriers. For the first time the databases used by software vendors has been called into question by the general public (media).
I have had to field calls for the first time ever asking if PowerClaim used the proper Craftsman database for residential losses in general since all our CD’s clearly states we use Craftsman as our database source. While we were able to answer yes to our carrier accounts it still raised the question that had never been raised before the article appeared in a major newspaper.
The carriers know that once it was printed that a software vendor was using database pricing that “would produce estimates that are 25 percent to 50 percent too low” according to the database vendor (from the article in the initial post of this thread) it was bad news regardless of the facts.
I will bet there are very few PA’s that have not laminated this newspaper article to show to homeowners in order to “prove” that estimates can be 25% to 50% too low just because of the adjusting software alone before they might factor in bad adjusters, carriers, etc. While only one software vendor was singled out a “good” salesman could use the article to raise questions about all software. What homeowner would not like to be able to read in black and white from a major newspaper that the “smoking gun” was adjusting software that caused under payment if they were already unhappy with their checks?
Of course there is nothing wrong with software and price sources to have the spotlight shined on them since some make the claim that software is being designed for lower skilled non-adjuster types without any construction knowledge. Naturally “if” you can replace a $60K employee with a $20K employee because of software used then the software vendor is adding more value to the carrier than the adjuster and the sky is the limit for what that software is worth to the carrier. Can adjusting knowledge really be moving from the adjuster to the adjusting software? What about in the case of auto repair? What about in the case of medicine?
The one thing that gets mentioned from time to time is how can a the company that writes a contract, sells the same contract, services the same contract also be able to dictate the settlement of that same contact? From what I can see the entire NFIP reason for existing is because people want to live where nature did not intend for anyone to live nor where any carrier wanted to write coverage so the “government” got involved so now it is a political issue. It must wind up increasing insurance rates several times, which in turn will limit the ever-increasing value of beachfront property.
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Reconstruction Man
124 Posts |
Posted - 04/09/2004 : 00:14:59
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Kile Sez,
"Like I said in the Isabel thread. I believe the ["National Construction Estimator"] software issue is a complete red herring. It is the same software that is used to figure insurance repairs
on all kinds of other non flood losses.”
-Kile,
quote:
Like I said in the Isabel thread. I believe the software issue is a complete red herring. It is the same software that is used to figure insurance repairs on all kinds of other non flood losses. As long as allowances are made for tear out and debris disposal it shouldn't really be an issue. Once this little scandal dies down I don't think the software or the price lists will be the real issue anymore.
[edit use this quote method]
This ain't gonna' make you smile.
The actual construction business cost book data that should have been used by those flood claim "adjusters" is found in the "National Renovation & Insurance Repair Estimator", the sister cost-book of the "NCE" estimating program.
We’ve spoken with the editor, Mr. Jon Russell, personally, about 1.5 years ago. Was kinda’ surprised us to learn some of his [California] clients are still trying to get 1994 earthquake claims settled? Hmmm… Good tech and constuction folks behind the whole program. One of our favorite’s.
Kile Sez,
“As long as allowances are made for tear out and debris disposal it shouldn't really be an issue.” Once this little scandal dies down I don't think the software or the price lists will be the real issue anymore".
-Kile
You are kidding right? Tear out and debris removal costs are the only differing cost factors between new construction business costs and reconstruction business costs?
Try beginning, financing, managing and ending {profitably) a few reconstruction projects with someone. You will be amazed at the seemingly endless challenges that are unique to reconstruction work.
Day sleepers, Ownerless Cars, Mature landscaping, Power Lines, Neighbor Input, “Impossible to find materials / don’t know it yet” research time, wrong "like and kind" materials sent by vendor, appraisal process happy adjusters, adjusters who only want to speak with homeowners about reconstruction issues homeowner is clueless about, etc., etc., etc.
Actually experienced a Pilot / Allstate adjuster use NCE in Weslaco Texas 2003. An 18 year adjusting veteran. He dug his hills in and played hardball. We got those "misunderstandings" ironed out, but, he still shouldn’t have done that…
Hmmm…25,000 reopened claims...and counting…
24,000 claims, not reopened claims.
BIG Opps[?] on those flood "adjusters" part. Again it is asked:
-Regarding the Isabel [flood] issue.
Why in the world would an [educated] decision be made to settle claims using NEW [general] construction business estimating products/processes/pricing software, instead of using well known [general] Re-Construction business estimating products/processes/pricing software?
Interestingly, the estimates would still look legitimate...right?
Wonder who all knew, and why it was a "good faith" thing to suggest / promote / practice?
Wonder if G.C. OHP was “ignored” in the claim settlements even if 2 or more trades were needed?
http://www.catadjuster.org/forum/topic.asp?TOPIC_ID=927
See Steps 4-7 And yes...it’s just a “theory”.
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KileAnderson
USA
875 Posts |
Posted - 04/09/2004 : 08:12:18
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Conman, You know nothing about the flood policy or flood work. It costs the same to lay carpet in an existing structure as it does to lay carpet in a new structure. Once the drywall has been cut out, it costs the same to put new drywall in an existing structure as it does to put it in a new structure. Once wood flooring is removed from an existing structure it costs EXACTLY the same to put new wood floors in an existing structure as it does on a new structure. It costs EXACTLY the same to paint the walls of an existing structure as it does to paint the walls of a new structure. Replacing the baseboards, chair rails, wallpaper are all the same. The only difference is you pay to take the old stuff out and to move the furniture to get it done. The repairs I have just mentioned are about 90% of all flood restoration work. What the software guy meant when he said that using that database would lead to lower estimates than needed was that new construction does not include tearing out and disposing of the damaged material. That's where the price difference on most of the stuff comes in. There will be a few areas where it will be more difficult to do a job than it is with new construction, such as wiring and ductwork, but if the wiring is damaged you are going to be tearing out that drywall anyway.
Have you ever handled a flood claim? Are you a licensed as an adjuster in Texas? If you are not you are in the minority, there are only about 40,000 of them. I suggest you stick to scamming your customers and just leave us the hell alone. |
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johnpostava
USA
35 Posts |
Posted - 04/09/2004 : 10:15:59
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I am enjoying the bantering between the "adjuster" and the "contractor" - it's classic. This is EXACTLY the reason why we have always used the prices in the National Contruction Estimator as the base "install" price in our databases. I have been an adjuster a very long time. During my entire career I have always had the NCE book on my desk or bookshelf. Why? Because, as Kile has said, once you account for tear out, protection of adjacent areas, temp. removal of personal property, etc..., you are basically dealing with new contruction when it comes to "replacing" or "installing" the new material. What better price to start with when working with the contractor who will be doing the work.
In addition, the NCE guide has been around for 50 years. It's tradesman's productivity calculations are time tested and in our opinion, the only true measure of what it takes to install the various types of materials in a home. Granted, Craftsman has TWO other cost books dealing with remodeling, restoration and repair. Over the years we have looked at both books and discussed them with their respective authors. We have always stayed with the NCE. Each of these two books, neither of which has the 50 years of history as the NCE, contain different pricing for basically the same operations.
As we all know, property ajdusting is not auto adjusting. Auto adjusters get to estimate in body shops (open and clean areas) and are replacing a finite number of well-known parts on a finite number of types of cars. It is far easier to "set in stone" the price of auto repairs once you know the labor rate of the shop. Property is not as easy. Every house is different. We provide our users with a rock-solid base price of what each repair should cost in install. These prices are time-tested and fully researched by Craftsman and our research folks. It is up to the adjuster to determine what to add to these costs and how to adjust those costs to the exact conditions found in the specific home being repaired. New contruction install prices are 'pure' and we allow adjusters to use our software tools to tailor the estimate to the house being repaired and the contractor repairing the house. To simply raise repair costs across-the-board to some level simply becuase it is insuranc repair would be inaccurate. Some homes are more difficult to work in and some are not. Some contractors charge more and some do not. It is up to the professional adjuster and the professional insurance restoration contractor to determine those "negotiated" values for THAT home and THAT contracting firm. Once the scope of work is determined, two reasonable professionals will almost always come to a meeting of the minds and the loss gets settled.
Our software has settled virtually millions of property clams since it was made first available in 1984 - first in DOS and now Windows. The vast majority of claims are settled on our database costs alone. The Maryland article nothwithstanding, this was also true in Isabel. Our databases contain all the vital data needed by professionals to arrive at an agreed price and are used by BOTH adjusters and restoration contractors all across America. The software tools we provide adjusters and contractors allows them to negotiate any price or item required to repair any home at any price. We do not use price guides supplied by insurance carriers nor do we "survey the market" and use prices supplied by contractors. We belive the free market at the time of the loss should always ultimately dictate the final cost of repair and restoration. Our database contains what we consider fair pricing for the work to be performed and all of the individual line items needed to prepare accurate restoration estimates. We always have and always will.
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ALANJ
USA
159 Posts |
Posted - 04/09/2004 : 12:00:27
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| We have all bashed Mr. Recon Man. Who among the posters to this thread have ever been a contractor or roofer? Who has walked a mile in his shoes? I ask one of my agent buddies what the average contractor was paying for liability insurance. The answer was scary. When you resort to name calling it usually means you ran out of facts to support your case. Let's see some facts! |
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katadj
USA
315 Posts |
Posted - 04/09/2004 : 13:23:03
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Well Alan,
Since you asked: Yes, there are many of us that have a significant number of years in the Roofing, Construction, and Insurance Restoration businesses.
The cost of Workman’s Comp for roofers has been noted in some areas at over 100% of salary, thereby more than doubling the posted costs.
As ALL tradesmen are subject to the WC rates established by the various states, every year, depending on the amount of the loss ratio in that state for that year the “Burden” varies from state to state and trade to trade.
Checking the WC rates in an area will give you an idea of what the “Real Contractor” is faced with as a labor burden in addition to their fixed overhead costs.
For example a waterproofer’s WC rate may by only 12%, a carpenter 45%, an Ironworker 125%, that is not to say these are the correct rates, it is set forth as an example.
Perhaps a new thread needs to be established for this discussion.
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Quaka
Cuba
17 Posts |
Posted - 04/09/2004 : 13:29:27
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| Well, now that the flood gates of reopend flood claims are about to start, how many of you think that you are going to be invited on this great new assignment?. I will bet that this will be handled from the top and not through any WYO's involvement. We are so thrilled that the software program issue is being put in the spot light. I, for one, would never use a product that has come under this much fire. We will certainly see a new way , reform, if you will, on all future flood losses. This little fiasco will eliminate many so called " Flood Adjusters" and thank goodness for that. When the real IA adjuster that knows the policy from top to bottom and knows how to properly document and close a flood claim, then these folks will be the cream of the Flood adjusting community. We look forward to cashing our weekly check, now that the reopen shuffle has begun. My advice to the software people would be to GOVERN yourselves accordingly. This NFIP issue smells of class action for the Legal Eagles. For the rest of you, may a hail event bring you much needed work. Let the games begin. |
Quaka Mole |
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ALANJ
USA
159 Posts |
Posted - 04/09/2004 : 14:05:49
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| I think WC and General Liability Insurance rates should be part of this thread. Maybe one of the software people can tell us how these rates are factored into the unit pricing or should it be added as a line item on the estimate? How were these factored into the software and rates used to compile the flood claims? Mr. Green, I hope you are watching! |
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ChuckDeaton
USA
373 Posts |
Posted - 04/09/2004 : 15:23:25
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| In Arkansas a business has to have more than 5 employees before Workers' Comp is required by law. So most roofing contractors are small firms and don't carry WC. Most contractors who do residential work do not carry WC. |
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JimF
USA
1014 Posts |
Posted - 04/09/2004 : 15:41:41
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| The same rule applies in NC as well Chuck. |
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trader
USA
236 Posts |
Posted - 04/09/2004 : 16:07:20
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I believe the problems with catastrophe claims lies at the feet of the insurance carriers for creating the catastrophe crew mentality and its inherent flaws.
Professional Adjusters have training and knowledge to work with friendly or otherwise contractors as well as insured's who are willing to work with both. I also believe 99% of insured's will accept the hammered out adjustment and the loss will be closed.
The problem begins with thousands of warm bodies who are turned out to perform this complex task with a computer and data base and the Isabel flood and wind losses and others will result. If the adjuster did not modify the data base prices the insurance carrier regarded the estimate generated as the only instrument needed to make the final settlement. Input from the insured or repair person was not needed. The fee schedule promotes haste. These practices will continue until the public demands "Agreed Cost Settlement" and adjusters begin to adjust.
[:D]
rayhall@kingwoodcable.net |
Edited by - trader on 04/09/2004 16:29:18 |
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ChuckDeaton
USA
373 Posts |
Posted - 04/09/2004 : 17:58:04
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The answer AlanJ is that in Arkansas the actual price charged for most residential roofing does not include insurance. Most residential roofing is done by individuals or very small contractors (families) or larger contractors who use small contractors. The only insurance required is minimum limits liability on vehicles. The roofer doesn't have to have an insured vehicle to work. Home Depot will deliver the materials to the job, all the roofer has to do is get himself to the job with his tools.
I am having my house painted and I doubt that the painter (a man and his wife) have any insurance. Because they are driving a newer dually my guess is that the pick up is financed and financing requires comp, collision and the state requires liability. |
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Linda
USA
127 Posts |
Posted - 04/09/2004 : 17:58:12
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| JimF, if you are working any residential in New York please check and see if there isn't still an endorsement for WC on their homeowner's policy. I recall this being the case about 5 or 6 years ago but haven't worked there since. |
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JimF
USA
1014 Posts |
Posted - 04/09/2004 : 18:20:17
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Linda, I think you are correct on the WC endorsement for New York homeowners, but I need to do a little research and will then post the endorsement number and language therein.
By the way, for the past couple of weeks I have been handling residential claims out on Long Island, which is really a trip in more ways than one. (I'm staying in Milford, CT so I take the ferry ride across LI Sound and back to inspect losses) |
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rvondohlen
USA
1 Posts |
Posted - 04/10/2004 : 00:33:15
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Not enough money.
Obviously if every Isabel victim had received their perception of 'enough money' this thread would not exist and a certain reporter in Balto would be searching for another great story. We all work storms across this great nation and hear the same thing from time to time: 'not enough money.' We deal with it; no chase for the Pulitzer, no congressional complaint, no rocket science required. My only flood experience is for one of the larger WYO's. When an insured cries 'not enough money' there is a 1-800 number to call for a review/ supplement process. It gets handled; contractors are met and the loss is, yes, adjusted on its merits.
So can someone please let me know how the rest of the claims are getting settled? Why are insureds complaining about a 'lowball' proof of loss? Doesn't everyone have a supplement process?
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"Isabel", is a Hot Potato headed behind?
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