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Gale
USA
231 Posts |
 Posted - 03/15/2004 : 01:04:23
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Well guys this issue may play out well for adjusters as Clayton indicated but it will mean the spot light is on all of us if the powers to be will look at the entire claims handling industry. I did see John tonight here tonight at the PLRB but it was in a group setting. In conversations tonight database issues were mentioned but not as in the news articles posted here. It was dealing with how one software package can ship to difference companies with different cost for the same line item for the same location.
Now for the first time the best I can tell we software vendors are being held accountable for the payout amounts making database prices a fact instead of a reference. Depending on how this plays out it could lead to high adjusting software cost to the entire industry. Regardless it will publicly raise the question of how databases are created and why there is no standardization for prices paid on the same street for the same materials and labor. Some of the statements on some software vendor’s website indicate “use us and lower your payout” is sure to peak the interest of reporters working this subject. With homeowners crying, adjusters openly offer to testify to carrier abuse of insures and the ton of other things post on the www it would take a year for a group of reporters to wade through and digest.
One of three things may happen. First being NOTHING. The second could be a total shake up from the carrier boardrooms right down to the last adjuster and supplier of adjusting tools. The third and more likely is a lot will be said over the next year and then everything will go back to “business as usual”. If the federal government gets involved in a real way it would either bring mainly red tape or real reform. Insurance commissioners that have to run for office may seize on this every election cycle to threaten the commissioner that did not stand up to the carriers and protect the little guys. Martha Stewart is going up to do time some think so it will be a victory for the little guys. Seriously this issue is a matter of concern to every player in the claims handling industry and could get out of hand leading to reaction instead of reform needed to protect the little guys from the big bad wolfs.
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Ghostbuster
476 Posts |
Posted - 03/15/2004 : 08:31:10
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Gale, all us Little Red Riding Hoods and Three Little Pigs know only too well about the Big Bad Wolves out here. And if it means castrating them thru the use of media scrutiny or government intrusion so we can protect our virtues and keep our houses from being blown down, here's the woodsman's ax.
This post is brought to you on this the 2004, Ides of March. On this day we commemorate the great betrayals of history and recoqnize the current examples that we must deal with ourselves. As adjusters, it is our function to be the point man for the carrier. We are the ones who first face the trip wires, booby traps, and ambushes of our trade. This we accept. Indeed, we thrive on the daily adventure of it all. That we go forth to do the good deed and save the day and seek the truth is at the heart of our souls. Call it the Valiant Knight on the Quest for the Holy Grail Syndrome. Then comes the betrayal...
It is the stab in the back from those who have sent us forth thru overstaffing, micro-managing, cost containment, expense shifting and off-shore out-sourcing. Who is the real foe of our noble heroic knight? The Dragon? Or, the suit with no face wielding the magic memo?
Given the choice of an honest opponet or betrayal, I'd just as soon sit down with the dragon and buy him a cold beer. |
Edited by - Ghostbuster on 03/15/2004 08:51:17 |
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whatco
USA
9 Posts |
Posted - 03/15/2004 : 11:37:17
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Well heck Gale, just "pass the buck" like everyone else does. We have all learned this stratedgy from the masters of deception; the great carriers.
Also be careful for, hopefully, the day will soon come when there are enough software vendors out there on approved lists to begin cutting each other's throats in the great American pursuit of competition and thereby making prices more competitive and affordable for us adjusters!!! |
Edited by - whatco on 03/15/2004 13:33:24 |
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trader
USA
236 Posts |
Posted - 03/15/2004 : 12:01:31
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| I believe I can locate a software engineer in McClain, Va. who can deliver a product that will subtract a modest fee $2.00- $3.00 for each electronic transferred file. No lease. Just like a bottle of beer... pay as you go no tabs. By the way gang the carriers can hold the line on the prices, BUT the estimate is only paper unless a willing workman agrees to the estimate. |
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Johnd
USA
110 Posts |
Posted - 03/15/2004 : 13:33:34
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Is the carrier dictating the price list? Ever considered placing a notation in the captioned report stating; "The attached estimate was prepared using price structures provided by XYZ Insurance Company." Then, of course you would want to add; "Copyright (c) 2004, Joe Adjuster"
Get Paid AND get your holdback! |
John Durham
sui cuique fingunt fortunam |
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whatco
USA
9 Posts |
Posted - 03/15/2004 : 13:39:46
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Trader, the trick is finding the major carriers who will use an alternate database. Most are settled in on the big three: Xactimate, Integra-DDS, & Simsol.
Gale, can you share with us which insurance companies are currently using PowerClaim?
It would be a shame that we be required to pay to sell other's products. We already pay for everything else then are forced to pay for company's clothing to advertise their businesses. Seems to me there is something wrong with that picture.???
Johnd, Insurance companies have always been dictating unit prices. They tell the contractors what prices to use (not the other way around as most think) who tell the estimating software companies what local pricing to use. However, just try and put in our estimates that the prices are supplied by the carriers and we would not be able to find work anywhere in this industry. I mean, do you really think that contractors whose overheads realistically run 24%-34% really want to just charge 10%? |
Edited by - whatco on 03/15/2004 13:49:47 |
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Johnd
USA
110 Posts |
Posted - 03/15/2004 : 15:29:32
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whatco
Read my post again...... I said put this statement in the CAPTIONED REPORT..... I did not say anything about contractors overhead percentages, where did you come up with that, or is this within your agenda?
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John Durham
sui cuique fingunt fortunam |
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whatco
USA
9 Posts |
Posted - 03/15/2004 : 20:27:00
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| There is no agenda as you would try and suggest. You are correct that you said nothing about contractor's overhead. I was simply making a blanket opinion about carriers dictating price lists. I just look at the bottom line of any estimate and take in to consideration all factors that add up to the final total; price lists and O&P. Though it feel just a little out of the parameters of your post, it was still somewhat related and just simply a comment. |
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kwsmith
10 Posts |
Posted - 03/15/2004 : 21:44:00
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| I'm a working adjuster and, other than wanting to see more accurate and realistic estimates, don't have any axe to grind- and i agree with whatco on the overhead. for decades we have customarily allowed 10 and 10, sometimes 10 on 10, for overhead and profit allowances. however, if you sit down and really break it out- which i doubt most claims people and an awful lot of contractors could do- that 10% overhead is usually an inadequate representation of what the true cost of overhead actually runs. but i don't think carriers are, and have always been, dictating unit prices- at least not arbitrarily so. when you dig down deep enough to get to the bottom of how prices are derived, there's usually a time/motion study underlying the number of hours allowed for a given operation, with the hours being multiplied by the local hourly wage and payroll burden- or at least theoretically so. those time motion studies/statistics are usually provided by governmental or industry studies and statistics. and some of of those hourly allowances are generous. typical example is comp roofing. i think most folks will agree that the standard time allowance is 1 hr per square to install 3 tab. but it's a phiss-poor roofer who takes that long to do it. if you want a real eye-opener on estimatics, go find one of the estimators for a mid-size to large commercial contractor. take him out to dinner and swap war stories. those guys usually keep their own statistics/costs analysis records from past jobs as guides to future estimates, and can show you the real numbers. might add that those guys sometimes sweat bullets to get it right- too low an estimate and they lose money, if not their jobs; too high an estimate, and they lose out to competitive bidding. it's a whole 'nuther world from writing insurance estimates. |
kwsmith |
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Gale
USA
231 Posts |
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whatco
USA
9 Posts |
Posted - 03/16/2004 : 08:07:11
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I do not have an ax to grind either. I used to love this industry and still do. My enjoyment comes from helping those who need it. But as a professional, I just get tired of watching so much "misrepresentation" going on and it appears to be in a downward spiral toward disaster. That is obvious by circumstances where we with experience are being replaced by those with no experience and youth.
I just feel there comes a time when any company should perhaps, backup and just check into the possibility that they could be wrong. I do not care if a contractor's overhead is 2%, 8%, 10% or 75%. What it is, is what it is and we should pay accordingly. Then maybe we could reduce unit prices if warranted.
For years contractors have been forced to take their Overhead out of unit pricing which relates into cheaper work being done on an insured's property which in turn creates problems. Then the insurance company just "passes the buck" by claiming the contractor should have known his business. I have known a lot of good companies in the past who allowed the insurance industry to lead them around by the perverbial "ring in their nose" until such day came when expenses caught up and they were forced into bankruptcy. Not just one of the two are to blame, but both are.
Leading contractors are contacted by software companies looking for local unit prices. When the contractor does not have the guts to tell the truth, then that is his/her fault. But at the same time, carriers will not use contractors if they do not work for the prices they want to use. And yes, carriers put pressure on contractors to stay with the lower unit prices if they want to stay in the ball game.
If someone does not step up to the plate and begin fixing our problems, then I could almost foresee the day when the federal government steps in to regulate our industry. Now that waves are being made in flood issues, well, we are starting to raise "red flags" that are being flown in the face of our government. And if enough complaints are raised, especially around election time (timing is everything), then something may have to give.
Of course if the federal government steps in to regulate, then perhaps that might help to address our "age discrimination" problem against older experienced adjusters.
As the search continues where insurance companies are looking for ways to cut costs, remember most smelly problems flush downward. And just guess where we adjusters live? We as the insurance industry need to just step back, make corrections, re-evaluate costs of doing business then make the adjustments in their proper categories.
But then we can always bring in construction companies from India and China to give us cheaper labor and unit pricing! Oh, why not adjusters as well so they can communicate in their language with their counterparts in the construction industry, then communicate back with the carrier's "desk" representatives also back in India or somewhere in another country. Where there is a will there is a way. (This comment is sure to draw fire from someone!)
However, another huge problem, possibly is the biggest of all, is whenever companies are Public (on Wall Street), then there comes a time when there is just no more profit that can be squeezed out. That is one huge reason cutting throats is in the works. Again, we live at the bottom.
I do not care what anyone says, this business is NOT like it used to be say, 10-20 years ago. It has gone downhill for good adjusters. And again, a lot of thanks go to Wall Street investors and the "bean counters".
INTERESTINGLY, I wrote this before reviewing Gale's article. This is a modification to this original post.
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Edited by - whatco on 03/16/2004 08:34:03 |
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ChuckDeaton
USA
373 Posts |
Posted - 03/16/2004 : 08:50:37
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| Once again we have wandered off course. Please, read the original post before posting. |
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Gale
USA
231 Posts |
Posted - 03/16/2004 : 09:28:39
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Thanks Chuck, indeed we have. Yesterday at our PLRB booth it was clear some of the carrier reps were very aware of the article in the original post on this thread from the way they talked and do expect it could be a subject that will be around for the next year because the finger pointing to the incorrect prices being used in the storm. This being in black and white gives everyone that is not happy with their checks a concrete excuse or reason to reopen their claims especially with the Beltway folks looking on.
Even NFIP has said they do not see a problem with prices but most expect perhaps some of a North Ridge type of fall out from the inital charges and those that may follow as more testify concerning the matter. |
Edited by - Gale on 03/16/2004 09:29:47 |
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aagreen
USA
3 Posts |
Posted - 03/16/2004 : 10:32:35
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Hello,
I'm the reporter who has been writing the Sun stories about the post-Isabel flood insurance issues. Thanks to all for your posts.
In case you haven't seen it, here's the latest:
http://www.baltimoresun.com/news/weather/hurricane/bal-md.flood16mar16,0,2089446.story?coll=bal-local-headlines
To clear up a few issues some of you have raised, yes, there's a lot of politics involved in this, though little of it has to do with our proximity to Washington and most of it on local rivalries too petty for you to care much about. And indeed, part of the issue here may be that Maryland floods so infrequently. This likely not only affects the expectations of the insureds but also the level of familiarity of those who sell the policies. Are these problems any different from those after any other flood or disaster? Maybe not. All I can say is, people here are upset, so I'm writing about it.
A few of you have called or e-mailed and discussed these issues with me, which I appreciate. So far, all thsoe I've talked to have declined to be quoted in the newspaper, which I understand, since your livelihood is at stake. However, I think you're on to something about the level of training and experience many of the adjusters have. The software and other such factors probably don't matter if you have an experienced adjuster, but if you don't, I would guess that person is more likely to be affected by such things and produce untenable estimates.
I mentioned the training issue to the head of the NFIP and the director of the claims division, and they got quite defensive, explaining how they put on x number of seminars a year for adjusters. But from what I've heard, these seminars aren't worth much.
I'd like to get some of these issues in the paper, but to do that, I need adjusters who are willing to be quoted by name. If that's unrealistic, perhaps someone could refer me to recently retired adjusters who are familiar with the issues and are less inhibited about talking. Again, please feel free to e-mail me or call 800-829-8000, x 2935, or 410-494-2935.
Thanks,
//AAG |
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LarryW
USA
126 Posts |
Posted - 03/16/2004 : 11:10:21
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| aagreen: You could attend one of the flood seminars. Only costs $10.00. |
Larry Wright |
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"Isabel", is a Hot Potato headed behind?
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