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Last Post 09/29/2012 9:56 PM by  CatAdjusterX
Base Service Charges vs Minimum Repairs
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pipercatadj
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01/29/2010 11:23 AM

    Just wanting some clarification...what actually are base service charges and minimum repairs and what dictates when to use one vs the other?

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    Joeblack
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    01/29/2010 5:27 PM

    A Base Service Charge (bsc) is a feature of Xactimate. It is one of those toggle on or off features that affects the unit prices and the bottom line of an estimate. If you use have "bsc" turned on, you would not use Minimum Charges (MN), and vice versa. And the unit prices change depending on which method you use.

     The insurance company you are working for dictates whether you should use it or not. Some carriers do not  care which method you use, but some carriers have guidelines about it and other things like O&P on material tax or not, etc.

    What I don't understand about Xactimate is why the unit price changes depending on whether you use a bsc or not. To me, the bottom line of an estimate should be the same no matter which method you use, but that is not the case, in my experience. In any case, whatever the client wants is what he gets, and if the client is happy I am happy.

    You have to be careful when using bsc to make sure that the system doesn't give a bsc where it is not needed. For instance, if you were writing an estimate using bsc and you had to detach and reset a grille on a heating and air supply duct. The line item price  would give you a few dollars for that operation, but then it would also give you a Heating and Air bsc, which could add another $100 or so to the estimate(whatever the bsc for HVC is). A contractor would not really need the bsc for that operation, so it should not be in the estimate. In that case, you would go into the bsc screen and "do not apply" that particular bsc.

    The bottom line is that we adjusters have to write an estimate that is "fair" to all parties: the insured, the carrier, and the contractor. No matter which estimating software we use, or how we have that software set up, as long as the estimate is "fair", we have done our job. (Of course, "fair" means different things to different people). 

     

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    claims_ray
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    01/29/2010 6:15 PM
    BSC on or not does not affect a minimum charge allowance and can be used together unless you are using a similar charge of the same catagory in the same estimate.
    I will also state that some Insurance Companies will want the BCS factored in and some will want it broken out if they are allowing it at all. Most of the Insurance Companies that I have worked for will not allow it to be used at all and some will only allow it to be used if the claim does not require or will not be using a GC charging O&P. This makes for some confusion and back and forth on some estimates.
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    BobH
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    01/30/2010 12:21 AM
    Posted By Phil on 29 Jan 2010 11:23 AM

    Just wanting some clarification...what actually are base service charges and minimum repairs and what dictates when to use one vs the other?

    You received some good answers - but should also see the Xm8 web site that has a detailed write-up on BSC's. 
     

    As others have said, some carriers don't allow them (and frankly most people still haven't figured out what they are - they appeared about 10 years ago & it's only Xm8 that has them).

    BSC's are NOT a minimum charge.  Min Chg will include some materials with the labor.  You can dig into the details of any Xm8 min chg and it will say how much drywall, how much roofing material & labor, etc.

    BSC's are simply a "trip charge" to get to the door, and the concept is that a small repair has no "economy of scale". 

    Others are right that some carriers have you nuke the BSCs but actually if they are not "broken out" as a separate service charge for the various trades, they are SUPPOSED TO BE factored-in so that the unit cost bumps up a little bit.  The white paper on Xm8 site explains it, and likely it is in the Help info on Xm8 as well.

    If you look at the details of any Min Chg in Xm8 (hit F8 or click on the picture) I believe it will comment on the BSC issue, and I don't believe you do both (it will say that the BSC should be "factored in").  I don't think a min-charge will kick in a BSC, and if it did it would be sort of like double-dipping.  As Claims-Ray said, you wouldn't have Min-chg and BSC "for the same category" (like painter, drywall, etc.) but you could have a roof min-chg and BSC's on the other trades if your carrier gives you that flexibility.

    If you want to allow for 16 Sf of drywall, no one is going to get out of bed for the unit cost per Sf, so you can allow the BSC (which will allow about 3 hours of drywall labor, usually kicks in about $230 on top of the small area of repair).

    Or write it differently as a Min-chge (1 Ea) which ignores how many SF but will allow for what you need.

    Bob H
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    Toddsclaims
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    06/22/2012 2:07 AM
    Insurance companies have the right to deny B.S.C, is there a way to make it up another way?
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    claims_ray
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    06/23/2012 8:32 AM
    Make what up? Did you incur BSC?
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    Jud G.
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    09/24/2012 10:41 PM
    Posted By claims_ray on 23 Jun 2012 08:32 AM
    Make what up? Did you incur BSC?

    The premise of your question indicates that you didn't read Bob Harvey's post about BSC's and still don't understand a lick about them.  Xactimate publishes the premise of such charges.  You probably don't have a problem with restricting the following codes from Xactimate estimates either:  DRY MASKSF, DRY MASKLF, WTR GRM, CON ROOM, CLN FINALR, CLN FINALC, DMO DUMP.

    These are all reflections of labor that is completed in order to complete satisfactory repairs.  When carriers start demanding discounts, they place barrier's around consumers' mindsets and their ability to acheive preloss condition.  When carriers issue payment based on estimates created on the premise of what they think the policyholder will really do, they expose themselves to bad faith.  This is more of an institutional scale as opposed to an abuse on a per claim basis.

    The premise of the earlier question inferring the need to 'make it up' indicates that the estimate was not sufficient.  Don't assume that he/she was trying to invent damages that do not exist.  Putting a drop cloth down is a necessary option for any painter.  Paying someone to clean up their mess after a job is another for any responsible tradesman.  Incurring a trip charge to travel to the loss site is another.  For Xactimate to arrive to a reasonable method of calculating the economies of scale for subsequent trips is a win-win method of embracing the spirit of compromise.

    For a carrier to make it a practice of removing such charges reflects on them as egregiously irresponsible.  Terms such as bad faith, theft, abuse of power, and greed fly through my mind when carriers behave this way.

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    claims_ray
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    09/25/2012 11:40 AM
    I simply asked the prior poster a question.

    The prior posters question did not reflect any information that would clarify the need for additional funds.

    I have no problem in following the Insurance carriers guidelines on how they want BSC applied. I would gladly apply BSC if the carrier would allow as it would likely reflect in my fee billing.

    If there is such an issue with BSC then why am I able to obtain agreed pricing for repairs with contractors without including BSC?

    If the repairs are able to be completed without BSC then where is the bad faith?
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    Jud G.
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    09/25/2012 9:50 PM

    Sorry claims ray.   I didn't mean to point my post directly at you; my intent was to direct it towards certain unnamed carriers who take the actions I discussed and develop them into a corporate practice.   This is a form of "institutional bad faith".

    You asked a valid question that is made when first interfacing with supplemental claims.   However, many re-inspectors assume that this is the only question that needs to be asked and close their file.   The angle I have trouble with is when carriers knowingly abstain from the inclusion of known damages/repairs within proposals.   The most famous example is when Allstate, years ago, reduced each of their estimates by one dollar on a national scale. After reducing tons of claims nationwide by one dollar, well you get the point.

    Today, it is a practice for some carriers to cajole their IA Firms to produce estimates quickly and at intentionally reduced GLA's because they know that most policyholders will not pursue an additional payment.  Their saving grace is the fee schedules that they produce as a sliding scale.  The premise of this fee schedule is nothing but a double-edged sword.

    The reason customers don't pursue additional payment is because it is a headache to call an office that infrequently returns phone calls.  It was a headache for the customer to answer scrutinizing questions from their own trusted agent who doubted they had a justifiable claim.  It was a headache for the customer to wait weeks for an adjuster to show up.  When the adjuster did show up, it was an untrained independent who had a false sense of confidence after passing his license exam and earning a cheeky, rubber-stamp certification.  The final response with hands in the air, "What a pain; I don't know who to trust".

    If the customer doesn't react this way and do in fact proceed with pursuing their claim, then the carrier sends out trained re-inspectors who ask a conflict-diffusing question, "What costs have you incurred so far?".  The real question that needs to be asked is, "What costs have you not incurred because of an emaciated estimate that was submitted by the first adjuster?"  Granted, the form of this question is naive, and better phrased as how may I assist you in such a way that you will be most satisfied with the resolution of this matter.  A listening ear and a plan with follow through usually does the trick. 

    My first hand experience of this is when a manager called to advise me to reduce my estimate so that their firm's average would not be the highest average out of the other firms producing estimates for that carrier. This manager could not find a reason to get my estimates cut because I took plenty of photos that documented my damages and I included too many F9 notes that justified the inclusion of line items that your average adjuster does not include. (I was criticized for producing estimates that included costs that the customer is owed). In the end, if a firm's average estimate was the highest, then that firm gets cut from further dispatched losses from that carrier.

    The crazy thing about this dilemma is that this same firm had another carrier I worked for. That other carrier liked my estimates because they were complete and my estimates kept their caseload from blossoming with supplements fouled with the odor of snarky customers.  However, this went against the grain of the vendor's wishes who catered to large volume carriers.  On principle, I chose to move on.

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    HuskerCat
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    09/26/2012 8:43 PM
    That was a very precise bold statement....and made for easy reading.
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    CatAdjusterX
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    09/29/2012 9:56 PM
    Posted By Jud G. on 25 Sep 2012 09:50 PM

    Sorry claims ray.   I didn't mean to point my post directly at you; my intent was to direct it towards certain unnamed carriers who take the actions I discussed and develop them into a corporate practice.   This is a form of "institutional bad faith".

    You asked a valid question that is made when first interfacing with supplemental claims.   However, many re-inspectors assume that this is the only question that needs to be asked and close their file.   The angle I have trouble with is when carriers knowingly abstain from the inclusion of known damages/repairs within proposals.   The most famous example is when Allstate, years ago, reduced each of their estimates by one dollar on a national scale. After reducing tons of claims nationwide by one dollar, well you get the point.

    Today, it is a practice for some carriers to cajole their IA Firms to produce estimates quickly and at intentionally reduced GLA's because they know that most policyholders will not pursue an additional payment.  Their saving grace is the fee schedules that they produce as a sliding scale.  The premise of this fee schedule is nothing but a double-edged sword.

    The reason customers don't pursue additional payment is because it is a headache to call an office that infrequently returns phone calls.  It was a headache for the customer to answer scrutinizing questions from their own trusted agent who doubted they had a justifiable claim.  It was a headache for the customer to wait weeks for an adjuster to show up.  When the adjuster did show up, it was an untrained independent who had a false sense of confidence after passing his license exam and earning a cheeky, rubber-stamp certification.  The final response with hands in the air, "What a pain; I don't know who to trust".

    If the customer doesn't react this way and do in fact proceed with pursuing their claim, then the carrier sends out trained re-inspectors who ask a conflict-diffusing question, "What costs have you incurred so far?".  The real question that needs to be asked is, "What costs have you not incurred because of an emaciated estimate that was submitted by the first adjuster?"  Granted, the form of this question is naive, and better phrased as how may I assist you in such a way that you will be most satisfied with the resolution of this matter.  A listening ear and a plan with follow through usually does the trick. 

    My first hand experience of this is when a manager called to advise me to reduce my estimate so that their firm's average would not be the highest average out of the other firms producing estimates for that carrier. This manager could not find a reason to get my estimates cut because I took plenty of photos that documented my damages and I included too many F9 notes that justified the inclusion of line items that your average adjuster does not include. (I was criticized for producing estimates that included costs that the customer is owed). In the end, if a firm's average estimate was the highest, then that firm gets cut from further dispatched losses from that carrier.

    The crazy thing about this dilemma is that this same firm had another carrier I worked for. That other carrier liked my estimates because they were complete and my estimates kept their caseload from blossoming with supplements fouled with the odor of snarky customers.  However, this went against the grain of the vendor's wishes who catered to large volume carriers.  On principle, I chose to move on.

    ........................................................................................

    Jud G,

    that move took cajones' and is a testament to your character and credibility as a claims adjusting professional

    "A good leader leads..... ..... but a great leader is followed !!" CatAdjusterX@gmail.com
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