Forums

A good topic. NFIP in the 70-80's used time and expense billing and it was unfair as big hard to work files would not justify 40 to 80 hours of billing. This is why they went to Fee billing and they also ran spread sheets and found many 40 hour days. The fee bill will always be the fair way to work catastrophe losses or any property losses as it rewards the good file work and the long hours, days away from home.

Legacy Files- old dog  auto liability claims that have not been resolved for months for some reason and take up file space and the adjusters calander. I have worked many of these type claims for one flat fee per claim #.

I've seen several articles like this one lately about carriers using audit services to control Independent adjuster fee bills similar to what many of us who have worked staff used going back to the mid 90's on attorney fee bill reviews:

http://www.emediawire.com/releases/...528938.htm

I'm sure it will go over with Independents much the same as it does with attorneys having someone who has never done the job telling you what is and is not a reasonable billing time frame you can use. The comments about Independent adjusters are in the last paragraph of that article. I don't think many adjusters would be agreeable to working time and expense billings subject to such restraints. Speaking of time and expense billings...how many would be willing to work on Citizens of FL 2007 fee schedule of $58.00 per hour on some losses?

There's absolutely nothing wrong with billing for a reasonable and customary amount of time on T&E files.  There are plenty of providers that have no problem with this method of billing.  The more experience an adjuster has, the better they are at improving their production.

That's all I will say about this topic.

The "Catch 22" of Time and Expense is this:

Presumably a less experienced and/or less efficient adjuster will take more time to do a task than would a more experienced and/or more efficient adjuster.  Therefore, on actual time and expense billing the services of the better adjuster costs less than the services of the lesser adjuster.  A corollary to this is that an experienced and efficient adjuster may very well expend less time than would be reflected in a fee billing.  As an example, the fee billing for a file with an estimate at $9,999.99 may bill for $700.00.  If the same file estimates to $10,000.01 the adjuster may very well add up his/her time and expense and arrive at a billing total of perhaps $550.00.  I can't count the number of times this has happened to me, that by being honest with the billing I shot myself in the foot.  The temptation is, of course, to take out two cents from the estimate and bill at the fee schedule.  The honest thing to do is to leave the two cents in the estimate and take a billing hit of $150.00.  This used to rub me the wrong way, and I would bemoan the cost of honesty.  Now I just accept it and move on to the next claim.  In these cases it is particularly chafing to have my fee bills reviewed.  I rejoice when the fee schedule says something like:  "Time and expense/ minimum $700.00". 

In order to avoid situations like the ones mentioned above, many vendors have a chart of "reasonable" times for the completion of tasks.  As long as the vendor and the carrier/client are in agreement with this method there is no problem with it.  All parties understand that the billing will be charged at certain rates for certain tasks.  This creates a situation where "billable hours" and real time hours may be divergent.  It does, however, reflect what time an average adjuster will take to perform a task.  A more effective adjuster will likely show more billable hours than the actual time spent, while a less effective adjuster will show less billable hours than actual time spent.  I have worked for firms that use this method, and see no problem with it, as long as it is understood to be the way time and expense is billed.  An expert adjuster working under such a system may well bill what looks to be exorbitant hours in the course of a given day.  The system, however, rewards adjusters based on their expertise. 

There are also several time components in file handling which are not billed directly in time and expense.  An adjuster who takes the time to create a careful log of the file cannot really bill for creation of their activity log.  The cost of getting lost on your way to the inspection and having to spend an hour figuring out where you went wrong and getting back to the insured location is an expense for which one cannot bill.  Some carriers are loathe to pay for the file set up.  The time taken to create the bill and follow up on payment is also not reflected in the time and expense billing.  Some carriers will not pay for sending faxes, sending letters, or the expenses of phone calls.  If it takes 15 minutes to input the data into the estimating program so one can begin to prepare the estimate, that should be part of the billing for estimate creation because the estimating program will not work until you input the claim data.  The best approach may often be using the concept of billable hours, but I still use actual hours unless there is an agreement to use a reasonable billable hours approach.  The acceptable billable hours should, however, be knowledge shared by all parties, not some secret scheme on the part of the vendor or the carrier (or an offshore fee reviewer/outsource).

I know some adjusters who talk for an hour every time they get you on the phone, but an hour long "Left Message"?  Really now!  Didn't take rocket science to cut that bill down did it?

Put on my examiners hat and reviewed (based on what oyu told us). Could justify 13 hours, but would have called the PA to confirm time at site.

From an examiner's point of view here is what the billing should have been, based on the description of the notes, estimate, etc.

rec loss and set up in integra, grid location and prepare to call insured..... 3.5 hrs -------------------------------------------------------------2.0
called atty and left message................................................................1.0 hr -------------------------------------------------------------------------------.1
called atty, spoke with receptionist .....................................................1.0 hr ------------------------------------------------------------------------------.2
called again, spoke with atty office, got PA's # .....................................1.0 hr----------------------------------------------------------------------------.2
called PA, left message to schedule appt to inspect................................1.0 hr -----------------------------------------------------------------------.2
contact made with PA, appt set for ---------...........................................1.0 hr -----------------------------------------------------------------------------.5
file on diary, sending status report. appt is next week.............................1.0 hr ("report" was a copy of his file notes) ----------------------.3
inspected loss with PA........................................................................5.0 hr (had detail on scope in notes) -------------------------------------2.0
reserve set.......................................................................................1.0 hr (same as 'report" above with a reserve inserted) ------------------.2
called carrier left message for coverage amouonts...................................1.0 hr ----------------------------------------------------------------------.1
began writing estimate.......................................................................5.0 hr ---------------------------------------------------------------------------------.5
reviewed and continued estimate and reporting.....................................5.0 hr --------------------------------------------------------------------------.5
completed estimate...........................................................................3.0 hr ----------------------------------------------------------------------------------.5
called PA, meft message to discuss estimate..........................................1.0 hr ------------------------------------------------------------------------.1
spoke with PA, rev est and dep and reached an agreement.....................1.0 hr (as per PA depo there never was an agreement)-----.4 
all requirements completed, submit closing for review..............................2.0 -------------------------------------------------------------------------1.5

Total is 9.3 hrs.  The work product speakd for itself.  The file, if properly documented and handled could be billed for more; however, from reviewing the wording in the notes this may still be too high. 

It appears the adjuster's time entries were creative to get to the number he had to justify to cover the flat fee amount of the tier below.  Steve's comments about T & E (minimum $700.00) and billable hours versus actual hours sums this delima up very well. 

Write down your start and stop time on everything related to a claim. Charge exactly what you put into it and you will be okay. Make the entries as soon as you finish your time. Don't put it off, as you may forget something you have done. I have always done this on T&E commercial files and make plenty of income.

I agree with Tom . Bill honestly and keep sound records of your activities . There are over 400 different tasks that can be inserted into a file to justify your charges. I'd be happy to share the list if you send me an e mail. Insofar as the fee audits conducted by carriers are concerned even the most experienced adjusters feel discomfort when some bureaucrat second guesses their fee. This armchair quaterbacking underlines the lack of trust and professionalism between the employer and those they have chosen to represent them. I will not work for a carrier that subjects my files to audit. If they don't trust me to be honest upfront why the heck are they hiring me in the first place. After thirty three years in this business it amazes me to see the fees being charged. Citizens offering $58.00 an hour on Time and Expense. Guess what skill level you get for that? The old adage you get what you pay for applies. Pay an adjuster properly and expect proper service. Seems a fairly simple equation to me .

Marc Dubois E.G.A.

marcd@kingston.net

On large commercial losses (over 100K) it seems many of the carriers will allow the adjusters to bill one hour for each $10,000 of the damage estimate. Take a flood loss of $500k  is 50 hours times the hourly rate and the NFIP rate is 2.1% of $500K is $10,500.  or $220.00 per hour. Take the fee bill ever time you can if you have the option. Not very many EGA's are getting anything near $220.00 per hour ; except the energy adjusters for the international firms.