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Edward,

Next time you highlight some text, you might try using a different color. Real hard to read the highlighted part. This suit is pretty much old news filed by a lame duck AG and is in the same group as the other one he filed in August of 2007. In that one he filed a class action suit against every insurance carrier in the state of Louisiana alleging that they improperly paid wind damages, and paid no flood damages under the coverages, and therefore the Road Home Program had to pay the insureds. Last note I read on both of them is the new AG will look at them shortly after taking office to see if there is any merit to them or if they are worth going forward, so time will tell.

My apologies on the highlighted text.  That was a copy paste from some e-mail souce I just received this afternoon and felt the topic would warrant a good discussion on this forum, especially since I remember a similar thread going back quite a few pages.

I will see if I can edit the text color, otherwise, highlight the text with your mouse cursor to make it stand out.

Ed

edit:

I was unable to change the font color in the original post, but by highlighting the text in question, it stands out now for better readability.

Yeah - I would really have to disagree with the plaintiffs position. I just had a long site meeting with a contractor who was happy to use Xactimate to create a very, very large estimate for water damage repair based on a small amount of mold that was visible. It's all in the scope.

A green adjuster will overlook vital steps that need to be done, and a very sharp contractor using that same software can make your estimate grow like it was on steroids.  I'm using the same Xactimate that the contractor is - and lot's of contractors do use it.  The allegation that it is just an insurance-side software really shows the author's lack of research. 

Like an old violin, some people can really make it sing. It isn't the software's fault. Ed, if I was your adjuster on that other roof claim with all the layers, you would be done and happy - because I know we would see "eye to eye" on the scope. It's all about the correct description of repair steps, and allowing labor when warranted for the odd stuff that isn't in the database.

Bob, I am sure that any resonable adjuster and myself would have been able to come to an acceptable conclusion.  For that to occur, communication and returned e-mail messages and phone calls would have been required.

From what I see of the members on this forum, that would not have been an obstacle, whatsoever.

Now this I find quite interesting:

Meanwhile, the suit says that State Farm has testified under oath that it can modify Xactimate's price lists before adjusting claims. A pricing specialist conducts surveys building material suppliers for the latest prices and updated its New Orleans prices several times per quarter between 2005 and 2007. However, the suit says, a State Farm price list containing 10,000 different items was exactly the same as a Travelers price list on Nov. 15, 2005, something that would be "a statistical impossibility without collusion."

It had been mentioned to me previously by several adjusters here, that AllState has their own revised in house adjusted version of M & S/B software that they utilize for their convenience.  Now we know that StateFarm too has testified that they do this as well, and seemingly, so does Travellers.  Hmmm?  Does anybody see a pattern here? 

Isn't it extremely peculiar that the supposedly constantly updated items prices are in unison with each other on such a large number of fields?  If one is using a proprietary self adjusted system, then how would the other competitor have the exact same data?  This possibly could mean that when the software updates quarterly, that both entities suscribing to it, each receive the same revisions jointly though.  But it does seem odd in reflection to comments from people in the know, doesn't it?

Another point to be made, is that you can always find another contractor in a "Reverse Auction" to see who will lower their prices to what another party deems an acceptable dollar amount.  Why should any other party be allowed to state how much someone can charge, not knowing their specific overhead and burden figures and their desired profit margin.  Should someone else be able to tell you after you provided an adjusting service, that they found someone else that could or at least said that they could have done it for 2/3 of your charges?

I don't give a hill of beans about what the "Going Rate" is.  As far as I am concerned, the "Going Rate" is actually the "Going Out Of Business" rate.  Lets use the Department Of Labor generalized statistics regarding all small businesses as a whole.  They state that 80 % of all businesses go out of business within the first 5 years of existance.  During the next 5 year period of time, 80 % of the remainder of the original group observed also goes out of business.  That leaves a ridiculously low and absurd figure of only 4 % of all of the original businesses surviving after a full 10 year period of time.

Should I, or any other company who has paid their dues, (as in my case, this will be my 25th year in business), have to submit to being paid the same rate as a contractor who just started out? 

I don't price gouge, otherwise I would not have been in business in the same location under the same name for as long as I have, so therefor, shouldn't the price structure I charge automatically be considered fair and reasonable and legitimate?  How then, can a software and the multitudes of inept or lazy or company line, adjusters, be able to justify what any contractor can charge for their efforts, especially after a home owner, under no duress, made a conscious decision to award that contractor the job?

(P.S.  I am not trying to turn this topic into a format to re-state the previous circumstances which occured on the other job posted originally by me.  Lets leave this discussion independant of that one, unless some point needs to be made, using that as a readily available real world example.)

Now, as a final point to be made, when comparing contractors or rates charged from one to the other, what consideration is given to one who does not hire illegal labor or subcontract out all tasks to a sub who uses illegal labor, who therefor are not charging for the correct and justifiable legitimate amount of overhead including its bountiful burden amount?

If anyone thinks this is not the rule, rather than the exception, they are gravely mistaken.  I know my competitors and I know how much they charge.  For some and most of them to operate and still have profit left over for themselves, their is no way that they can be paying legitimately.  Now, a contractor who does play by the books gets penalized for doing so, because, "Other Contracors Will Do It Cheaper", or "That Is Not The Going Rate" that we have set aside for this task.

I will end on that note, since I probably typed too much for anyone to want to read the entire post anyways.  Sorry, I got caught up in the moment with a passion for doing things the right way and still surviving in spite of the adversarial competing bid scenarios I deal with on a continual basis.

Ed

Ed,

Considering the fact that the pricing data bases come from the estimating software company and doesn't originate from nor is created by the carrier, it doesn't seem unreasonable to me that any carrier/adjuster who utilizes a particular software would have the same pricing data base.  The pricing data bases are localized to particular areas, supposedly utilizing the costs of that local area.  And we all know about supply and demand; if items are in demand in a particular area one can count on the fact that the price will increase due to the demand, which would facilitate the need to update the data bases. This isn't exclusive of the building supply world, check the price of orange juice after a freeze in the area they are grown.  

Also, anyone using the software can amend or change the pricing by simply changing the price per item while creating the estimate. You can change it for that one estimate or change it globally within the program. 

Considering that there are limited companies that offer the service of the data base research for the pricing guides, I don't find it unusual that the pricing within different programs is similar or in fact identical.  The job of finding the costs locally for materials and labor would be exhaustive to say the least.  The ability to have local price guides in the estimating programs eliminates the need for every adjuster to call up each local building supply store and verify the costs of items such as plywood, 2x4's, Sheetrock, mud, etc, etc, etc.   

While I understand your frustration, I personally don't feel that this particular issue is representative of any collusion or price fixing.  When an adjuster creates an estimate they have the ability to change each line item, and there are far too many adjusters out there who created estimates that were not revised to believe that the thousands of estimates generated from those disasters were all changed at the carrier level to match prices. 

~M~

I think we can all agree that all of the major systems allow the adjuster to change pricing based on local conditions and other issues based on the specific claim and contractor involved.  The problem here is adjusters working for these carrier were told not to alter the databasesfor any reason.  These staff adjusters could only alter scopes of damage and add or delete line items as needed to make the numbers work out.

The suit does make for good reading even if it doesn't go anywhere.  Becuase all these carriers use the same software and databases and all the data is feed tp a company which provides data research to the insurance industry it does make one wonder.   If you ran an insurance company and knew what the other major companies were paying for construction items, what would you do?

If the estimating systems did not have prices that could be modified, the system would be useless. On the other side of the argument if each adjuster who worked catastrophe losses was able to modify the data base prices in the estimates and not leave this up to management, the estimate along with the "close on a one shot basis will not work." Nothing wrong with supplementing the original line item price. Done ever day.

All contractors who depend on insurance work seem to do very well. If a contractor does not agree with the  companys prices, just tell the Homeowner you have a hard time with the carrier's system and you would like to get an agreed cost before the work starts.

All contractors should be required to tattoo this on their forehead as part of the licensing process.

Bob, what about the contractor who does have an agreed to cost, "With The Home Owner" he has a contract with?

I guess to make that statement more precise and accurate, then you should state instead, to get an agreed to scope of work with the insurance company before the work starts, right?

Without going back to my original thread, what about when a contractor is seemingle led to believe that their is an agreed upon scope of work?

Does he now, after the fact and after he entered into a signed contract with a home owner have to be forced to change and lower his standard rates he charges, just because it doesn't jive with the software based estimate calculated by the adjuster?

The insurance company has no right to direct the insured in who they should be choosing for the contracted work necessary due to the insureable claim, do they?  They would have some legal liability if they did, I would presume.

I think it would border on either "Economic Interference With A Contract" or alternatively, "Direct Interference With A Contract" when they do so.

Also, as someone else previously stated, they made the claim that many restoration do quite well with insurance company pricing, which may or may not be true.  How many of those contractors go out of business with the time periods I mentioned in an earlier post?  It may seem profitable when the job is completed, but most contractors do not even know if they made any money until they complete their year end financials.

Just because a job can be done by someone else for cheaper, which then falls into the pricing structure of the software databases used by insurance companies, does not mean that the slightly higher priced contractor is over charging, does it?

Ed 

Edward,

I'd still consider the tattoo.........

ED. read the contract of insurance that you are trying to change, its on page 15 of the ISO Homeowners

H. Our Option

If we give you written notice within 30 days after we receive your signed, sworn proof of loss, we may repair or replace any part of the damaged property with material or property or property of like kind and quality.

Now this is never used; BUT it can be used just like the A Bomb . IF you don,t change your attitude about insurance work, just move on and just stay away from insurance work. You are slandering the good contractors who DO NOT want to change the status que, one once. And if you want to fight come to Houston and I will get one of the 50 insurance contractors I have known for 30 years to take us both to lunch and explain how the make a great living off of insurance work.

When a builder walks into the world of an insurance claim - it is a totally different animal than a typical "customer - contractor" relationship. The homeowner is not paying for the project out of his pocket, like a remodel. It is a whole different ballgame.

Some contractors like that world, as there is a house in every neighborhood that just had a water line burst - and the source of funding is pretty solid. Of course it is getting harder every day with rising exclusions, mold limits, and rising deductibles.

For those contractors that want to play that game, or that live in that world, they are used to getting an agreed repair figure with the Insurance company. That is really more important than getting an agreed figure with the homeowner. Once the homeowner pays his $1,000 deductible he is not the one to negotiate the cost of the project - it is the adjuster.

Your experience with the 3 Allstate adjusters is not normal, and I'm sorry it was such grief. If you had it to do over again, it would be 2 chapters:

1. Emergency board up - tarp of roof (even if framing is toast, temporary support so the tarps don't "pond")
2. Restoration, with agreed scope of the repair, and at what cost.

If the multiple layers were not all visible with a tree through the roof... then a supplement, and work stops till that is resolved. Otherwise you have no control. I almost worry more for the adjuster than you, he really put himself in a position of weakness not to resolve the scope and price before completion of repair. I think you will get your money, even if you have to file a lien or whatever.

From your other posts, it seemed like the adjuster was sort of leading you to believe that everything would be OK, and at what % Overhead & Profit.  But at the end of the day, there was no confirmation on the "base amount" of the value of repair, and the adjuster did not share his findings with you.  He did not bless your invoice with approval and settlement.  He did something directly with his insured, left you out of the loop, and that is where things went South.

Ray,

I am sorry you took this the wrong way.  I was pointing out in generalities about the amount of contractors and businesses in general who go out of business.

I do not have to change my attitude about insurance work, just the erroneous and misleading attitude of a major company and their adjuster, whether by diplomatic post job discussions or by legal resources.

Just because I do not solicit or chase insurance work, does not mean that I have not had experience with adjusters in the past.

Remember guys, there is no "How Does The Contractor Deal With The Insurance Adjuster" guide layed out from a neutral and unbiased source that I know of.  Each adjuster I have ever worked with in the past either agreed or disagreed by communicating with me. 

I am not at all inferring nor slandering companies whom have an established track record.  Totally the opposite is the truth.  More power to each and every one of your friend contractors who learned how the system is and work with the existing rules.

But, what are the rules?  If left open to interpretation and non-communicative, how is a contractor or home owner to be aware of their rights and their choices?  The darker and more obscure the unethical adjuster and the company backing that manner of play, then that would aoutomatically ensure additional profit and that would seem unjust on a regular basis.

It is not only your select long term contractors that provide the "Nation-Wide" average fees charged that I was referring to, but to average something out, you need to take into consideration the low-ballers who will obviously not remain in business very long. 

Ed

   Being a contractor I can state I have very little problem getting my price and getting paid. I am not a preffered vendor,don't need the nonsense

or the pay cut. A couple of years ago a good friend,who is an adjuster showed the proper way to write an estimate.

   On all line items we add a line note,referring to the IICRC/ANSI Standard of Care,explaining why we are performing a certain procedure

 or following a sizing protocol. I find most adjusters just want to know WHY we did a certain thing,not trying to deny us work.

 I find the biggest problem to be a lack of communication.......I try to get a walk through w/ the adjuster asap. Half the time we are finished with the job before the adjustor gets back to us. I send over our invoice,drying records,digital and thermal photos,Work Auth,Dirct Pay Auth,and

 Work Completion...........rarely a problem. Sometimes we run into an inexperienced adjuster who trys to deny a piece of

 eqpt.  I ask him to please sign a Release,if he wants to write the protocol and possible legal implications......never had anyone

 sign it yet. As far as pricing......these software programs are a guide only.........we all have a cost of doing business that needs to be satisfied.

 I never have a problem with getting paid...............my prices are fair,I don't charge 10 and 10 ( I don't need 20% to make a phone call)

  On the other hand,I have spent quite a bit of money going to Bolden's and DeWalds drying schools, Certifications in every major

 category and a ton of money every year on Commercial Pollution Ins.  We can agree/disagree on pricing,but nobody is writing

 my protocol unless they want to share liability............period.

Sounds like you know how to dry a house down, and we appreciate that.

I got a claim last week where the whole house was 2" deep in water when they got home from work. Agent told them to go to a hotel but "not to do anything until the adjuster authorized it". The homeowner wanted to call an emergency service contractor out of the phone book - but they were told to sit on their hands.

So the thing works it's way through New Years with people not at their desk... and if finally gets to me.

Yeah, I appreciate it when people aggressively dry a house down to mitigate damage. Hell of a lot better than than the alternative. Again, 2 chapters.
1. Dry and stable.   This is time and materials, you do what you gotta do.
2. Put it back together. In a perfect world, the adjuster walks the site and everyone is on the same sheet of music.

         Thanks Bob................What I hate MOST is the homeowner who gets me on the side and tells me "say this"or "say that".

 I politely tell them no............my credibility is on the line,as well as the fact i don't commit insurance fraud for anyone.

 I have worked too hard in this industry to do a "favor" for someone who forgets my name the minute I walk out the door.

 On a number of occasions I have called the adjuster to let them know the intent of the homeowner.

    I have an excellent reputation among agents and adjusters in my area. All my techs are WRT and ASD certified at a minimum.

   All have been through Jon Don's Value Added Service for Technicians class on "Handling the loss" how to treat the insured

 during stressful times as well as looking at our performance through the "customers eyeglasses".

   I see where adjusters are coming from as well..............one told me of a fax he received on a claim....1 page.....company info

 on the top,loss address and the best......................"Dried House $7500....NOTHING ELSE!!!!

   We as restorers are our own worst enemy. Most complain about expensive classes or expensive eqpt. and continue to run the

 business as a 1960's mom and pop. In this day and age that is not acceptable. I feel licensing should be mandatory to be in

  this industry.........too much exposure and loss of credibility with everyone with a shop vac calling themselves restorers.

Mike I knew someone would hit my hot button. Yes the water and smoke controctors are their worst enemy. Just remember I was around at the birth of mold claims and when the $50,000 and $5,000.00 limit on mold testing, remediation, tear out and rebuild because of mold is reduced to 0 ,I will have been around until the death. As I recall the contractors started the junk science on mold and smoke and will milk it until its not covered by insurance .

Direct damage has and always will be covered from named perils and the "questionable" language will no longer exist in any insurance contract. My job will be the "clerk of the works"to keep time and cost on you water suckers and the days of the adjusting programs spitting out "fair prices for line items and the unit prices"  {as per the national association of water suckers} will not longer be in use.

I guess Insurance companies will have to fall back on competant adjusters not to expose their mutual policyholders to health hazards and really take charge in these type of losses insted of abdicating their work to the white , green and lemon color van drivers. We will save billions if we do what we are paid for on regular losses.