| Author |
Message |
Cecelia
| | Posted on Sunday, January 30, 2000 - 3:04 pm: | |
This is in response to the DRP programs discussed in prior postings. I watched a DRP program as it was being rolled out in Sacramento by Farmers. The company is happy to provide a comprehensive service for the customer. The customer (who chooses this service) is happy to have to deal with only one entity (other than the staff adjuster). The contractor is, almost without fail, guaranteed the job (however large or small).
However, the contractors, in a way, ARE adjusting claims. If there is interior leakage from the ceiling (which is covered by Farmers in CA and TX regardless of the cause of entry)and there is no opening created by a named peril, the contractor will write the estimate only on the interior damage and not include the "incorrectly applied roof" or "roof having reached its maximum life expectancy". This would, of course, be the correct way to write the estimate. And the staff adjuster would like the contractor to be able to make determinations like this. The problem is that the contractor may tell the customer that the roof isn't covered because . . . (the above reasons or others). Here is where the contractor may be "adjusting" claims. This could be a gray area and may eventually be addressed by DOIs in various states where any given company has an unhappy customer.
Another problem that I noticed with the DRP program is that the contractors were, within a few days, overloaded. The ones I had spoken with reported that each estimator was only able to see an average of 5 houses per day. The contractors who asked to be cut off then limited the number of contractors available in any given area.
In my opinion, these programs will more adversely affect the local IA than CAT adjusters. But many CAT adjusters do local IA work between storms. So we are ALL affected to some degree. |
Property Adjuster
| | Posted on Saturday, January 29, 2000 - 5:44 pm: | |
Juan:
I see no problem with you working as a contractor off of estimates written by OTHER adjusters AFTER you are released from the storm. No conflicts exist there. There would only be conflicts if you wrote the estimate, or if you misled the customer, the agency or the insurer in some way. However, I do not feel that that is what you are contemplating.
Of course, the adjusting agency or the insurance carrier may see things differently. After all, some of those folks do think differently. So, be careful, but I advise that you should be upfront with your employer. If you want to work for them again, I suggest that you casually feel them out on this issue before proceeding.
I worked for large Insurers as a company adjuster in the past. These insurers would DEFINITELY TELL THE INDEPENDENT AGENCY that they do NOT WANT A PARTICULAR ADJUSTER WORKING THEIR CLAIMS. These companies get upset about various things, and they never pass on those concerns to the adjuster. Mostly because they solve the problem by never using that adjuster again. I am sure that many times, the adjuster never knew this. So, BE CAREFUL. And GOOD LUCK. |
THE PHANTOM
| | Posted on Saturday, January 29, 2000 - 3:56 pm: | |
I BELIEVE THE EASIEST WAY TO DECIDE IF YOU WANT TO ADJUST OR BE A CONTRACTOR IS TO TRY WHAT YOU ARE TALKING ABOUT. JUST THE IDEA REFLECTS THERE COULD EASILY BE A CONFLICT OF INTEREST AND I KNOW OF NO ONE THAT WOULD CARE TO INVESTIGATE IT. IF IT IS EVER KNOWN THAT YOU SET UP A CONSTRUCTION COMPANY WHERE YOU ARE WORKING AS AN ADJUSTER OR HAD BEEN WORKING AS AN ADJUSTER, THERE WOULD BE NO QUESTION TO INVESTIGATE IF YOU WERE NOT USED AS AN ADJUSTER. THIS IS THE ROUTE I WOULD TAKE AND I THINK THE ROUTE ANY GOOD BUSINESSMAN THAT MIGHT HIRE YOU WOULD TAKE.
GOOD LUCK!
GOT TO GO FLIP MY BURGERS AGAIN. |
Capitalist
| | Posted on Saturday, January 29, 2000 - 10:02 am: | |
In response to Juan David Casper's post, I've often wondered about setting up a roofing company like the ones that we've all seen chasing hail storms. If I were ethical about it and completely seperated my involvement in that business as an owner/investor (i.e. not taking an active part in it while on storm), would it be a conflict of interest? Would the carriers object if they became aware of it?
I don't believe that there would be a conflict of interest, and this could easily be verified by Reinspectors if they chose to investigate it. During reinspections, if they found that the adjuster did not refer or recommend his roofing company to the insured, then there would be no conflict. And the adjuster would also have to refrain from passing on any "inside" info onto the people actively participating in his company.
Does anyone have any thoughts on this? Having heard the stories about carriers blacklisting adjusters who have worked as PA's, this issue is of concern to me. |
Property Adjuster
| | Posted on Friday, January 28, 2000 - 2:33 pm: | |
I would not worry too much about contractors replacing adjusters. The insurance carriers, in an attempt to address expense and customer service issues, try different things from time to time. Everything cycles around. Most of the large companies which I am familiar with use contractors to write the estimate only if the Inside Adjuster or Examiner can sell the customer on using that contractor for the repairs. The percentage of contractor use by the larger players appear to be small...In many cases less that 5% to 10%. As you know, during a catastrophe, contractors are in short supply today. How do you think they will be able to replace adjusters in the claims process during a catastrophe?
I really feel that ALL Independent Adjusters need to do what the good Independents do. That is: (a) Be Knowledgeable. (b) Use that knowledge effectively. (c) Be customer friendly. Treat them like you would want to be treated. (d) Write a fair estimate... forget the fee schedule. Do what is right. (e) Learn what the carriers/agency require in the way of file documentation and meet those requirements every time.
If we do those things, the agency/carrier will call you back. I know that I am trying to do those things. I am not there as yet, but I am trying. |
Juan David Casper
| | Posted on Friday, January 28, 2000 - 10:35 am: | |
I have been an adjuster for three years but prior to that I was a general contracter.I have often wanted to work on the damage that other adjusters estimate on the storm site after the storm.Is this ethical are not,I mean the storm is over and I've been released from the storm.Have any of you guys been in this position. |
oldtimer
| | Posted on Friday, January 28, 2000 - 9:57 am: | |
There is a company up up here in sun(y) royal Canada which had a program of paid discounts from their designated contracts and repair shops. Strangly they were very up tight about what the financial benefits were called, thought we could think of a few words. |
Been There ....
| | Posted on Friday, January 28, 2000 - 8:17 am: | |
Martin - You're correct about possible conflict of interest but more so about contractor's liability. Historically, this scared the companies.
Today however the companies have had a change of heart. Many, if not all, Direct Repair Programs involve the company guaranteeing the repairs! The financial boys have decided that the savings in adjustment expense can offset the callbacks for unsatisfactory work.
There's a marketing angle to this too. There's some Market Research that asked Insureds: "Given the choice, would you rather us take care of all repairs or would you want the money to do it yourself?" (The question was a little more complicated than that.) Not surprisingly, most just wanted their house/life back the way it was before the damage. The companies see this as a way to save money AND deliver a service to their customers.
Don't mistake me. I'm not a direct repair fan. Just tryin' to say, "Been there ..." |
Martin Arguello
| | Posted on Friday, January 28, 2000 - 7:53 am: | |
Like many of you, I find this C-A-O program troubling. From the postings so far, it seems that it can be done legally because the claims are being reviewed by an adjuster.
However, there is another issue that hasn't been addressed but which may be worth considering. In my experience, the insurance companies have always had a list of contractors to hand out to insureds upon request. However, they are always very careful not to let us, the adjusters, "recommend" any contractors. I suppose that this is (1) because it might be viewed as some kind of conflict of interest and (2) because the insurance company wants to protect itself from a liability claim should the contractor's work not satisfy the insured.
Could any objections to the C-A-O program be raised with the above considerations in mind? It seems to me like the relationship here between the insurance company and the contractor can get uncomfortably close. |
Been There ....
| | Posted on Saturday, January 22, 2000 - 9:08 am: | |
I wouldn't worry too much about any direct repair program IN A CATASTROPHE. This includes CAO/PTC and Crawford's Prism. (BTW, there's no connection.)
DRP's save the insurance companies $$ from their precious Loss Adjustment Expense budgets. They may or may not cost them more on the indemnity side. Nevertheless, there are only so many "approved contractors" in each location. A storm would quickly exhaust this supply ... just as it does the supply of local independent adjusters.
Will a DRP affect availability of work to the IA working day to day claims? Yes. Will it affect catastrophe adjusters? No ... or at worst, so little that you'll not know it's there. |
Jim Flynt
| | Posted on Saturday, January 22, 2000 - 8:00 am: | |
Glen, the contractors working with the Contractors At Once program are not "adjusting" the claim. They are simply writing a scope of damages and then writing an estimate using unit pricing which has been pre-agreed with Travelers. The contractor then sends his estimate along with digital photos to the Travelers staff adjuster for approval. The contractor in making the repair is then making his profit. I would feel sure that somewhere in this process, that Travelers is inspecting at least some sample of these claims to test for accuracy of scope.
Further, since Travelers is assigning the inspection/scope directly to the pre-approved contractor under the CAO Program, the contractor really has very little "selling" to do. They have a virtual monopoly.
Like someone has said here already, I think the effect of this program is to take more work away from the independent adjusters out there than from Cat adjusters. |
Glen Garoutte
| | Posted on Saturday, January 22, 2000 - 6:50 am: | |
Well I guess that since Travelers isn't hiring independants, that Cjet probably lost a buttload of work. I don't believe this trend will go on long. The vast majority of the contractors will not be able to adapt to adjusting the claim and if they don't have a salesforce that is strong, adjusting claims for nothing.Give it some time as this is just another cycle in the madness of it all. |
Bill Richard
| | Posted on Friday, January 21, 2000 - 5:31 pm: | |
Oldtimer, if what you were trying to say was that this industry is cyclical than I understand. What goes around usually comes around. As for the comment “You CAT people”. As a matter of fact, many of us are “cat people”, “branch assist people”, “appraisal people”, and “consultant people” and have a very diverse background with many capabilities. That being said, “You CAT people” does not offend me. |
oldtimer
| | Posted on Friday, January 21, 2000 - 1:44 pm: | |
If no one complains then the contractors will "adjust" claims. Fortunately it is self correcting over a period of time. The contracts get greedy, $100 here, $250 there, estimates are flexible. Then someone wakes up and asks where are the adjusters. Fortunately, due to the high level of integrity in the companies we know the contractors will be judged on their work. (who has ever heard of a plane load of claims managers getting a free weekend in vegas, things like that just don't happen.) This is more likely to inpact the Independent adjusters rather then you cat people. |
Jim Flynt
| | Posted on Friday, January 21, 2000 - 11:26 am: | |
Bill, what Travelers says is that their staff adjuster is the "adjuster" and the one who "adjusts" the loss. I can see no problem with a contractor inspecting a loss and writing a damage repair estimate; that happens all of the time with independent contractors as well. That would fall outside of the NC Insurance Commissioner's definitions of the function of adjusting. To read the law otherwise, would be to expose a neighbor, friend or family member of an insured or a spouse of an adjuster who rides along who "inspected" or "examined" a loss to be guilty of a misdemeanor violation of law as well.
Admittedly, this is a gray area and the carrier and contractor may well be operating within a very fine line of legality.
Perhaps, the contractor might need a contractor's license in the particular states in which he operates in order to perform the repair work.
Just to be on the safe side with this answer though, I have today sent a letter of inquiry with regard to this situation to the NC Insurance Commissioner's Office seeking their comment, and I will post their response here when received. |
Bill Richard
| | Posted on Friday, January 21, 2000 - 11:05 am: | |
Please correct me if I am wrong, but I see some limitations to the “CAO” program in states where licensing is required. Take for instance the state of NC. The law Insurance Law “G.S. 58-3-130” basically states in part that anyone who is not licensed through the DOI that acts as a “principal, agent, broker, limited representative, adjuster or motor vehicle damage appraiser; solicits, examines or inspects any risk; adjusts, or aids in adjusting any loss;" ……. Etc……. Is considered guilty of a class 1 misdemeanor. I welcome any comments or discussion on this point. |
Jim Flynt
| | Posted on Friday, January 21, 2000 - 9:37 am: | |
What I learned from a phone call to Travelers Insurance this morning:
This morning due to the overwhelming response to the post by REALISTIC, I got on the telephone to Travelers Homeowners Claims reporting (800-252-4633) and talked with "Mrya" about the "Contractors At Once" program which Travelers has instituted. I would like to share what I learned:
Travelers began the Contractors At Once Program in February 1999 and it is now in place around the US with additional contractors still being added.
The CAO program is indeed managed by PTC of Atlanta, although Myra could not tell me anything about PTC (she didn't know). She was located in Atlanta where my phone call was being answered BTW.
Their recorded message on hold advised the listener to "ask about the Contractors At Once Program." It went on to say, "this is a new service option for homeowner's and small business" and concluded with "It's a real help, not just a check."
Under the CAO Program, a Travelers insured may use any contractor of his choice. If he utilizes the CAO Program, a pre-screened contractor will set an appointment and make an inspection within 48 hours. If it is an "emergency claim," the insured will be contacted within an hour and a contractor will be at the risk within 4 hours.
The contractor writes an estimate using pre-agreed unit pricing and takes digital photographs which are then forwarded on to a Travelers staff adjuster for "approval."
Travelers advises that this program has "worked very well" and that their surveys "indicate that our insureds are happy with this program."
Finally, as is the case with looking at financial data from insurance companies, most of the larger carriers have untold numbers of affiliates and subsidiaries, and Traveler's is no exception. Travelers is part of the Citicorp/Travelers Group which is owned by Citicorp (Bank) and the umbrella company includes Citibank, Travelers, Saloman Smith Barney, Commercial Credit (now called Citi Financial), and Primerica. Travelers also absorbed the old Aetna P&C. With the resources of Citibank, obviously a purchase of Allstate is not out of the question.
My earlier post only included a comparison of the financials of Travelers Insurance Company versus Allstate Insurance Company, which could lead to misleading conclusions. Based on insurance alone, Allstate is still the larger carrier both in written premium and policy holder's surplus; but having a large multi-national bank as a partner never hurts.
Travelers is the 3rd largest COMMERCIAL insurance carrier (commercial policy writer) in the United States.
Allstate is the 2nd largest INSURANCE carrier in the US.
Both Allstate and Travelers are rated "AA" by Standard and Poors.
Their (Travelers) gross premium of $4,614 Billion for 1998 included $1,436 (Billion) for commercial multi-peril and $281 (Million) for property. The remainder of premium was for worker's comp ($1,179 Billion), commercial auto (($781 Million), General Liability ($539 Million), Fidelity & Surety ($209 Million), and Other ($189 Million).
My apologies to all, and especially REALISTIC, for MY misinformation, and 10 lashes with a wet noodle for me. Thanks for setting me straight. |
Tom Joyce
| | Posted on Friday, January 21, 2000 - 8:30 am: | |
Is PTC the same as Prism (Prizm?) the firm that Crawford owns? |
REALISTIC
| | Posted on Friday, January 21, 2000 - 6:08 am: | |
Mr.Flynt,
I am protecting my name because I recieved this info from a very reliable source inside Travelers that is over Three of these regions. You might not know who I am but don't judge a person just because they don't post their name. I do know that Travelers will buy a big carrier or two small carriers this year. Not only is this gentleman high up in Travelers, but his wife is a top exec. also. Its a sad thing that we are being pushed out of a tremondous amout of work out there that we have all worked our butts off for to see a contractor take it away from us. Like I said in my previous post an organized effort doesn't sound so bad after all . Can you imagine the independants having to go and work for a contractor because the independant side has dried up. The vendors out there will be out of business just like we will. |
REALISTIC
| | Posted on Friday, January 21, 2000 - 5:43 am: | |
I found out last night that a company called PTC out of Atlanta is running this program for Travelers. They are also talking to Allstate and Nationwide about the program. If this trend continues we could all be in a deep hole. I guess an organized effort isn't sounding so bad after all huh. My informant told me that PTC out of Atlanta is making the contractor buy their own software and will assist them in training on it. |
Ric Vitiello
| | Posted on Friday, January 21, 2000 - 1:45 am: | |
I can tell you from recent personal Travelers experience that the Contractors-@-once program is in place. |
stormcrow
| | Posted on Friday, January 21, 2000 - 12:14 am: | |
Who owns travellers EDS? They could afford an Allstate
The problem of using contractors and property replacement specialists firms as adjusters is not new and is common where I live.
The independents are afraid to stand up to this because the are afraid of losing what they have left.
As we know they is only one loser the Insured.
The regulators must be pushed to stop this and protect the public, and the independent adjusters. |
Tom Joyce
| | Posted on Thursday, January 20, 2000 - 11:38 pm: | |
Over the last two years I have worked with Travelers on several occasions in the same area. They were implementing a program in which the contractor was sent as the representative of Travelers to handle the inspection and estimate with the paper work sent to the adjuster for processing. As I worked in the same area on and off over a 9 month period you could see a definate trend of price increases with no similiar related cost increases. Contractors could not justify the increase except to say that what everone else is "now" charging. The Travelers adjusters had no time to dispute due to enormous workloads. These contractors were those on the "approved contractor list".
I guess then there are 33 states with licensing requirements according to above post. If the contractors are adjusting which I found was often the case, then should they not be subject to the same requirements as we. They are independant contractors and not employees of the insurance company. |
Jim Flynt
| | Posted on Thursday, January 20, 2000 - 10:50 pm: | |
It seems to me that before we accept the post of REALISTIC as anything other than unfounded hearsay, we should look more closely at what he says:
He mentions that Travelers has already started this program in 7 Regions and is going to be "nationwide" by the end of the year. A cursory glance at Traveler's website for claims information will advise the reader that Travelers breaks the US into only 7 regions.
Secondly, the information regarding the purchase of Allstate by Travelers goes against the grain of common business finance practice (small fish buying the big fish).
Finally, we do not know the name or position of the "gentleman" from Travelers, and as far as that goes, we don't even know who REALISTIC really is.
Finally, not every state has adjuster licensing (17 states plus the District of Columbia don't) and most, if not all, states allow carrier employees to be exempt from state adjuster licensing as long as they are employed under the supervision of a licensed adjuster.
Would you not think that a company with $3.5+ (Billion) in annual sales would have their legal department review operating procdures for such a program as Contractors at Once to make sure it met the legal requirements of the various states in which Travelers operates, such as to make sure the contractors are either licensed if required or otherwise exempt?
Finally, having spent 5 months last year handling a significant number of Travelers claims while on assignment, this is the first time that I have heard of a "preferred" contractor program such as the one suggested.
We do need to check our facts before we go around spreading baseless rumors and the ever present useless gossip out there.
Has anyone out there heard of the Contractors at Once program? |
Gale Hawkins
| | Posted on Thursday, January 20, 2000 - 10:25 pm: | |
I guess the contractors are not complaining about getting to set their own wages. Looks like only one party could some up loser in this situation and it will not be the contractor or homeowner. Did he say how they came up with the name, CONTRACTORS AT ONCE? |
Paladin
| | Posted on Thursday, January 20, 2000 - 10:17 pm: | |
Until the states start to enforce licensing requirements the carriers are going to continue down this road. That is until they start to reinspect the contractors. |
Jim Flynt
| | Posted on Thursday, January 20, 2000 - 10:15 pm: | |
Realistic, a check with Standard and Poor's Insurance Rating Service shows that Allstate is the 2nd Largest Personal Lines insurer in the United States. Their annual premium income is approximately 6 times greater than that of Travelers and their net worth (Policy Holder's Surplus) is approximately 2 1/2 times greater than Traveler's. On first glance, a Traveler's purchase of Allstate would be a case of the little fish eating the big fish. Both companies are licensed to write and sell insurance in all 50 states.
For those who would like to monitor either company, company news, and news releases, here are their respective websites:
(http://www.allstate.com )
(http://www.travlers.com )
NOTE: Financial information is for the years 1997 and 1998 (the last years available with S&P.) |
REALISTIC
| | Posted on Thursday, January 20, 2000 - 8:36 pm: | |
I had talked to a gentleman today at Travelers Ins. I was inquiring about an adjusters position and he told me that they were implementing a program called CONTRACTORS AT ONCE. His comment was that they were doing away with independants and were going to start letting contractors do the adjustments. While I was in conversation with him I asked if there was any truth to them buying Allstate. His comment was no comment but that they were going to buy one large carrier this year or two smaller ones. Does anyone out there know of any info on this and if they do would they comment. I do know that Travelers has already started this program in seven regions and says that it will be nationwide by the end of the year. |
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