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johnpostava
USA
35 Posts |
 Posted - 11/15/2002 : 08:31:46
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We have been approached to set up an inside (desk) adjusting unit for one of our clients. Adjusters would handle claims up to 5K over the phone. Tasks include writing estimates based on telephone interviews (SIMSOL has special software for this task) and reviewing IA and contractor estimates. Losses over 5K or ones that are questionable are assigned to field reps (staff adjusters) who send back their paperwork to you for payment.
We are still negotiating fees. Any thoughts? Be realistic for an 8-hour day. Adjusters pay own living expenses. Let's get some good ideas here - carriers are listening. |
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jlombardo
USA
212 Posts |
Posted - 11/15/2002 : 08:44:33
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| $450/day net to the adjuster.Company supplies computer loaded with the Special Simsol Software. |
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Newt
USA
657 Posts |
Posted - 11/15/2002 : 09:47:20
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I posted before I got the whole picture and had to delete and start over. A per diem schedule for the area, travel allowance to the area to be worked and a flat daily rate or hourly rate.
With or without the software figured in. In some areas the costs are more than double what they would be here in redneck city. Now, someone else figure the fees and remember the cost of a fair motel in Boston is over two hundred dollars and one here is less than one hundred for one night. |
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Todd_Summers
USA
69 Posts |
Posted - 11/15/2002 : 11:11:22
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John,
What kind of claims ? Property? Auto? Hail? Water? How long would the assignment be? Is it a 5 day work week or 6,7? Would it keep the adjuster from working the spring storm season? Or just get him/her through the winter?
Also interested in how the adjuster is going to write these estimates that are below 5K. Where will he/she get his/her measurements? An 18 square 3-tab roof is below 5K. Will the adjuster rely on the insureds and or contractors measurements as long as it is below 5K? How many hits are there per square? How will he/she determine the quality of materials to be replaced? Standard cabinets or Premium? 40 oz carpet or 55 oz ? Light texture to drywall? Heavy? Faux? Wallpaper grade? Tile grade? As you know a real adjuster that handles these questions and types of claims on a cat away from home while paying all of his/her living expenses will make 1K a day. Of course this is not based on an 8 hr work day (more like 10-14) And sometimes a majority of these claims are below 5K. I would think that the position could be filled for anything over $500 a day. Especially if you could find adjusters that already live near the "desk". Or , even better, since no inspection is required, why couldn't the adjuster work these claims from home? Heck, I would do it for $400 a day in that case (using either email or the carriers overnight account). If the carrier is worried about how much time you are actually working then pay the adjuster on a time and expense basis, and allow him to bill a certain amount of time for each task that is performed and documented in the log. The problem with this is when the adjuster has already closed the file and continues to receive calls that he can't bill for, which always happens with a few files. |
Edited by - Todd_Summers on 11/15/2002 11:19:29 |
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Todd_Summers
USA
69 Posts |
Posted - 11/15/2002 : 11:31:00
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Just another thought that I had to express...
There has been much hullabaloo on this site regarding some of the carriers trying to cut back on the adjusting expenses by going to these so-called telephone adjusters.
I am of the opinion, and have been trained this way, that the carrier has an obligation to investigate the claim thoroughly. I do not see how a complete and thorough investigation is possible without an inspection. It seems to me that the carriers that are moving in this direction are sticking their necks out to some degree. Perhaps they feel that the expenses they will save will outweigh the costs of lost litigation. |
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Newt
USA
657 Posts |
Posted - 11/15/2002 : 13:48:09
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| I CAN SEE LOTS OF NEW ROOFS! A lot of roofs will fall just under the 5k. This is just for CATS so it will put many cat adjusters behind the desk and staff will do the adjusting in the field if I understand this plan. The cat adjusters will handle the losses over the phone which are under 5K, that will eliminate the high dollar claims for IAs. No more large losses guys, thats the plan. That is probably just one carrier so who knows. |
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KileAnderson
USA
875 Posts |
Posted - 11/15/2002 : 13:57:48
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I think I speak for all adjusters that have been in this situation, but nothing is more frustrating than being handed a file that was partially worked, or attempted by a phone adjuster and then because of one issue or another had to be sent to the field for an inspection. Sometimes the phone adjuster just didn't "visualize" the situation correctly, or the insured did not know how to explain it correctly, or in some cases the insured saw this as his christmas club account and you are now in the rather akward situation of pointing out to the insured that the information they gave over the phone does not jive with what you are seeing ont he ground. Sometimes you run into situations where the phone adjuster has made commitments over the phone that you never would have done in person and because those commitments are logged in the file you now have to honor them and it's your signature on the check.
Either way, these cases are never pleasant and can in many cases be down right embarrassing because you are either appologizing on behalf of the company for mistakes made over the phone or you are trying to figure out a way to explain to the insured that what they told the adjuster over the phone is not the way it really is, in effect calling him a liar. The bottom line is, it may work sometimes, but when it goes bad, it goes really bad. I personally hate handling these kinds of claims. Just my oppinion. |
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Janice Toll
USA
40 Posts |
Posted - 11/15/2002 : 17:28:16
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John, I made a promise to myself after working inside a Miami office in the aftermath of "Andrew", that I would never do so again. If I were to break that promise, I certainly would not consider doing it for $450.00 per day. With the cost of temporarily living in some areas, and if working a five-day week, the living expenses could easily exceed half the income.
I don't think you could consider a flat day rate to cover all areas and from a five-day week to a seven-day week. I think a day rate, with the carrier paying motel expense and per-diem would work. With the carrier paying expenses, I would not consider working a desk job at less than $500.00 per day.
Being an outdoor-type gal, I suffer from the been-there, done-that syndrome when it comes to working a desk job. I would rather be out there working in the heat, rain, snow (or whatever our beloved Mother Nature throws our way) than sitting in an office, seeing nothing but the next cubicle, and breathing the same air as everyone else. Give me a one to twenty story rooftop. That's what makes me happy! |
Janice R. Martin-Toll |
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TomToll
USA
87 Posts |
Posted - 11/15/2002 : 17:42:59
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Lets look at this realistically.
Average Hotel bill 85.00 per day X 7 days= $595.00 per week.
Average Economy Weekly Suites + $400.00 to $450.00 per week*
Average Eating Per day, unless on a diet $16.80
X 7 = $117.60 $117.60 per week*
Fuel & maintenance average expense if 15 miles
or less from office. 30X.39= $11.70 per day
X 7= $81.90 per week , based on Gov’t per diem $81.90 per week*
Telephone calls to check on family $10.00 per week*
Cleaning or laundry bill per week $35.00 per week*
Weekly supply of Aleve or other items for stress $10.00 per week*
Total of * $704.50 per week Expenses
X 4= $2,818.00 per month
$450.00 per day @ 5 days day rate $2,250.00
X 4 = $9,000.00
less FICA - 720.00
Expenses - $2,818.00
Medical - $500.00
True income $4,962.00 Per Month
Mart Income 40 hour week @ 6.70 $335.00 X 4= $1,340.00
Restaurant waiter/waitress income 40 hour week
@2.25 per hour plus tips $670.00 per week X 4= $2,680.00
Aircraft Mechanic 40 hour week X $29.00 per
hour= $1,160.00 X 4= $4,460.00 $4,4640.00
Attorney income for bad faith, etc. $200.00 per
Hour X 40= $8,000.00 per week X 4 = $32,000.00 $32,000.00
No known expenses that are not added to bill
Usually has loopholes in IRS, so very little tax if any.
Obviously we are better off than a Mart employee, a little less than an Aircraft Mechanic, but, we all need to go back to college and get our law degrees. This is where the bucks are and the companies very seldom question lawyer’s fees, unlike questioning an adjusters estimate and fee bill. Oh, lets not forget the Insurance Company CEO’s at $200,000.00 per year. Wannabee a CEO.
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Tom Toll |
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Ghostbuster
476 Posts |
Posted - 11/15/2002 : 21:59:33
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John, are sure you REALLY want us to open up on this? You do know the carriers that visit here might get their delicate feelings hurt by reading this?
$500/day on a six day week used to be the going rate back in LA during the earthquake 9 years ago. But, that's a long time ago and life on the road didn't get cheaper. Used to be that the chicken fried steak at K-Bobs was $2.99. But, that was then, this is now.
Now...if you want us then the rate will be $500/day to us on a six day week, the carrier provides the lodging at the same place they put the insureds for long term ALE, and you provide the one way travel expenses.
We are your employees as you are now an employment service. In this status, working off a W-2 form, we share the FICA tax load. You provide the workers compensation. Also, as employees, we want a group health plan, and profit sharing, and free covered parking, and complimentery coffee and donuts. All this thanks to the friendly IR&S.
(Now for the repetitive and boring part.)
Folks...these are entirely realistic demands that reflect the new economic realities. And, if we were already organized into a trade association, all this would be a forgone conclusion. But, we ain't. So go ahead and drop your drawers, bend over and relax while the carriers do what they like to do best while the pimp vendors remind us that there are others waiting to take our place if we don't like it.
There, I said it. Go ahead and let loose with your moral indignation. |
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CCarr
Canada
1200 Posts |
Posted - 11/15/2002 : 22:48:20
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Well, this is quite interesting, I'll get close to the "hot stove"; and hopefully not get burned too badly.
John tells us this is a desk claims job, all "tools" supplied, handling small claims; with the inside adjuster paying their own way whether they live near or far from the office location.
Joe suggests $450/day net in the adjusters pocket. That is $56.29/hr (8hr day) or $2250. per 5 day week, or annualized at $117,000/year.
The discussion after that went right off topic (i.e. the question asked), until Janice and Tom commented.
The basic premise of my thought process is founded in the business principal that it is the "job function" that has a value, not the person fullfilling the function. This principal is echoed every time a vendor or carrier has claims work, and is common in other industries. We each, as independent contractors, have our own perception of value, but it is that usually of our own value. That value perception may tend to vary depending how busy we have been in the last 3 to 6 months, and how busy we may think we might be in the next 3 to 6 months. "Employers" can not allow that intangible to affect their determination of the value of the "job function", be it insurance, claims, or a french fry factory. Unfortunately, claims at this current time and for the past few years, are affected by market forces of supply and demand; there being too few claims in the big picture wanting to be done by too many people who hold themselves out as adjusters.
Professional HR people in any industry develop a job function value based on a point system, a fairly complicated process. This allows a price / wage range to emerge that has a minimum, median and maximum range to it.
I am not telling you anything you don't know by stating that there are thousands of "inside (desk) adjusting" people currently employed directly or indirectly by carriers. I have stated before that this is the current wave - this Call Center approach, and the potential for SIMSOL that John has told us about is just another example of that. All of this is just another part of my suggestion, now a year old, that "Cat adjusting as you know it, will be dead in 2 years".
I will suggest, that of the thousands working these "inside (desk) adjusting" functions, there likely is not 1% of them earning even 1/2 of $117,000, i.e. $58,500. The overall median range for this function is liekly much closer to $38 to $42K.
However, if a carrier wants to reach beyond hiring in the conventional way, done for many reasons, they will recognize that they have to pay a "premium". Beyond the conventional way means "engaging" the "contract" person, sourced through a service provider, not a hiring agency. Two factors contribute to that premium, the extra value of the contract type person, and the cost and profit the service provider must carry and achieve. The independent contract worker should command a minimum 20% premium above the median, while the service provider will likely look for a 15% premium to cover associated acquistion and handling costs plus some profit.
Therefore, the job function median value has escalated to $46 to 50K, for the independent contractor; or $52 to 58K including the service provider premium.
Because few, if any, independent contractors seem to live in sufficient numbers where these offices are located, consideration must be given to the costs associated with away from home living expenses. Many carriers don't want the hassle and paper work involved with per diems and other cost reimbursement systems. Generally, it is felt that a cost factor added based on a daily or weekly anticipated "wage" is the least cumbersome way to allocate this allowance. I have seen these allowances range from $50 to $100 per day, or $250 to $500 per week; all with no regard for continuing costs over the weekends while the office is normally closed. Carriers can not overly concern themselves with a person's cost of food consumption, or much of anything else, other than lodging costs. Without micro digesting this issue, I feel $400 to $600 per week is a fair range of allowance for living expense; based on the criteria normally used by carriers.
Therefore, the job function value now climbs to $67 to 71K (at $400 per week allowance) or $77 to 81K (at $600 per week allowance) annualized net for the adjuster, before the service provider costs and profit numbers.
Keeping with a per day (8hr/5day) figure, this produces a range from $258 to $312. all in, before service provider costs and profit numbers.
I doubt you will see the carrier go to $312 (adjuster net), likely in the $280 to $300 maximum range.
Based on the comments before me, you have all basically said you would not work for this "rate". All you have done is expressed that your perception of the job value is different, it is not really an expression of your individual value; but as an independent contractor you have said that you perceive the value differently. However, we all know, that whether it is John's contract he is trying to achieve, others before him and others after him doing the same; there will be more than sufficient numbers of people deemed qualified by the service provider and the carrier that will have decided that in their own calculation of value that this "inside (desk) adjsting" position is satisfactory at the time. |
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RJ
32 Posts |
Posted - 11/16/2002 : 08:58:38
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The problem with daily rates is everyone is forgetting that these are temporary assignments. They can last 2 days, 2 weeks, 2 months and so forth. There is not currently nor will there ever be a guaranteed commitment for the length of assignment. Why is this an important factor? Well for a number of reasons:
1. The daily rates are low. So an adjuster has to minimize his expenses while on assignment. Lodging is the largest factor of an adjuster’s on the road expenses. The most cost effective housing is an apartment. If you choose corporate housing you are not saving money. Most apartment complexes require a minimum of 3 to 6 month leases. A length of time that is next to impossible to get a guaranteed commitment from a carrier for.
2. Every one seems to forget about cost of living during the down time between assignments. When you are working (daily rates or by fee schedule) you have to make enough to pay continuing home expenses while on the road, on the road expenses and continuing home expenses while waiting at home for that next assignment.
With short term assignments at $500.00 a day for a five day week it is impossible to manage your finances without going broke. Everyone talks about how much you can make in six months or a year. That is find, however, seldom will a cat adjuster work on one assignment more that a couple of months (max).
Now lets talk about the real damages and hazzard of being a independent contract telephone adjuster. Have many of you ever hear the term “estoppel”? If not let me fill you in on the liability aspect that you as an independent adjuster (telephone or not) are exposing your E & O to. First of all this is a legal term used quite often in a court of law. In laymen’s terms whenever estoppel is used in a proceeding before a court and it is successfully applied you are prevented from using as a defense anything that the court has ruled in favor of.
Here is the kicker in what I am talking about.
If during the course of investigating a claim of damage by an insured an actual physical inspection and documentation of the damaged property is not undertaken by the insurer (claims adjuster) and a subsequental claim by the insured is made and denied by the carrier resulting in a lawsuit being filed by the insured, the carrier (independent contract adjuster) can be prohibited from using any evaluation of insured’s claim as a basis for denial. Therefore, making it difficult to nearly impossible to defend yourself in any litigation your are involved in. And to think all you are concerned about is if you can survive from day to day on that low daily rate. All it will take is one lawsuit and you could be out of business and loose your home. There is not a carrier in business to day that is not aware of this and if they can get you to telephone adjust their losses they not only save money they have successfully shifted a huge burden of potential liability away from them and onto the vendor and independent contract adjuster.
Good luck John in your venture into telephone adjusting. Here is wishing you all the luck in the world. As for this adjuster $2000.00 a day for 7 days a week with a year commitment would not be enough considering the liability exposure. All it would take is one lawsuit and the game is over.
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Newt
USA
657 Posts |
Posted - 11/16/2002 : 09:46:07
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There are too many unknowns out there on the dark side, even a two week assignment could end up costing you big time. This is without litigation. There has to be a commitment on both sides to get a fair deal. The vendor that must make a good judgement call on this or his neck is on the line. If the IA doesn't make a good return on his efforts, likewise the vendor also suffers a loss. The corporates are experimenting with our lively hood and their bottom line, in order to fix a system that isn't broken. Last time I looked, most of them were still making money.
I think the majority of adjusters are honorable people, do their utmost in obtaining fair settlements for all parties concerned, however there may be a few in all walks that are out to make it big for themselves, and thats where the vendor should be playing a major role.
If vendors take it on themselves to save the insurance company big bucks, they shoud be aware of who is going to foot the bill. If it is IAs, then it would also include their slice of the pie.
Or would it?
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Edited by - Newt on 11/16/2002 09:47:57 |
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Davey
USA
38 Posts |
Posted - 11/16/2002 : 10:12:15
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We are "very independent" independent contractors. Ghostbuster would have us organize a trade association that would further our collective goals. Hey guys, we can't even agree on what our "economic value" is. So far we have a swing from $312 to $2000 per day. If Jim thinks he can get $2000 a day and gets it, more power to him. Clayton's $312 per day is probably closer to what the carriers are willing to pay. I'm not going to work away from home for $312 per day. There are lots of adjusters that will work for that, especially when they've been home watching ESPN for months at a time.
John is not going to hire Clayton, Ghostbuster, Tom, Janice or me. He'll end up with whatever number of quasi adjusters he needs, at a low daily rate. Of those 20% will be good, 20% he'll send packing after a short time and the other 60% will be deemed adequate, but will get themeselves and Simsol in trouble.
The more time that passes, the more it seems that our "prophet of doom", Clayton, is not smokin funny ciggs, but is quite incitefull. I sure wish he was wrong. |
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CCarr
Canada
1200 Posts |
Posted - 11/16/2002 : 10:58:08
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RJ, you bring some good points to the table.
Because these types of call center assignments are temporary, that is the key factor in carriers using service providers to seek out the independent contractor; in addition to the cost benefits of not having any payroll burden costs or having to supply any normal "employee benefits".
Yes, downtime is a fact of life with our "type" of independent contracting; but it also exists for most if not all other types of I/C's. However, those that choose to hire I/C's have their own set of variables and problems to factor into their own cost structures and ultimate corporate survival; whether they be carriers or anyone else in our food chain or any other food chain. Downtime for I/C's is variable. It would be quite interesting to know what the average is per year for our sector. Even those that limit their work to storm calls, or a particular type of storm, would produce quite a variance; while others who have some other type of claims functions to supplement downtime likely may still have some type of overlapping variable downtime to that of the first group mentioned.
Because of my carrier background, I have been exposed to the call center function on both sides of the border, and on both sides of the "desk", off and on for over 4 years now and have followed this emerging trend quite closely. I can tell you it is here to stay and will grow larger, for many reasons.
Last year, this year, and prior to my first comments on this thread yesterday, I have talked with people at multinational carriers who have regional or national day claim or cat claim call centers. Your concern about the exposure for the I/C's E&O I feel is overstated.
There are two types of "employees" working for these CCs. First, the "employee" of the CC, regardless of sourcing method and inclusive of the I/C. Second, the I/C sourced by a service provider and positioned with the carrier CC, but as an employee of the service provider (the normal temp employee agency system). Either way, carriers clearly consider these people as employees, regardless of their term of 2 weeks, 2 months, or in some cases I know of I/C's well into their second year of continuous employment. As such, all these "employees" come under the liability "umbrella" of the employer; with only a very few exceptions with the second type stated where there is a contractual understanding of the liability exposure between the carrier and the service provider, accomplished through a contractual liability transfer.
Further, with regard to the carrier CC employer / employee relationship, each that I have spoke with over time all indoctrinate their employees in procedures, methods, etc.; both administrative and technical. The question has been asked of the carriers many times if the I/C "employees" should have their own E&O, and the answer from those I have discussed the issue with is NO; unless their is a contractual liability transfer from the carrier to the service provider regarding the I/C employee undertaking of their duties; and then the I/C should ask that question to the service provider. The I/C employees in the CCs are treated no different than day to day claims staff. They have defined authority that is graduated from zero to up to half of the CC small claims authority, depending on how the I/C evolves in the eye of the supervisors.
This is not a dark and secret issue, any I/C considering this route can ask the service provider about their liability exposure while working for a carrier in a carrier call center. Other than where a contractual liability transfer occurred between the carrier and the service provider, the answer will be that there is no need for their individual E&O. Where a contractual liability transfer occurred between the carrier and the service provider, the I/C must establish with the service provider if the I/C comes under the service provider E&O or not. |
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ALANJ
USA
159 Posts |
Posted - 11/16/2002 : 10:59:43
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In general bad faith has many elements. These elements vary from state to state. However, they all have one element in common, FAILURE TO INVESTIGATE. How can you avoid this pitfall while sitting behind the desk. I can hear some attorney now. How did you investigate this loss? Did you call Ms. Cleo. If you did call Ms. Cleo why didn't she tell you that you were going to get sued?
How can any defense attorney defend the Ms. Cleo way of adjusting? (Our, your, their defense attorney, it will be us swinging in the wind out there.) |
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Inside Adjusting during CATS
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