Hi All , Had a call from an insurance co. this week looking for contractors to do claim repairs. I have never worked directly with insurance companys before are there any thoughts,questions I should look into before I call them back. thanks Mike
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They pay is the good news.
Check on the payment timeline.
Edited 5/4/2004 11:30 am ET by rez
Things to find out from this adjuster - are you doing work and getting paid based on your bid, or are you doing the work based on what they think the job is worth. Inevitably, you will discover things in the course of your repairs that were unseen/unknown. If the adjuster is determining the scope of work rather than you, that can be problematic. Understanding adjusters realise things come up, and the cost will rise. But better to flesh that out. And yes, payment schedule. If I give you an invoice that says net 10, does that mean net 60 to you? Matching vs. similar - Ive run into this. I can't get that crown molding anymore unless I have someone go cut knives for it, so your estimated material cost of $2/ft isn't going to be realistic. And for the 20 feet that need to be replaced, the $150 for knives and $75 for setup, and $100 for minimum order makes that pricey crown. You want to go with that or talk the homeowner into something close and available. A lot of it is being clear ahead of time whose job it is and who gets to make the decisions as to what is right. If I don't get to be boss, I don't do the work.
"If you pick up a starving dog and make him prosperous, he will not bite you. This is the principal difference between a dog and a man." - Mark Twain
I used to be a claim rep for a major insurer based in the midwest. Although most adjustters think they know more then they actually know - they are understanding about problems that arise, unexpected costs, etc. as other folks have mentioned
The main issue that inevitably arises when an insured, who has suffereed a loss, has repairs done (and paid for by the Company) - is the concept of matching vs. similiar, as RW pointed out. Most folks have policies that state that the insurace company only owes for like kind and quality. Unlike auto claims where people scream abotu used parts or OEM - for the most part sheetrock is sheetrock, etc. so there isnt much of a problem. Get the scope of work clear from the beginign - and let the adjuster explain to the homeowner why you are installing paint grade trim instead of stain grade oak.
There is also the issue of putting things back the way they were - versus taking the opportunity to upgrade. Although adjusters are fine with an insured kicking in diffrence for better grade trim, etc - they want to make sure the Company ins't paying for it.
Adjusters also hate the concept of "covering your deductible" that contractors often sell to the insured. There is no better way to have your job slowed to a grinding halt then an angry adjuster who has all day to pour over your estimate and price check your material costs and labor rates.
The homeowner can also be an unknown factor. It sounds a little crass - but a total loss house fire is (although a hard day) just another day at the office for the adjuster - and a major life event for the homeowner. It can sometimes be hard workign with a homeowner who has experienced such a mjor trauma. Your heart goes out to them - but it doesnt make the reality of the situation any better.
All that being said - for the most part payment shouldnt be a problem.
The adjuster usually has a lot of controll of the timing of payments, and approval of estimates/revisions - so getting on his good side always makes the process smoother.
If it were me - I would do it. You know they will pay, they have enough money to pay for the job required and they can be a great source of work.
Hope this helps.
Frank,
Great reply, I hope others aren't offended when I try to hijack this thread.. It would seem that for someone to get an idea of budgets he should talk to a knowlegdable claims adjuster..
It would seem that he has a fairly good handle on the cost of things. (from an unbiased perspective)
Also what about the exceptions....
I mean I own a timberframe house and I'm trying to find insurance for it.. I doubt there are enough of them around for anyone to have a good idea of the costs involved..
Is there a source for the special house, historic value / log home / timberframe / metal construction / ICF construction / SIP contruction / haybale/ rammed earth, etc?
snip >>>>
so - long story short - there may be a policy for you at a "normal" insurance carrier - but if not - your timberframe is not so far from the norm that a good broker (who represents many carriers) should be able to find a match for you. I emailed this to you because of the length - i will be happy to post should anyone want the gory details...
Is there a source for the special house, historic value / log home / timberframe / metal construction / ICF construction / SIP contruction / haybale/ rammed earth, etc?
I honestly don't know. We do valuations for unusual buildings, but I don't think we've done a SIPS Timberframe. Why don't you call a Timberframe company and give them general specs on your place and ask for a ballpark rebuild cost. Todd Benson's company could do it for you. We charge a fee for the work, but it really could be worth it.
The other thing to consider is to get a policy that doesn't have a defined upper limit for the rebuild. Many good companies like Chubb will sell a policy like this. There is an upper number used to help determine the cost of the policy, but at time of total loss, the structure is rebuilt at whatever the cost may be. Setting that number could be done by the agent with help from you or an ouside source. Suggest that the broker pay a fee to have a replacement cost analysis done. Sometimes they have corporate people to do it. Sometimes they use the Marshall-Swift guide.
Judging from the photos I have seen, $350 per sq. ft. would be a good starting point.
How does that grab you ?
carpenter in transition
Way more than I have in it, but then my labor is free isn't it?
I suspect that my actual cost is somewhere less than $70 a sq.ft.
I don't go after insurance work but sometimes good customers want me to do the work when they have a loss.
My personal favorite was when an adjuster allowed $16.00 for the removal and disposal of 384 cubic feet of wet blown in insulation with a head room of 30" and less and attic access was at the other end of the house (rancher) easy 30' away.
I offered to sub it out to the adjuster for the exorbinate fee of $25.00 and he declined....go figure.
Hope this helps...good luck.
This is exactly the kind of thing I am talking about.
The insurance industry looks for ways to cut costs.
A software company writes software geared toward writing insurance repair estimates with built in unit costs.
The software company markets the product selling it as a cost savings tool and the insurance industry spends megabucks on it. They now must justify the purchase by putting it to use and proving it can work.
Many of the unit prices in these databases are ludicrous. Some adjusters know this. Many do not. They will tell you, "This is what the computer says and that's it." or even better, "This is what the computer says and we get people to do it for these prices all the time. " We have found that the "people" that they are talking about are the homeowners who don't know better and they do it themselves, or they are the uninsured pickup truck contractors.
I have so many stories to tell like your insulation story, I could write a book. My most recent one:
10' x 10' cement plaster ceiling on exterior porch needs to be removed and replaced due to access to above.
remove and replace cement plaster, remove and replace wire lath, remove and replace 40 lin ft 1/2" square edge casing, ( for plaster ) remove and replace 1/2" plywood sheathing, protect entire bluestone front porch, carry debris to truck and get rid of it.
how many of you could do this for $384.00 ?
the adjuster told me we should.........
carpenter in transition
Every person who has an experiance like that always complains bitterly to their head office. People just love to prove other people wrong.. If there is enough complaints like yours the system slowly is revised..
Is it perfect? Far from it, It was pre laptop days and will be post laptop days..
I wonder where in IT land they have someone who evaluates the effectiveness of systems.. Trust me, anytime a major corporation spends mega bucks on anything they document it's effectiveness..
My little story, I sold industrial forklifts for a decade or so and was amazed at the loyaty of major fortune 500 companies to my product..
I knew it wasn't my smooth salesmanship because at times I felt more like an order taker than a salesman.
I found out from one buyer (the day they canned him) that the reason they kept buying my product was that my operating costs were 3.3 cents per hour lower than my competitors machine..
I had sweat bullets on each deal making certain that the quote was just perfect and proper etc. I'd always had my best suit cleaned for each presentation etc.. in the end it was 3.3 cents..
No, it sure isn't free at all. If you are saying that your material costs are $70 psf, on an unusual structure, your labor costs could easily be $150 psf.
carpenter in transition
Thank you Tim,
It's interesting to try to understand my value. My wife thinks I'm worthless as does both of my daughters, well maybe my oldest has a slight inkling of my value since she's going to college on my dime.. ;-)
Worthless ? Tough cookie.....
I hope it never takes major fire for an insurance adjuster to put a value on your work.
Normally, she finds out when you sell the place.
carpenter in transition
Our goal or ambition is to build something our children want to live in, thus rather than going out and renting apartments and such they will stay at home and keep an eye on the old folks. (their reward will be a home free and clear upon our death)..
Think about that, isn't your major expense a house payment? Hasn't housing been your major expense all of your adult life?
This house will have enough space so they will feel comfortable and as they become adults they are free to live as they see fit. (in otherwords if our daughter should choose to have someone move in with her, it'll be her decision)
By not having the burden of a house payment think of what they will be able to do with their lives..
It's done elsewhere in the world all of the time. I fail to see the need to do as most Americans do and move every 5 years. Plus when I get old enough farm me out to senior citizens dieing home.. (where the cost of keeping track of me eliminates any legacy to pass down to my children).
Frank. Real good to hear the story from the other side of the fence. I'd do it too. I have not had bad luck at all with insurance adjusters, but you know. The horror stories are out there and invariably skewed from the perspective of the teller. I think the conflicts that arise always make me more nervous since there's a 3rd party involved, and my preference is definately in favor of being in total control and working that kind of thing out with the HO on all other jobs. Your point about getting to know the adjuster is also good. I don't feel like I have to go to lunch with anyone, just having a face and a name and a five minute conversation all match up in my head makes life easier."If you pick up a starving dog and make him prosperous, he will not bite you. This is the principal difference between a dog and a man." - Mark Twain
I think you are right on.
There is a fine line to walk between getting to know and adjuster and looking like a kiss-up. I think that you have the balance right - lunch is too much. Just making the adjuster feel like you think they know what's going on (regardless of the reality) helps.
Being stuck between the company and HO is the worst spot to be.
Good luck!
We do about $5,000,000 per year in insurance repair work. You have gotten a number of very accurate responses so far. We have found that the industry is headed towards software based estimating programs such as Exactimate and Simsal. These very expensive software packages come with a database of thousands of common work items with unit pricing. Generally, costs per sq/lineal foot of material and the associated labor cost. You should ask the insurance company if they have pricing info for you.
The estimate writing process may be unlike anything you have ever seen. It can be extremely tedious. After you put in the hours to learn it, it can be beneficial.
Make sure you look at what they are willing to pay for your work. Especially on small jobs. The allowances sometimes are beyond brutal.
I have been doing this for almost 20 years and I could go on for hours. If you choose to take the plunge, email me. I would be happy to talk to you on the phone about this. There is a lot that I am not at liberty to type into a public forum.
carpenter in transition
I'll add this story to the formula of insurance claims. They can work in favor of the contractor.
A friend of ours had a washer hose failure and flood the lower floor. The water damage was caught in time to prevent any drywall damage, or at least most of it. What it did do was stain the walls and base boards to require the whole down stairs to be painted, except for the kitchen. They also allowed the stair case and upper hall to be painted so all would match. The local water damage company gave a bid to a large insurance company for around $4000.00. My friends asked if they would pay the same rate if another contractor did the work and that was O.K. with them as long as they have a proposal/invoice from a licensed contractor. Anything more than that amount, the homeowner would have to pay out of pocket, or prove more unseen damage.
Since the carpets were all torn out and the furniture was removed, I went in on a saturday, sprayed 1 coat of primer/stain blocker and 2 coats of high grade paint. Masked, srayed and cleaned up in less than 2 days(Summer in SoCal), with $500 in paint. Could I have done it for less money, yes. I probably would have done it for no labor if they didn't have insurance. The agent said that the paint job was better than the other guy that he refers. The claims agent asked if I wanted to do any other claims work. I Said, no and told him I wasn't a painter. Probably was a mistake, but I really hate painting.
Sort of explains why companies like "Service Master" are so big.