Roofing Business Talk
I live in Oklahoma City and I have a Roofing Company. I'm having the toughest time getting the insurance companies to pay out xactimate pricing?? There are some that have switched to the xactimate pricing but there are ones that pay out ridiculously low pricing per square ($150sq)? Farmers Insurance is the worst of them all. I can't get some of them to pay O&P either (there's more them 3 trades)??? I've never had this much of a problem, last year, after the hail storm, they didn't really fight you on the xactimate estimates after I submitted them but this year they are not budging!!!! It's also frustrating because the homeowners don't get it, they think they've been paid out a lot of money but they don't understand that it's not enough money to complete the whole project? Is there something I'm suppose to be saying? Is there something I can do?
The first step is to modify your sales approach and educate your Customers, who happen to hold the policy/contract with the insurance company, in order for them to be your ally and assist in getting the insurance company to budge. The insurance company has no obligation to work with you and arguably, you could be charged with a crime for acting as an attorney or public adjuster by negotiating or attempting to negotiate the settlement of the claim. Instead, your Customer should be telling the Adjuster you're their contractor, you have a contract and they want the insurance company to approve your estimate asap so the repairs can be made. You will likely need the HO's assistance when supplements are filed. Stay firm, stay professional, stay tenacious and you'll win a lot more than you lose with this approach with a lot less frustration.
This is real simple. The insurance companies paid out record claims in 2011. They've paid out tons already this fiscal year. Clearly, this affects profits. Many of the Insurance Executives receive bonuses and stock options based upon company performance. Those Executives probably didn't get to buy new Beach Houses in 2011 since their bonuses were cut. While they may arguably be selfish, greedy and without much integrity, they're not stupid. They've set out this year to correct those pay out problems, even if it represents bad faith claim practice and screws their Customers. Their Successors can deal with the inevitable class action law suits down the road after they've taken the bonus money and golden umbrellas and ran for retirement. In the meantime, you need to deal with this. You need to be one of the 20% less that knows how to play the game correctly in order to get paid fairly. Or you can keep doing the same ole, same ole hoping for a miracle.
I'm not acting as a lawyer? I'm just trying to find out if there is some sort of legal way to get the insurance company to pay the industry standard? I take it personal too, I'm a woman in the construction industry and I sometimes feel i'm treated differently because of it. I've got a signed contract with the homeowner, I fax the insurance company my bid, and they call me and tell me that they either don't pay O&P or less than what you could roof a house for ($150sq). There's got to be a legal way for the homeowner to be paid out what they deserve? I'm not going to start the project until the payout is resolved? I hate the fact that there are homeowners out there that have received there payout money and it's not even enough to roof their house! The majority of homeowners aren't educated on their rights when it comes to insurance policies. They pre-pay (premium) for a trusted general contractor of their choice!!! Why doesn't that apply?
There are numerous states passing legislation making it illegal for Contractors to negotiate claims. The Texas Department of Insurance is quite clear on these matters. There are those that think when a Contractor brings up any policy discussions and/or attempts to negotiate price (which may be construed as an attempt to settle a claim), they are crossing the line into the Attorney/Public Adjuster arena. I'm not saying I'm agreeing with any of this, I'm simply stating how it is.
I'm thinking Farmers switched from Xactimate to Simsol in the past year. I'm also thinking Simsol uses the Craftsman price data base. Either way, I'm no fan of Farmers and am thankful they have very small market share in the areas we work. It's not a good feeling for me when I see Farmers or Allstate as the insurance carrier for one of our Customers. However, we've found certain Farmers Adjusters are reasonable to deal with and again, by getting the HO on our side and staying tenacious, we've had reasonable success getting the claims paid fairly.
I don't think you being female has much to do with it, it is tough out there period right now with the big P&C Insurance companies. They seem to be very equal opportunity when it comes to marginal (I'm being kind) claims practices and underpaying claims.
I've got the homeowner on my side, I've informed him to file a complaint with the Insurance Commisioners Office.
Have you ever just started/completed a job and then submitted your receipts as a suppliment? I'd be affraid of not getting paid. I'm not trying to rip off the insurance company or get rich, I just don't know why they wont except my bid? I also can't just walk away and leave the homeowner high and dry with not enough money....It's a friend so I just couldn't do that to him.
I'm actually meeting with the adjuster tomorrow at the homeowners house to go over everything. He won't pay O&P and base service charges. Any good advise on how I could reason with him on paying out for O&P and Base service charges?
Yes, we've completed jobs and then turned in receipts. We've gotten burned doing that as well. In general, if it is more than 1 square, we first attempt to contact the Adjuster for approval. If no success, we ask the HO to contact the Adjuster. If no luck there, we call the toll free number to contact a Desk Adjuster to get approval. If that doesn't work, we halt work, tarp the incomplete area and discuss what is happening with the HO. When we finally do talk to the Adjuster, we get some crap like "You halted the job because of 1 square?" My response is "Yes sir. We did that because two weeks ago we moved ahead and finished the job with material overage and you (or your company) refused to pay our supplement stating we should have gotten approval before proceeding." We then usually get some silence and then something like "It's only one square, most companies eat that and move on" to which I respond "I prefer a steady diet of profitable jobs in order for us to be around to honor our workmanship warranty if necessary." We had one where it got escalated to a 2nd level manager who gave his verbal approval for 5 squares overage. He subsequently got moved to a new location and they refused to honor his verbal agreement. Thankfully, the conversation had involved the HO who called this manager's replacement and told him he expected to have the word of a company manager honored and to pay our supplement. They subsequently did.
I don't know the details of your claim but I would recommend you have the HO attend the next meeting and have them be very firm with the Adjuster in expecting your estimate to be paid. I don't know why you'd try to negotiate it, it's the HO's property and they have the contract with Farmers. You can be there as the Construction Expert to discuss why line items are necessary. If that fails, get a Public Adjuster involved or probably better, go to 3rd party appraisal. Definitely encourage the HO to send a letter to the Department of Insurance. In some states that helps, in others, that group is in the Insurance Company's pockets and therefore makes the effort largely a waste of time.
I'm in Kansas and yes...Farmers switched to Simsol...and most of the adjusters don't like it. You have to add in the dumpster fees to even come close on the removal squares...and for me, I add in all the install squares, felt, drip, pipe jacks, vents, etc., and typically end up with something fairly close. Removal squares are $3-$5 off, install squares for laminates are $5-$9 off. I have had 100% success in emailing quotes to central claims and getting them all approved. Never a problem.
I am dealing with two Farmer's claims. One claim is outly being denied. The other, the pricing is cheap and they told the HO they do not negotiate the pricing, period. Would that not be price fixing then? Also does not surprise me, another software company just makes lower price fixing possible, of course switching will commence...
Farmers IMO is the worst in the San Antonio area then followed by State Farm and Allstate...
@Chriss@ArRoof - "I have had 100% success in emailing quotes to central claims and getting them all approved. Never a problem."
I emailed the central claims and having problems with both!
I quit trying to work with the field adjusters and went to the Regional (big) office and poured it all into them with Supps etc.Avoid the guys who get on the roof.My success ratio went straight up.I give the guys on the roof a hard time now just to see 'em squirm.I practice the BS right back.'We don't pay O/P on roofing'.Show me then.I have a handful of claims paid that way in my files in the truck.'We don't pay drip edge'.You mean O/L (ordinance and law) in the policy doesn't apply to this policy?Will you put that in writing for me? etc etc.How much profit are you providing for in your estimate? Then how do you know if we can do this roof with your calculations?How much Worker's Comp is figured into this Xactimate scope? Can we just use the Homeowners policy for damages if one of our guys gets hurt? (Ad Infinitum.)Even other contractors get all huffy when they tell the adjuster that they WON"T do the job for the scope and walk away.
Education isn't expensive,ignorance is.
LMB and 3RSTIMAX helped me a LOT and made my work WAY more profitable and easier.
AD and some of the other guys here have helped me a lot too.
Kevin Scheid I just met.Another huge help.
Not sure if everyone knows this, but Farmers new software starts paying steep at 6/12. Many of the adjusters only got a day or two of training, so they honestly don't even know.
Has anyone seem claims where "all the roof accessories are included" in this mystery lump sum line item??
This is the response I got from tech support at Symbility ( very quick response, by the way ):
"I am not aware of a single lump sum item in any of the price databases that would do what you describe. However, you have the ability to create item batches (a list of associated items that can be added as a batch)."
I think it's an attempt by Farmers to side-step accurate scrap calculations like those from AD, by lumping everything together. I had a house with 150' of step flashing, 7 lpv and 4 turbines ( yes - over-ventilated, but horrible configuration ), and 6 heat stacks. They said it was all "in there" in the standard line item. Really??
I'm actually going to say something nice about adjusters: they get screwed by the insurance companies just like the customers get screwed.
Had an interesting conversation with a State Farm adjuster today. Got him to pay from drip edge although State Farm doesn't usually pay for it. He paid for gutters but not downspouts until I argued "line of sight". Asked him for O&P. He said he couldn't get it. Told him the deal last week he wrote up without O&P, had O&P supplemented by the desk adjuster.
His statement: if I pay for any of these things: drip edge, boot jacks, etc. my managers scream at me.
They won't let me do it. I get paid on the front end. Most people just accept my estimate. If they ask for a supplement on the back end, State Farm usually pays it, but I only get paid on the front end, not on the back end supplement. I'll write up as much as I can without getting screamed at, but SF never misses a chance to screw me on the back end.
Geez, I almost felt sorry for the guy.
I have heard the same thing from independent guys working for some of the smaller carriers. They will write 6" gutters instead of pipe jacks, etc.
I notice that juggling quite often. So they do that just to get the money right without getting reamed?
Fighting you on even XM8's rates?
Re O&P: Property & Casualty insurance companies must pay contractor Overhead and Profit (O&P) on all claims (not just when two or three or more trades are involved) without deductions for roofing, carpet, etc. Any Independent Adjuster or staff adjuster and/or in house claims representative and/or claim department supervisor and/or executive level claims management personnel who is a part of and/or supports any refusal to pay O&P on 100% of each claim, regardless of whether or not a GC is involved, has likely committed a bad faith act and a violation of fair market trade practices. Not paying O&P on 100% of every claim when it has been charged for as part of the insured’s premium payments results in an illegal windfall to the insurance company in the form of unjust enrichment. Such acts may also be construed as and may constitute fraud on the part of all parties representing the insurance company whose actions result in non-payment of full O&P.
Even if an adjuster and/or in house claims representative and/or their supervisors are simply following orders to attempt to withhold O&P payments from their insured’s, the responsible parties are still culpable for any wrong doing and are also therefore subject to the appropriate legal remedies which may include prosecution and/or substantial fines and/or imprisonment, if convicted. In addition, sub-contractor invoices are not required in order for O&P to be paid and are therefore not a valid reason or excuse for withholding O&P payments from the insured(s).
Let that whirl around the brain of the next adjuster who tells you, "we don't pay O&P" after asking him/her "do you pay E&O?"
Withholding Overhead and Profit is Wrong if Insurance Companies Are Trying to Act Right
I recently came across the above entitled report addressing the history of O&P and when, why and how O&P should be paid. Rather than attempt to summarize it here I thought it would be more helpful to provide the link to the report so that all of the information may be considered. One key thing to consider when reading through the report is the fact that when Texas and Colorado Departments of Insurance opined on the matter, both referred to O&P as both General Contractor Overhead and Profit and Contractor Overhead and Profit.
Ultimately, my reading of the report leads me to the same logical common sense conclusion that I have stated elsewhere, that O&P is always owed on 100% of the job regardless of who does the work under any and all circumstances.
Read it at: propertyinsurancecoveragelaw ... Profit.pdf
I have run into similar problems with insurance companies and their pricing. After viewing an insurance claims estimate I couldn't help but notice how low the payout was. It was incredibly low. I noticed that the estimating software was Simsol. I decided to contact Simsol myself to understand how they actually formulate their software. I spoke with the staff adjuster, who was so technical it was unreal, and asked him why their current estimates were so low. He asked me where my current customers home was located, he then entered the zip code for a sample estimate. He then explained to me that because the home's location was in a more rural area, the pay-out would be less on the belief that labor in that area would be cheaper. I know, I know...doesn't make much sense to me either. I explained to him that my materials, labor, and all resources come from a nearby city. But! He did say that this was actually going to be corrected in their latest software update which has already been released. So, Simsol with it's latest update should be more realistic as of now. I really don't come across adjusters with this software very often. *I always get the homeowners to sign a form allowing me to negotiate on their behalf.
Have a great day guys!
How do I approach the preinspection of the adjuster. I have lost too many jobs getting people coverage on their roof and losing the job in the end. I have tried to contract the job before hand and people won't sign, Then when they get coverage they blow me off looking for a cheaper contractor to keep some money. I don't want to do all the leg work for nothing!
I like your version allot better than the long version ! I think I will send it in with all my estimates...
If they wont sign, dont meet the adjuster !
I am in Ohio and have been trying to find info on O&P and O&L because I also have many adjusters denying O&P and things like not paying for drip edge and ice and water. Any suggestions?
Read every post about the subject in this site and then just don't accept their nonsense talk. Are you using Xactimate or some other estimating program? If so, how are their unit prices set up: with O and P, or without? Xactimate does not include O and P. It's very easy to prove and explain. Therefore, it's appropriate to add it at the end. If they refuse to allow it at the end, just change all the unit prices to include it. Either way, you'll get the same amount.
You need to understand, and believe, that your price is the only one that matters. Their estimate is just that, and estimate. Your price is the real deal. They are required by law to pay your estimate, unless they can prove that it does not fall into the "normal" range of prices in your area.
What does that mean? That means that you can't pull an outrageous number out of the sky and demand payment. If you try to charge $2,000 per square for labor for 3 tab, it will be very easy for the insurance company to deny your estimate on the grounds that it is not reasonable. On the other hand, if you take their unit price, and add 22% (to cover the 10% Overhead and 10% Profit, cumulative), then you will certainly fall within the "normal" rates for your area.
Also, add in EVERYTHING about your roof and accessories. Add every little detail. It all adds up, especially after you apply the O and P.
One other "attitude" might help you get your "estimates" approved. Somehow, if you can convey to the adjuster that you intend to collect the entire legitimate RCV, even if you have to sue your customer, they seem to understand a little better about how serious you are about protecting your profit margin. It's a bit radical, but realistic if you think about it. If they've signed a contingency deal to allow you to do the work for the RCV, including any applicable supplements, doesn't it make sense that you could march into court and win a suit with your legitimate estimate? Logically, the insurer understands that if you sue your customer, and wins, they will sue the insurer and win. Guess who ends up paying ALL the legal costs?
So, the question remains, is your estimate legit? If so, why are you afraid to stand up for it? How far are you willing to go to stand up for your rights? I've decided that I'll take it to the wall. So far, every adjuster has seemed to understand that I'm serious about my estimate and that I intend to fight the battle as far as I need to to get it paid; and they have approved my supplement requests.
One little tidbit that might be helpful for y'all to know. Here in TX, if a claimant files a lawsuit because the insurer didn't pay the claim fair, the lawyer's fees are paid out ON TOP of the damage estimate. NOT ONE PENNY comes out of the damage claim. FURTHERMORE, the claimant, is entitled to TREBLE DAMAGES!!!! The lawyer that explained that to me says that he takes his fees out of the treble damages. In addition to the treble damages, the insurance company will also have to reimburse the lawyer for his fees and expenses. My lawyer didn't specifically say that this same program works in other states but we were sitting in TX when we discussed all this.
Can you see the box that the insurer puts himself in when they deliberately underpay a claim? Why do they do it? Very simple....it's a number's game. They know that if they intentionally underpay 99% of the claims (I believe Larry's number), that when all things are said and done, they will be BILLIONS ahead because of the number of people who cave in and accept their pitiful offerings. The actual number of people who hire a lawyer and sue are very small in relation to the number of people who file claims and then accept the underpayment.
I give credit to Larry and the others on this particular site for opening my eyes. Ever since I've made up my mind to get paid fair, because of what they've taught me, I've gotten paid fair. You can get paid fair too, but you will have to demand it and be ready for action.