Hello all,
I am curious of how much, if at all, you have been able to negotiate with insurance companies.
I am finishing up a fire restoration job this week.
Hello all,
I am curious of how much, if at all, you have been able to negotiate with insurance companies.
I am finishing up a fire restoration job this week.
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Replies
I used to be a claim rep for a p&c company. What do you mean by negotiate? Negotiatein gon scope of work is different than negotiating on price. Give me more info and i will be happy to share what i know.
I got them up 20% on the last job and was wondering if it is normal for them to throw low-ball estimate at you.
The Insurance restoration construction is a whole new ball game.
The first thing you have to do is do a good itemized wright-up. Pictures and explanation. Room by room,wall by wall.
the way to wright the scope is :
a. Remove drywall x $0.20 per sq.f..
B.install and finish (3-coats) drywall.X $ per sq.f.
C.prime and paint walls total 3 coats. x $ per sq.f.
There many things that is extra. Dumpster-permits-and fee's.
And at the end you should allways charge sales tax on materials only
and 10+10 overhead and profit.
If the total of the scope is $50.000.00 you can charge 10% profit $5.000.00
And it top or the $55.000.00 you charge the other 10% that is $5.500.00
Plus sales tax on est.materials.
YCF Dino
What Dino is referring to is the unit cost approach. You need to break everything down into unit costs so they can do a bid comparison between yours and any other contractor involved and compare them with a standard cost guide. Then be ready to explain any reason for an inevitable difference.
Informing the claims rep, in a nice, professional way and working 'with them' in determining the fair repair cost from the beginning will save a lot of time and negotating later.
Most policies provide an 'appraisal clause' for settling any non-coverage issues such as cost, scope, etc. You should read and be informed on the wording and how the appraisal clause works in the state where you are working.
If you cannot resolve the difference with the claims rep. then be prepared to advise the insured to go to appraisal as the policy rights belong to the insured by the contract. In appraisal the key is selection of the 'umpire'. They are the person who agrees with one side over the other and makes the final call. You can be the insured's appraiser and the ins co will select their apprasier, usually, not the adjutser handling the file but another contractor who they will pay to do a scope and estimate.
If you can't agree on an umpire a court can be petitioned to appoint one but this is very rare. Usually you should have a list of three or more persons you consider to be reputable and knowledgeable in estimating repair costs and who will be able to explain why they agree with on side over the other. This helps their credibility.
The cost of the umpire is usually split equally between the insured and the company.
edit: I intended this for Carter.
"I will never surrender or retreat. " Col. Wm. B. Travis, The Alamo, Feb. 1835
Edited 11/30/2004 9:53 pm ET by intrepid_cat
They sent me an itemized estimate and I had to revise/approve it.
Do they allow the 10 and 10 profit and overhead? Sales tax on materials?
emergency services/fees/permits/dumpster?
The job is not done untill the HO signs a release form to the insurance co.
Any unforseen item's not outline on the original scope they should be documented and aprooved before you finish. You should don't have to pay for any extra work.Even if you aproove the scope. The HO should pick up the phone and call the adjustor to come over and do his job.
If ou run into any problems ..stop the job. That should make thinks move the right way.
YCF Dino
Yes, they did give all of those allowances. The problem, which is MY fault, is that I went ahead and did most of the stuff.
Look's like you have a good start. You can have a good finish if you talk to the HO and adjustor the same time.
Call for a meeting and presend your case to both. The claim is not done untill the HO signs a release.Let the HO and the adjustor come up with the solution $$$.
and they will if you stop the job.
Good luck.
"The job is not done untill the HO signs a release form to the insurance co."not necessairly true. The company owes the insured to repair or replace the damage sustained per the guidlines of the policy. unfortunately - many times the insured is not fully happy with the outcome of the claim (loss exceeds coverage, no coverage for loss, unrealistic ideas abotu the value of items)There is a fine line that needs to be walked. The company is there for the insured. In a case like this - the contractor unoffically represents the insured becasue the magnitude of what is being done is too complex for the insured to full understand (after all - the contractor is the expert). The best scenario is to have the contractor work things out with the adjuster. and in the end - if the adjuster doesnt feel that it was necessary and wont pay - the bill needs to go to the insured.
There is a fine line that needs to be walked.
Yes. I' agrrrre with you. But if you continue working without any agreement from the insurance or the HO the "fine line" is gone.
The only way to get things right for you is to inform both and take a brake .. That should make them realize the situation and make things right before is to late.
Frank. You're right about some ins. CO's but not all.
And for 15 year's I' was getting (the 10 and 10) this way. Lucky?
YCF Dino
"And for 15 year's I' was getting (the 10 and 10) this way. Lucky?"yep :) actually - I used to calculate it your way all the time to give a bump to a contractor that was in a no win situation. I usualyl was slapped for it during a file review.I agree - if you dont get that file line drawn you are SOL. Hopefulyl - everyone involved is a good person and all goes well. a few - though - spoil it for all.
Generally if you can explain and justify the cost of repairs to the adjuster you will get most of what you want. Sometimes they negotiate a bit that way the adjusters feel they saved the company some money.
I work for a big restoration company and we run into estimate issues sometimes also. The the insurance companies arent all bad. They are fair, if you have some unforseen item pop up they have no problem adding it to your estimate. Pictures are a big help if its a small item or a big they may want to meet you at the job to go over it.
Goodluck Chris
I work for a big restoration company and we run into estimate issues sometimes also. The the insurance companies arent all bad. They are fair, if you have some unforseen item pop up they have no problem adding it to your estimate. Pictures are a big help if its a small item or a big they may want to meet you at the job to go over it.
As long as they know you and as long you're a "good contractor" that is willing to hide all the big problems from the homeowner or at list don't bring the issue's up. They even throw few extra bucks at small ticket items and ..everybody is happy.
The whole insurance restoration deal is a big scam. From the public adjustor's down to the "recomended -aprooved contractor.
To give you an idea about the industry. The public adjustor takes 20% right of the top. The Gen.contractor take's another 35% from the sub. contractor. who is not really a sub contractor because he never quote the job or control the scedjule.
The whole "insurance restoration" deal is how to screw the policy holder and the last guy who's doing the work. That's all.
YCF Dino
That does not appear to be the case in my example. The HO TOLD them that I was going to do the work, they did not take issue with that. As far as the GC SC points, I did all the work myself.
What I am concerned with now is a contingency.
There were a few things that were overlooked on the original estimate and I would rather not be the one who pays for them.
I have never seen a renovation project where there was not a contingency.
It sounds liek the scope changed - so i think that you should be able to get the difference paid. I dont knwo as though they "lowball" a claim intentionally - but they are more willing to come in low and increase if the scope warrants - versus approving a "worst case scenario" estimate and scope.In my experience - Dino's 10 and 10 is incorrently appllied. The profit and over head are both computed from the labor/materials. so - 10 and 10 on a 50,000 estimate is an extra 10,000 - not 10,500 as in his example.
Carter, most of the responses seem to be good info. Heres mine.
I've done a few insurance jobs...not a lot..a few many years ago.
The one that comes to my mind was a very simple hole in the ceiling. I was in the house talking about some other work and the guy mentions a hole in the bedroom ceiling that happened when his son walked up the valley and put several holes in it while decorating for xmas.
Anyways, I figured that if I was going to do the job, I could get it done in about four hours tops including the drywall patch and paint....but I wasn't sure and didn't want to sell myself short which is the normal practice for me.
Anyways, I ended up itemizing a two page repair that totalled a little over 2k. I put everything in it.....if I thought I had to fart...I added a few minutes...but I didn't put any time or money on each itemization...just the laundry list...which is extensive if you actually stop to think about it.
Before I walked out of that house, the homeowner showed me another water damage problem in his basement 1/2 bath. The tiny bath ended up being anther 1500 or so.
Anyways, the agent calls me and starts whining about how much higher we are than other companies he's dealt with. I hold my ground, talk about quality, talk about sending professional skilled tradesmen. He requests a detailed itemization, which I send in. He calls back and whines some more...and I hold my ground. Eventually he begs for some break. I offer $150 if he'll accept both jobs at the same time. He agrees.
The point is that the insurance company does not have any say in who does the work...their only job is to cut a check. Would Bill Gates let an unskilled redneck into his mansion to repair his ceiling? NO! If you are professional, and charge professional rates, and have legitimate reasons why those jobs need to be done, the insurance carrier is bound by law to pay.
Of course...sometimes it ends up in court..which is very expensive for them too...so find that magical number and get it!
blue
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