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Have your client hire a public adjuster. Their purpose is to provide an independent estimate of damages. It will help insulate you from any problems with the insurance company and your client. The client must also realize that insurance is to repair or replace what was there, not what they wish was there.
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I'm got a past customer (probably the best customer I've ever had in both volume of work and personality) that had a garage damaged and a shed distroyed in Hurricane Floyd.
She has asked me to repair both and told me her insurance co will give her $6,700 for the repairs. This won't even come close.
I'm sure the adjuster "missed" some items but I don't know what his breakdown is.
What is the procedure for negotiating with insurace companies to help my great customer get what she diserves.
I know that the adjuster wants two sheets of corrigated roofing replaced but never mentioned the broken t&G roof sheathing and purlins below.
He wants the new shed built on wood posts without concrete footings. He said that the new shed will have the same wood floor (on grade) that the old shed had. My customer understands that I can't build it exactly the way they built them 100years ago.
I don't know how to procede. Any suggestions appreciated.
*Do an estimate for your client and have her submit it to the insurance company. They should be able to work something out. If not, have her get another estimate and submit it to the insurance adjuster. If that doesn't work, have her contact her attorney. Adjusters are suppose to settle claims that are satisfactory to their clients and save the company as much as possible.
*Ryan - have you talked with the adjuster yet? The few times I have done insurance work I talked either with the agent or the adjuster. They always seemed resonable once I itemized damages and repair costs. A phone call could be a good start. There was an article about doing insurance work in the past year or two in either FHB or JLC. - jb
*Friend??? Insurance???? Adjuster?????Just do your bid and make it worthwhile. When it comes right down to the nitty-gritty, they all would not feel bad about putting the "screws" to the the guy who will do the job for the least.Trust me on this one Ryan, it don't pay to try and cash in on disaster work in the long run. Just about the time you think you are making a fair wage, the fork is planted square in your ass. Especially if you get your check from the insurance company. Go to work as an estimator on salary for an established local construction company, they can afford the lawyers to mitigate the BS.
*Have your client hire a public adjuster. Their purpose is to provide an independent estimate of damages. It will help insulate you from any problems with the insurance company and your client. The client must also realize that insurance is to repair or replace what was there, not what they wish was there.
*Great advice. Also, the homeowner should check her contract to see what appeal rights she has. Certainly the insurance company has a responsibility to restore the property to its original condition and up to Code. However, this is primarily her problem and not yours. You can only provide the expert opinion as to estimating costs.
*Be careful about jumping in the middle of a disagreement with the client and the insurance adjuster.I work on at least one insurance job a month, sometimes more. One thing I learned right off the bat was how these guys operate. You, as a contractor, are not their best friend. You can cause more harm than good if you get involved in the fight. First and utmost is to find out what kind of policy the client has. Very rarely does an insurance company pay to repair a structure to "like new", or "as it was before" condition. The client's policy will dictate how much of a deductible they have, percentage of coverage, and how the repairs are to be done. I have found many, many clients with $1,000.00 deductibles. This keeps their payments low, and everything is fine until they have a claim. Then they don't have the $1,000.00 deductible when repairs need to be made. I cannot eat the $1,000.00 in order for them to be able to afford the repairs. In my area, most insurance companies only pay out somewhere in the vicinity of 80% of the total now, but there are still a lot of companies that pay for all of it. Again, the client's policy will spell all of this out.I personally just submit a bid as if it were any other job. If the insurance payment doesn't cover the amount, then the customer will have to come up with the rest of it. If they feel like the amount the insurance company is offering is way too low, there is an appeals process they can follow. Chances of them getting much more is slim, but always worth the chance. Sometimes my client will show the insurance adjuster the bid AFTER he has done his estimate of damage. In a few cases, they have revised their original amount, and gave the customer a reasonable amount to cover the repairs. Be careful when dealing with insurance companies. If you are not careful, and especially if you let them know that you are new to dealing with insurance adjusters, you will get burned. I have been dealing with them for a few years, and I pretty much know the majority of the adjusters in my area. Some I get along with, some I think are a joke. But I have experience dealing with them, and they know it. Just my two cents worth...James DuHamel
*Ryan, the first thing you have to realize is that the insurer has one, and only one responsibilty: to write a check for damages claimed.That said, you now know that there is a lot of difernces of opinion about what needs to be done.Heres my story about one of my first insurance jobs. I was visiting a firend when he told me about a ceiling that needed fixing. It had a small hole in it and the drywall was droopy. Some would say it was a $100 repair. I figured it up to be $2200. Yes I was gouging as best as I could.Before I walked out, he mentioned a nother problem. A leak in a small bath in the basement had ruined the tile, and damaged some paneling. Some would charge 200$, I wrote an stimate for $2100.I then assured the friend that I would do the job for what ever the insurance agreed to. The agent was quite surprised that a small hole could cost so much. I held my gorund and stated that we were a professional and dependable remodeling company and we didn't set out standards, nor compete with guys working out of their station wagons. I also mentioned that my client had a lot of nice artwork in the house that could easily be damaged by irresponsible wannabe kid carpenters.After one minute of haggling, I agreed to accept $100 less if I was awarded both jobs simultaneoulsly.He agreed.Less than a month later, I got a referral from him for another insurance claim.I then "gouged" that client.But it isn't gouging. If you owned a million dollar mansion, would you be looking for the cheapest contractor, or the best? I always tell my clients that they deserve the best, and that I will fight for them.blue
*Insurance adjuster work for the insurance companies. However most of them will work with you to complete there jobs. We also are doing a lot of insurance work and have a few problems with adjusters. Most of time submit a bill and it's covered. If your tring to "cash in" on the strom these guy's will know and you'll have a up hill fight. Good luck and talk to the guy. Let us know how it comes out
*Thanks, James, I'm off to read my policy...
*Maybe it is different for roofing work but here is what I do.1)I explain to the customer that my contract is with the customer and that the customer is reponsible for paying me,not the insurance company.2)My price,is my price,is my price.If I do the work,this is what it will cost,no matter what the customer collects from the insurer.3)I explain to the customer that I will be more than happy to talk to the adjuster4) when the adjuster calls with my estimate in hand he seems to take 1 of 2 approachesA)The roof on the house is 17 years old.we are responsible for paying the value of a 17 year old roof which is $XXXX. We are not resonsible for paying to install a NEW roof which is maybe 7 times$XXXXORB)We are responsible for restoring the roof to the condition it was before the storm.It does not matter to us that the current codes require icegaurd,drip edge,felt etc.None of those things are on the existing roof,we aren't paying to put them on the new roof.I also find that the adjuster will want an itemized cost of how many sq.of shingles,how much flashing costs,how much per lineal ft. of wood replacement(rot is assumed to be pre existing and will not be paid for)He will want a seperate price for every possible item or operation and then try to beat down my price saying that the contractors he usually deals with charge him lower rates. This is when I refer him back to items 1 and 2This whole approach works well with customers I have dealt with before. They already want me to do the work.It doesn't work nearly so well with customers I have no previous dealings with.All in all I would recommend setting your price and then let the customer find out how to pay for it.Good Luck,stephen
*Stephen,I agree that my price is what it is. I've also already decided that the home owner has to do the negotiating.I'm uncomfortable showing my direct costs. Do you show material and labor costs for each item or just one price for each line?Do I need to say "x square of shingles @ $y ea...plus 1-1/2 hrs labor at $z per hour." or can I just say "r&r x square of shingles...$y."
*Ryan what they want is direct break down of costs. X squares at x dollars plus x amount per square per shingle,per roofing nail per hammer stroke. What I do is a admin cost for all this paper they want. Add a hour into your bill or whatever it takes to break all this out for them. What I say is "it will cost it will cost the same today as it did yesterday, it's the same price that we charged before the storm and it's the same price I charge after the storm." I also ask for his work up sheet and attack things that may be off for your area.....here it was a $200 30 yd dumpster. A 30 yd here run's around $400 so that may be a problem. Check shingle prices as he has them see if he added clean up and the odd stuff.......Good luck
*ryan,I am reluctant to share my direct costs also. Thats why I remind him of items 1&2.If he really needs to know the price of something like Icegaurd I will just pull a number out of my rear to keep him happy.I will not itemize or cost out each item---thats my business and no one elses.Remember the insurance guy isn't your customer and you are under no obligation to him.One of my items that I sometimes use is a clause that states"Replace up to 5% of roof decking if needed"I once had an adjuster ask me how much cost I attributed to replacing 5% of the roof deck under discussion.After I told him the figure,he said something like" what happens to that money if no wood needs replacing?I assume you lower the final bill"I laughed at him and said something like"thats part of what I call PROFIT"concentrate on selling and serving the customer,NOT the adjuster.The adjuster can neither give you the job or take it away. That is the customers choice.Once again I will admidt that all this works best when I have had previous dealings with the customer. They already want MY work and cost is a secondary issue. If I have no previous contact with the customer then cost WILL be the deciding factor and the adjuster will do his best to steer the work to the low ball bidder OR to someone he is more familiar with.Good Luck,Stephen
*Boy, Stephen, I'd hate to have to try to rip you off. Sounds like too much work to be worth it! I think your business sense makes a lot of common sense and appreciate hearing it. I won't break down costs either because I guess half of them anyway and expect it all comes out in the wash. If the customers wants to split hairs on materials and labor then the profit cost should go up since he's cutting into your self-insurance. Result: same price. Regrettably, I really didn't understand this as a customer despite good intentions.The insurance company should hire people who can make their own estimetes instead of trying to dissect yours!
*Hello everyoneEverything stated above are good points. You as the builder/remodeler/contractor work for yourself and not for the client or adjuster. Don't compromise your position just to get a job or get involved in a dispute between the policy holder and the insurance agent/adjuster unless you get paid for representing one or the other. I have learned the hard way. As you know, we had a pretty bad tornado come thru this area on May 3, 1999. The phone didn't stop ringing form victims needing estimates for replacing their homes or needing major repair work. If it was a complete loss, the first questions I asked the policy holder was When did you buy your home?About how much did you pay for it?Did your policy cover replacement cost?You would be suprised how many homeowners get only the insurance necessary that was required to satisfy their morgage requirements. The homeowner couldn't believe that it was going to cost twice as much to rebuild as they had originally paid. Normally, I charge for estimates for home construction and for repair estimates, but during this time frame, everyone was doing everything they could possible do to help the victims. The adjusters were overworked and did not give enough time on repair estimates and in many cases of a complete loss, if the slab was still standing, did not want to pay the cost of removing the slab and putting down a new one. After taking a sighting on a few of the slabs, we discovered that in many cases, there was as much as a 2 - 3 inch difference between opposite corners. You would be suprised how much as slab can be raised up before the anchor bolts break or pull out and the slab falls back down. After the first couple, we just started to figure in the cost of having the slab removed, hauled away and starting from scratch. We didn't argue with the adjusters. We put in our estimate that unless the slab was removed, we could not be responsible for any cracking/settlement of the slab once construction was started/complete, therefor we would not be able to accept the job. As for repair jobs, I went to many homes to give an estimate of a roof repair, where the adjuster did not even go into the attic to see if there was any rafter damage or walk thru the house to see if there were any cracks in the ceilings at the wall/ceiling joint. All this went into my report/estimate to the homeowner with a copy to their insurance agent. Average time spent on each home, including paperwork was about 2 1/2 hours. In some cases where the homeowner could not get the adjuster to change change their estimate, I was called by the customer to explain to the adjuster my reasoning. It was at that point, I told the customer that I had an hourly fee and if they wanted to pay that fee, I would be happy to work with them in trying to get the claim adjusted. If they accepted my terms, I then requested that they either get an itemized copy of the claims adjusters report or sign a statement that I was their authorized representative and was to be given any paperwork necessary just as if it was being given to them. I then compared the adjusters report to my own findings and in many cases found where the adjuster had undvalued the cost of items such as dumpster fees, materials, etc. Most of the time there was no problem in getting a higher adjustment. The only big problem came, not with an insurance adjuster, but with the owner of a commercial building. This person owns several buildings in the area that he rents out. 6 of the buildings are leased to a day-care center business and 1 building was damaged in the tornado. Briefly, 60' x 110' coverted from a "strip center" into a day care center, 16' from floor to flat metal roof that only dropped 16" from front to rear. Roof had been repaired and modified many times. 9' mansard sides, etc. Owner discussed updating and modernizing building (including roof design) at the same time of repairs and also mentioned that he wanted to update the other 5 day-care buildings. Did not charge owner for repair estimate, but charged him an estimate fee for the updating. Adjusters estimate and mine were way off. My estimate was almost twice as much as the adjusters and the owner wanted me to get with the adjuster. I figured that since he wanted me to do the update (including the other 5 buildings), that I would not charge a fee. After a few meetings with the adjuster discussing all the problems I found during my inspections, we were able to get a higher claims settlement. It came very close to my original repair estimate. To make a long story short, the owner received a settlement check. He also had loss of business coverage ($2,500.00 month). He has not returned any of my phone calls or responded to any of my letters and now 6 months later (the building is still vacant and not repaired) he has put the building on the market for sale as is. As for sharing exact costs, I for one do not give that information out to anyone unless I am doing a cost plus job. From looking at the estimators paperwork, that is the way they do it. So many lf of facia @ $00.00 per lf, labor @ xxx per lf, etc. In my estimates, I just list what I am going to do, ie. Roof: Remove existing shingles and building paper, Remove from site, repair damaged sheathing (up to XXX sf, replace existing turbine vents (2), repair/replace damaged plumbing vents and flashing (2), install new 15lb felt, flashing, drip edge and install new 20yr, 3 tab comp shingles (brand name, type & color). I also state that this does not include repair/replacement of any broken/damaged roof rafters. I continue with the estimate, breaking it down into catagories until everything is listed with exceptions noted in the appropriate places. At the end of the list, I give a total for the job. Like I stated earlier, if there is a big difference between my estimate and the adjusters, once I have gotten that fee to act in the owners behalf, I then compare my notes and prices to what the adjuster has given me, but under no circumstance do I show my figures to anyone.Vince
*Hello All, I look at all of this in a little different light than most of you. I don't think any of you are wrong, it's just that I do it a little different. In my estimates, I break down materials and labor per stage. I list my materials, what price I am charging per piece/item, and tax. In my labor section, I list each labor activity, how many hours it will take, and how much per hour I am charging. I do not think this is a bad thing to do at all. My philosophy is that I am a retail business. I am buying my materials from a supplier, and re-selling them at a markup (profit). This is no different than a lumberyard, box store, etc... I am not ashamed of my markups, therefore I have no problem telling them what it will cost them. If my customers want to spend their time and gas running all over town trying to find a better deal, that is their right, After all, they are consumers too. Once they spend a bit of time running around, having to deal with the nightmares at Home Depot, Lowes, etc... they usually just wind up telling me to go ahead and provide the materials. I never tell the customer what my actual cost of anything is, just the marked up price. The markup is part of my profit, and as a Sole Proprietor, any profit is part of my wages. I have no trouble dealing with Insurance companies, State Agencies, etc... who require a breakdown. My estimates are already broken down item by item.Just my thoughts...James DuHamel
*James,thats the great thing about this forum. We get to hear how other people around the country or the world handle similar situations and then decide if their methods might benefit us.I am sure that your method works well for you,but I am equally sure it would be a giant disaster if I tried .I agree that I am basically a retailer,but I also provide a service. My experience tells me that anytime I have ever tried to itemize costs for a customer it leads to a bargain hunting/bartering mentality in the customer.Itemizing costs is a lot of extra work for me with no possible benefit to me. Instead it presents a huge downside for me and encourages constant phonecalls from the potential customer with questions like"how much if we use this bargain supplier instead of your regular yard""how much if I clean up the trash""how much if I supply all the materials and you just nail on the shingles".It gives the consumer the false impression that many of the itemized areas are negotiable.I have consciously developed a system which simplifies the whole process for the consumer and more importantly simplifies it for ME.The customer has only 2 choices to make...1)Pick Steve or pick someone else2) what color and style of shingle do I want?Once the customer has picked me and decided on their shingle they have only 2 responsibilities...1)write Steve his check2) make sure Steve has access to electricity.If I could make it simpler than this I would,but I am not going to do anything that could possibly encourage and endless series of conversations about where is the cheapest place to buy 15# felt.(and if I found a cheaper source of 15# why would I pass on the savings to the customer?)Best wishes,Stephen