I know it is getting to be a nationwide problem, but insurance rates ae skyrocketing.
My agent called today, my policy is up for renewall
I have been with the same company since going into business, I have made no changes, have had no claims, missed no payments and my rates just went up 638%
yes thats right 638%
let me see, I could call all the outstanding bids and say, sorry, my bid just went up 600% are you still interested
my agent said if I want to get the cost down dont :
replace windows
replace siding
do roofing
install sunrooms
do anything over two stories
do any multifamily
do any custom homes over 400k
do any comerical project over 250k
do any tract homes in a development
transfer all the vehicles to my personal insurance
never take more then 1k in tools away from the office
well I dont do all of those things but how is the small guy supposed to stay legally in business
If your insurance is up for renewall soon…………………hold on to your as*…………….
I had been warned that it was going up 200 % but not this
So if you know of a good insurance company, affordable, in Oregon, would love to hear from you
Replies
had the same insurance co.for multiple cars and home.Not one claim,tiket etc.for over 20 years then the bill came after the stock market hit bottom ,seems that since a student loan payment was late i am suddenly a high risk! So i moved all of my policies from that farm and into a reasonable company that didnt expect me to cover their stock market losses,saved quite a bit of money in the process too.anyway the guy says he can get me a business policy which will also insure the truck,tools etc.so i go for it and pay the initial premium.about a month or so latter i get a cancelation letter saying they are no longer insuring contractors or as they like to call you (risks).To make a long story short i had a hard time reinsuring myself and my rates doubled WHAT A SCAM cant live with it cant live without it and if you ever need to use it you'd better have a damn good lawyer or youll probably never work again.
well I dont do all of those things but how is the small guy supposed to stay legally in business
You either need to be at the top of the ladder................or at the bottom working out of the back of a pickup.............the squeeze is on for anyone on the rungs inbetween.
health/liability/workers comp. and other such stuff is/has killed the in betweener. And then there's the law suits from savvy homeowners.......and last draw rip-offs cause they know it's your profit.......
It's risky to work without having all the bases covered........practically impossible if you do...............Legal?..........think survival.
My insurance was canceled........? that's right, canceled. Never had a claim, always paid on time, had it for 15 years and just out of the blue CANCELED?
I had 2 mil liability , I now have 600,000...........So does that mean the insurance company does'nt want to provide coverage for the small businees owners because we are too much of a risk, or does it mean they cancel you because they can get a higher premium from a larger firm?
I think they're all a bunch of crooks..............."Rather be a hammer than a nail"
Bob
I think we're sorta like cattle..........blindly being herded together and forced in a certain direction .........hope it ain't onto one of those big trucks heading for the slaughter house.There are fast carpenters who care..... there are slow carpenters who care more.....there are half fast carpenters who could care less......
How about a trade organization? Does anyone belong to NARI or a home builders organaization that offers group discounts on insurance? As individuals, we have no clout at all, but as a group, we might have some serious buying power.
Like everyone else, I have to find a new insurance company every few years and endure ever-increasing premiums even though I've never even considered filing a claim. I always assume these insurance companies would be of little help anyway. Does anyone have a story to share about when they were REALLY happy they had insurance?
Al Mollitor, Sharon MA
You're right we're all stuck in the middle . It's both the lawyers and the insurance. The lawyers find someone to sue for the big money they can get from the ins. co.s and the insurance co.s charge every one more because they are afraid if the lawyers. It's a self fulfilling existance, and getting worse every day. The middle guy is getting screwed.
I started this thread days ago, and I see many of you are facing the same problem , or will be soon.
We were told that our insurance was good and not to worry about it, then got the non re-newal notice. I now have two weeks to get insurance, and the one so far that looks like it will work wants all the years premium up front, provided my personal w-2s for the past three years and my credit rating looks good. What , Im a corproation, too bad.
In Oregon now there is basically three companies still offering insurance for contractors. And I am sure that they know they have a captive audience, surely they wouldn't raise rates for that reason (sure)
Like I mentioned earlier, we have had no claims and our rates are predicted right now to go up 600%, and if we stay with our window and siding replacement side of the business( separate of a remodel or addition or new) then it will add another 2k a year, plus my rep said no more roofs, sunrooms may be out, no more wine cellars because it is related to alcohol, however I can do orgainizers ( that hold wine, wink wink) just dont have wine anywhere in contract, give me a break.
was in a meeting with my rep yesterday and he says it is because of all the mold and mildew lawsuits
would licensing contractors help ? I doubt it, we have to be licensed here and there is still a lot of guys out there with a licence who have no clue what they are doing, but passed the tests. Got a dog and a truck ( so do I she is with me today, love my truck) and a business card.
When they get in trouble, they file for a new licence under a different DBA. formed by a different "corporation". walk away with a smile, they "won". the state agency in charge of all of this has been hit so hard wth buddget cuts they can no longer aduquately monitor it, and the "bad" guys know it.
Its not just the small guys that play that game , one of the biggest developers in town right now has changed names and licence at least 3 times in the past 6 years.
I think another part of the issue is non licensed guys out there doing fly by night work and the insurance companies getting stuck with it
Or maybe they are getting stuck with all the "homeowners' that home depot etc has told them , sure you can do this job yourself, permit, what permit
Maybe with it will take is the insurance companies saying things like, oh this remodel was supposed to have permits, and it didn't get one, sorry no pay.
As far as home builders associations etc, I think many of them are in bed with the whole thing because they sure don't seem to be doing much, I can get my insurance cheaper from an independent the through the builders association
anyway, its a big hit to my overhead , but what else can I do ?
someone earlier mentioned, something like the big guys will survive, the littel unlicenced guys will survive and all of us "in betweeners" are going to eat it.
Edited 2/12/2004 12:26:49 PM ET by hammertime
Hammertime,
I'm in Portland. If you are still looking for insurance I've got a couple ideas. And I'm not an agent either. LOL Try Homebuilders if you haven't already. Contractors Insurance. If you e mail me I'll get you my independent agents phone number. He has done a great job for me. Essentially Contractors Ins and my agent were neck and neck. And last year my rates went down (slightly).
[email protected]
Good luck
anyway, its a big hit to my overhead , but what else can I do ?
Wear your hard hat?
Actually in these parts a lot of guys are downsizing........some even going back to wearing a nail pouch and doing it themselves
Whe I was a fisherman I learned the big boat.........little boat syndrome
Big boat....big overhead........must catch a whole lot of fish
Little boat.....little overhead............need to catch fewer fish..... have more tavern time
There are fast carpenters who care..... there are slow carpenters who care more.....there are half fast carpenters who could care less......
That's what's going on here too. In fact I did. Just me and all my stuff, do it right the first time, much more efficient, actually higher profits make up for the volume. No call backs, paying guys through the slow times to hold on to them, less risk, less headaches. And by working together w/ other good contractors in the same boat we can help each other out and expand our worforce when needed i.e. framing, roofing. but not be saddled w/ all the downside when it's slow.
The time that used to be taken up by babysitting and paper trail is now catch and release.
This ought to be good;-
To stay on thread , if it gets alot worse I will do the same thing to the insurance co., (downsize them) There's a thought in the back of my head that just one years premium could be invested into creating a very good waiver. I have to sign them all of the time. I am sure my good customers would not have any problem w/ this, and if some one didn't want to, maybe I'm not all that interested in doing thier job. (maybe this will actually weed out the difficult ones)
Edited 2/13/2004 8:28:38 AM ET by JHOLE
And by working together w/ other good contractors in the same boat we can help each other out and expand our worforce when needed i.e. framing, roofing. but not be saddled w/ all the downside when it's slow.
That's the secret.........been doing it for years. Instead of moaning about how we are getting screwed by the system........we change tactics ...........one man companies and loose knit organization is the only thing to keep the mid level builder alive.
We have been busting our asses trying to play the game THEIR way for too long. What would the insurance co. do if we all said.............f you......we ain't gonna take it any more? There are fast carpenters who care..... there are slow carpenters who care more.....there are half fast carpenters who could care less......
bob , my agent warned me that a lot of companies were canceling policy holders.. and others were increasing rates 200% to 600%...
he said the companies they were dealing with were not doing either... and they didn't ... but i still look over my shoulder and hear those footsteps..
my agency is one of the biggest independents in Rhode Island.. and they have all of our policies.. GL, Tool Floater, Auto, and WC
i just keep my fingers crossed..Mike Smith Rhode Island : Design / Build / Repair / Restore
>a lot of companies were canceling policy holders
What's the logic? Smaller, leaner? Less risk? Other? If you keep turning away customers, eventually you don't have a business...
i don't know .. i'm a contractor.. but from what i've gleaned.. the InsCo's are cherry picking.. some states they're abandoning.. pulling out...
others thye're cutting their exposure...
basically .. find an independent agent who wants your business.. give him your whole package... it's not a good time to be filing claims.. but whatteryagonnado ?Mike Smith Rhode Island : Design / Build / Repair / Restore
Mike I think the whole insurance thing is a scam............We're not doctors getting sued for millions, we're hands on hard working guys trying to make a living, in a high risk environment.
Some bean counter has done the math and lumped us in with all the other high risk professions and "now you good and faithful servants" you will be canceled.............
Thanks for the denaros all these years and thanks for never filing a claim, now we can build a 50 story skyscraper and call it our own.
Let's go build a deck, payment up front of course, half way through lets cancel our relationship with the client because they don't serve coffee and donuts in the morning. At least that is a better explanation than these insurance people can come up with.
No wonder there are so many contractors paying under the table. Lie, cheat, steel, we learn from the best.
Sorry but I had to rant..........."Rather be a hammer than a nail"
Bob
Here in North Carolina, the Doctors have got together, and have lobbied the state legislature. There is now a bill pending, which will limit a plaintiff's award in medical malpractice suits.
The doctors are claiming that if they don't get relief from the insurance costs, they'll simply have to leave the state.
I wonder if builders and contractors could get the same kind of relief? After all, what's the difference between medical malpractice, and a contractor making a mistake? In terms of the liability, I don't see any difference.
Vast projects should not be founded on half vast ideas.
"..We're not doctors getting sued for millions, we're hands on hard working guys trying to make a living, in a high risk environment."
You don't think that there is a deck builder in Chicago being sued for millions?
Not trying to justify the insurance companies at all, but certainly amount of risk in construction.
And admittly not that of the medical profession, but then you are paying $50,000 - $100,000 or more either.
Bill,
I doubt that whoever built those decks in Chicago is getting sued. I would guess the building inspector that signed off on the inspection or the City that hired him, has more liability than the builder.(another reason for permits)
I would hate to be that builder however. How could you live with yourself knowing you were partially to blame for anyones loss of life?
No argument from me on the risks of construction, but how is it that many of us that have never filed a claim because of good safety practices, are penalized by an unprecedented note that says we are Canceled?
That's BUNK!
"Rather be a hammer than a nail"
Bob
I'm usually one of the last ones defending insurance companies, but I think that with all these unnecessary lawsuits they have to cover themselves, too.
In yesterday's NJ paper, there was an article about a contractor that took people's deposits, either did crappy work or no work, and has now disappeared. In one case, he tore down a couple's entire house, promised to rebuild a new one, and took off with $124,000 of their money. He has been accused of taking more than $218,000 for unfinished jobs since 2001.
At some point, I imagine the insurance companies will be getting involved to settle things.
And our state government thinks building/remodeling contractors don't need to be liscensed in NJ ( but that's a whole 'nother rant)
How would licensing have prevented that?
Maybe I'm just an optomist ( or a fool ), but I think being liscensed would help thin out the incompetant and unscrupulous by having them prove some level of expertese, or at least make them work harder for their ill-gotten gains.
Maybe I'm just an optomist ( or a fool ), but I think being liscensed would help thin out the incompetant and unscrupulous by having them prove some level of expertise, or at least make them work harder for their ill-gotten gains.
I'd say you're an optimist if you've never worked in a state that had licensing, and a fool if you have and didn't realize it was a waste of paper.
I worked in Las Vegas for 5 years, and Nevada is second only to California in the overly excessive licensing requirements for contractors. Even with all the paperwork, screening, testing, bond requirements, and insurance requirements, the fly-by-night, half-azz contractors were still everywhere. Some were licensed, and just smart enough to get away without getting into trouble with the licensing board, and some were unlicensed, and able to get away with it because the board was too busy handling frivilous claims by homeowners.
The testing was a joke. There were a half-dozen "schools" where you paid a few hundred bucks, and they basically spoon-fed you the answers for the test- or you could just buy the test prep book, study a bit, and pass. It didn't mean you knew jack$h!t about running a company, estimating, etc.
The licensing board's claims procedures let a homeowner file a claim because a casimg miter opened a hairline, tie up your final payment until a hearing was held (around 6 months), prevent you from going in to fix it, and then not pay you anyway even after the board's investigator found nothing wrong. Great system, huh?
And god forbid YOU filed a claim against a homeowner! There was nothing they could do to protect YOU as a contractor- the very people who were paying their salaries with your license fees.
So, do I think we need licensing here in NJ? I'm all for it- but not under those methods. I'd like to see a required course, similar to the real estate courses- taught by pre-certified instructors, and covering the essential topics to survive in business. I'd also want a requirement of a verifiable number of years of experience, reference checks, and a background check. And don't give me 150 classifications like CA and NV- I don't need one license to hang trim, and one to paint it- just a few reasonable classifications so that the guy qualified to perform handyman work isn't bidding on 5-story office buildings.
OK, enough ranting.....
Bob
Yeah, my only experience has been in NJ.
Its good to hear other view points on this. I just wish there was some solution to get people to respect those in our trade as the professionals we actually are ( and eliminate those who aren't professional).
I guess I am an optomist <G>
Edited 2/12/2004 7:05:19 PM ET by Shep
Bob,
Some companies have been hit with some huge judgements. EIFS or synthetic stucco and mold are two biggies. All the crappy houses that have been built in the last 15 years are liabilties. I think the greedy lawyers are to blame. If you think insurance companies are making fistfulls of dollars buy their stock. I wish I could buy some lawyer stock!
Down on the rainy bayou,
KK
Edited 2/11/2004 6:26:25 PM ET by kkearney
That's funny! I thought we were buying stock in the insurance companies. Stock with no dividends, pay as you go, nowhere to go, but up............
We pay whatever they want, to cover whatever onetime misfortune we may have, to be canceled forever.
Sounds like a great plan.................where do I sign?.......:-)
"Rather be a hammer than a nail"
Bob
I'd say 20% blame on the insurance companies ...
80% blame on all those dumb a$$ juries awarding millions for spilled coffee.
I had to talk to my Erie agent a coupla months ago .. said my rates shouldn;t go up ... no mass cancellations ... said lotsa had to do with the ins companies losing on both investments and claims after 9-11.
Turns out I got lucky and Erie didn't insure heavily in NY state.
They all still suck though. Hate them as much as banks ....
Jeff
Buck Construction Pittsburgh,PA
Artistry in Carpentry
>said lotsa had to do with the ins companies losing on both investments and claims after 9-11
But that would not be the result of juries. At this point, I'd switch your 80 and 20.
I like Erie, too....at least until it's my turn to get screwed by them. Have had them for a long time.
ps. Still don't have health ins.......@#%#^#%@#%^ Through her job, dw qualified for it 1/1. But managers didn't get her the forms in time, so missed that month. Then they gave her forms that were superceded by other forms, but she was told too late to hit 2/1. Now forms sent, and we'll see how they cause us to miss 3/1. Trust me that if we had a claim before then, I'd be having words with someone there about their.....interesting....management style.
Isn't "insurance ripoff" kind of redundant?
It is my understanding that low interest rates are another major reason for increasing premiums. Since the ins. cos. invest premiums in low and and moderate risk vehicles, low rates have severly hurt their ROI.
Now, that being said, I am not defending them. The worst part is the publicly traded ones that are doing it to prop up earnings and revenue numbers to impress the short term market.
It is my hope that a combination of legislation and free market forces will provide a viable solution to this problem. What will that solution look like? No clue, but something will happen.
And lastly, we may all learn that it is insurance that leads the way for inflation. All of us and all companies are affected by insurance in many aspects of our lives. . . when fixed costs go up, and there are no more productivity gains to be had, prices must rise.
That's just my armchair economist 2 cents. . . .
I'm in Oregon. In Business 10 years, a small G/C, build one or 2 custom homes per year and some small remodels on the side; no claims with the same Ins. Co.
Got dropped this year....and felt lucky to find another Underwriter and felt it was a "gift" with "only" a 460% premium increase. (Quotes from 2 other companies were 800% and 1500% increases).
I read through this thread and see all the common theories, i.e., EIFS claims, mold, 9-11, weak stockmarket and low interest rates depleting Ins. Co. reserves, etc.
Well, even my agent can't get a straight answer. I tell him, "So send one of those pinheads out to my jobsites and verify that the sites are clean, safe and best practices are employed!" But I'm not even allowed to speak directly to the underwriter....
This whole Insurance thing is baffling....the problem in the medical profession makes no sense either. Studies have shown that malpractice claims and awards are DOWN and I would venture to guess that the same is true in construction (though I have no data to back me).
One local builder here who commits the cardinal sin of developing and building half a dozen tract homes a year....has never had a claim....his premiums leaped to $75K per year!
Can you imagine trying to get started as a builder, with no track record?
thanks to you and all of you for the input. Notchman and scrapr thanks for the help, being inthe same state Oregon, and getting info on your agents.
Not completely related to the topic, well I guess it is.
last night I stopped at a friends house, his neighbor a few buildings down I had bid a job for weeks back after all the ice storms
didn't get it
hired an unlicensed, uninsured "handyman" to do some roof repairs, no contracts etc.
guy fell off the roof and broke his ankle, his helper had to drive him to hospital
owner did not know until helper came by to see if they could get paid for up to where they left off so they could get some drugs (pain killers etc, yeah sure.) Yard is full of debris, roof section only covered with tar paper
a neighbor of the neighbor told my friend that the neighbor just got a letter from their attorney, didn't tell my friend all the details, but my friend said his neighbor is shi*in' bricks
bet he got a good deal on the roof repair
When medical malpractice premiums shot up, it had nothing to do with the rate of lawsuits or the sloppiness of doctors, and everything to do with the fact that a lot of ins co investments had gone bad.
There are few other industries where you can so easily stick it to your customers if you make bad decisions.
Not that its an 'industry' but the state and federal goverments are experts at sticking it to the tax payers when they srcew up.
Yeah, but at least there you have SOME control over who does the screwing up.