As many of you know I do primarily lite remodels and repairs. Kind of a glorified handyman service.
We do some occasional insurance work, small stuff usually under 5k. I usually mark it up 10-15% because they are slow to pay but other than that it has worked out ok over the 5 years I have been in business.
Just got off the phone with an agent. I looked at two ceilings that both have press board 12″ X 12″ tile stapled on them. They both have minor water damage. For the 10′ X 20′ in a kitchen that needs sealed, caulked and painted I priced $650. For the living room 14′ X 22′ it needs the same but with a half dozen tile replaced. I priced it at $850.
She said the best she could do was $213 on one and $343 on the other. Now I know my area has a lower cost of living than most places and our prices are generally lower but can anyone show up, pay for materials, pay labor and make money painting a kitchen ceiling for $213!? I told her she needed to call someone else. She acted surprised and tried to explain to me why it was a fair price out of her Johnson manual. I chuckled and said I would be broke in 90 days at those rates. DanT
Replies
Hang tough. Top reason for going under is not charging enough for your work.
Keep selling, sell quality, sell reliability and stay away from the cheapskates...they life their life on someone else's act.
If you make your living working for half price you'll have plenty of work...but no money. Stick to your guns. When she calls you back tell her you forgot to include something AND you'd be willing to knock off that 10% for prompt payment
DanT:
Having been the rep on the other side of the phone - I am very familiar with this. I am sure you know this already - but for the sake of the thread - I will give my 2cents worth. This woman is probably very inexperienced and has never left the office. We often had problems with small jobs such as the ones you describe - as the estimatics app usually does not account for small jobs. With everything being broken down by SF - they punch in the numbers and run. I am sure that if this was a commercial space and you had 3000sf of similar scope work to do their sf number would be much closer to reality. There is no consideration for the basic cost of getting there/setup/etc. that in the case of this job is almost as much as the labor/materials for the project.
In her defense (sort of) she has been told by her manager that she cant deviate from the fair value - which she reads as the number quoted by Johnson. In most cases like this - an experienced adjuster can take your submitted estimate and justify it based on the size of the job.
Frank
I assumed this might be the case or a similar senario. Like I said we have done a number of these type of jobs and usually they are about making the customer happy vs getting the best deal because of there small size.
I did have one adjuster from State Farm ask me for my cost and profit break downs on an $1800 job once. I told them to forget it. I wasn't going to send faxes back and forth and discuss price and cost on a job where I stood to net $400. She was irritated too but as I told them both, I can stay home for free and at least the TV and my favorite chair are there! DanT
Small insurance work will drive you nuts.
Nationwide once wanted to pay me $19.00 to remove and dispose of 400 cubic feet of wet blown in insulation in a 4/12 attic with max head room of 36" down to nothing. I was insured by them at the time so I called my agent to see if he'd be interested in the job cause I'd be willing to sub it out to him for $25.00 and take the loss.
I work for homeowners and get paid to fix it right. If they want to deal with adjusters be my guest, cause I ain't doing it.
Dan.
For small jobs like that you can charge
for min.repair and service. (flat fee) $250.00 for each room.
Plus the sealer coat,plus the 2 coats paint and yes, plus debri removal.
And plus 10+10. (profit and overhead).
If you prepare your estimate the right way, you get your price.
And the insurance agent will have no problem with it.
Oh yes. I forget the moving and reset furniture.
Is been a long time.
YCF Dino
Edited 6/2/2005 8:00 pm ET by YCFriend
I will give that a try next time. I do think that Frank called this one right just due to the way the conversation went. But I will give that method a try on the next one. Thanks. DanT
Yes. Frank is right.
the reason they can not pay more is probably cause the CEO makes $20 million+
wain got it right also.
You should have told her that she must have skipped a page because that was only the cost for materials and that you need to be paid for labor too so get back to me when you figure out where your mmistake was...
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Not long ago I gave a proposal for removing water damaged 12" tiles and installing drywall in its place. The adjuster called me and said the proposal wasn't changing the tiles out and he couldn't compare apples to oranges and proceeded to harrass me into giving a verbal estimate how much changing out the tiles would be. He used that to justify not paying the claim (below deductable.)
After he hung up I realized how much I had overlooked and it reaffirmed my resolve to, a. never give verbal estimates to anyone, and b. never to talk to another adjuster. Mia culpa for letting the guy brow beat into submission, and I lost the job because of it.
I learned that one the hard way also. I am terrible at off the top of my head estimates. I always seem to price it as though all will go perfectly and materials will work out at the minimum. Since we do so many bathrooms I have a pricing sheet for most items in them and if someone wants a single item say a new toilet I can usually remember that price or will look at my sheet in the truck and that works ok but other than that I always price after I think it over, alone! DanT
Pricing sheet, huh? Now there's a novel concept I don't see often enough....lol.
Bob
That price sheet has been invaluable. I thought of it one day while doing an estimate and wondering if there was a better way. I thought and thought and thought. Finally it dawned on me. Frankly I amaze myself at the things I dream up on my own. If I could get a patent on it I would. Man, am I a smart guy or what?
:-) Thanks again Bob. DanT
One thing a price sheet does for me is to make me stick to it! I can't go quoting all different kinds of prices
I don't do alot of insurance work but the three or four times I have I've managed to get the adjustor to bump up thier prices. They have a detail sheet that they give to the client. If you get your hands on it you can use it to blast away the ln ft/sqft estimate they use.
Insurance repairs makes up the bulk of what I do for a large firm. I've got to deal with this on a daily basis. Fortunately, we are an 80 year old company with a great reputation, so that helps. The insurance industry is trying to make life easier for adjusters and agents by giving them pricing guidelines to settle claims. Today, most of this is software based. Two examples are:
http://www.xactware.com/
http://www.simsol.com/
The software is an effective tool to help the claims people if they are trained properly to use it. In your case, the agent looked in a book which said that sealing and painting ceilings is worth 0.65 per sf. Is that adequate ? Depends on a lot of factors, the key one here is the size of the job. That's where experience of the adjuster comes into play. It sounds like this agent was a rookie. Agents generally don't handle much claims adusting. Usually they tend to get a little better trained after an influential insured flames them after a similar situation as yours.
Is the job worth $1500 ? I guess that has to be your call. From what info you gave, I wrote it at $1200-$1300. That's where the game begins. How much time do you want to spend haggling over the money ? It's your business, so you get to pick and choose. For me, it's a way of everyday life.
A few notes:
In insurance repairs on your estimates, overhead is 10%, profit is 10%, non cumulative. (total 20%) This is standard.
Homeowners should not be making $500, $1000, or even $1500 water damage claims on their homeowner's insurance. The industry is changing. Doing this can get your rates increased and can make it difficult to get insurance on subsequent property purchases.
carpenter in transition
"Homeowners should not be making $500, $1000, or even $1500 water damage claims on their homeowner's insurance. The industry is changing. Doing this can get your rates increased and can make it difficult to get insurance on subsequent property purchases."And they should have $1000 (or more) deductable.
tim... the standard allowed in all of our insurance work is 15 % + 10 % ( 25%)...
maybe it's a regional thing... anyways, i've never had them question the 15 & 10... matter of fact , i got those numbers from an adjuster about 25 years ago..
the companies that specialize in insurance work will account for every nai ,every tube of caulk.. every item remtely connected to the job..
i think it's some kind of game between the adjusters and the insiders...
the insiders get the same bottom line price that i do.. but they can justify their price to the adjuster with their spread sheet.. ie: they are both taking the same language
i've had a lot of luck with my homeowners standing firm as long as they trust my bid..
and you're right on about homeowners should not be filing claims for small jobs.. they are leaving themselves open to cancellation or non-renewal in the current insurance climateMike Smith Rhode Island : Design / Build / Repair / Restore
15% and 10% wow, you lucky dog. years ago (many and before my time) we used to do 10% + 10% + 3%, I forget what the 3% was for. back then, probably drink ice.
anyway, my son interrupted me here by hitting me over the head with his baseball glove (hint hint) and I lost my train of thought !
if you and the adjuster are hitting the same bottom line number, then you doing the job should be no problem. the adjuster can submit his own detailed estimate with your proposal as back up. I am assuming that you are not providing the typical insurance proposal with all unit costs broken out.
Some problems can spring up when the adjuster can't write his own numbers and he hires a contractor (like us) to write the estimate as comparison to yours. Homeowners often bail with their original guy for various reasons. Usually because the original contractor has no interest in learning the required estimate format for one job.
I've found as contractors in this business, you're either in or your out. We've been doing it over 80 years so we're in.
If you email me your fax, I'll send you some stuff if you're interested. carpenter in transition
i'm always interested... but not in the question of actually pursuing insurance work for the sake of insurance work..
i only come across it when my customers call me..
they want me to do the work .. and i can usually justify, by detailed estimate, enough costs for everyone to justify the number
my experience jibes with yours... companies like yours , on the inside , get all the referral work.... i only get it when my customers bring me in.. which is fine with me
now.. go play ball with your kid... it's more important than what we're talking about.. for sureMike Smith Rhode Island : Design / Build / Repair / Restore
I appreciate the insite. I agree that this issue shouldn't be a claim as it was really caused by a poorly installed roof. But of course thats not my call.
As far as the hagling issue. I would consider dropping 10% maybe but I doubt it as I am now booked 2 months out and the phone is still ringing. No need to give at the moment. Thanks again. DanT
DanT,
all I can tell you is if you handle it right----the insurance company is NOT your customer.
The HOMEOWNER is your customer---that's who you sell to---not the insurance company.
where the Homeowner gets the money to pay you is HIS business
how MUCH the insurance company is willing to pay is irrelevant---and as you know has NOTHING to do with what YOUR costs are.
Be polite with the adjuster---but spend the bare minimum of time with them----and don't break down costs or time for them-------that's the wedge the claims adjuster uses to pry your butt cheeks apart
the claims adjuster is not your friend and his interest is not YOUR interest.
I am VERY glad to see you are dealing with them from a position of strength( 2 months work booked)
More power to you!!!!
Stephen
Edited 6/4/2005 5:39 pm ET by Stephen_Haz
Hadn't thought of it in that manner either. Funny, here I thought I had all the answers and now you guys bring up some different points of view. I think I am gonna end up with a complex.
Good points. I will take that approach in the future.
The interesting thing is this winter when we were slow I had a regular customer who lives in a retirement mobile home community that had the heavy snow collapse their awning. On that one the agent just said get it fixed. I ordered new panels. Even let the manager of the court order them and charge me 15% extra because he had cancer and I felt sorry for him. I marked the job up an extra $500 because we worked in the cold and the insurance company would take for ever to pay.
End result? $3600 bill to the insurance company, made $1400 on the whole deal and took about 10 man hours including the order process. No one batted an eye. Thanked me for taking care of the client so quick and painless. Ahhh, who can figure it? DanT