Supplementing for xactimate Price increases


#1

I’ve been in the business for 5 years or so and have yet to run into this with the “bigger” insurance comapnies.

Generally, when I’ve filed a supplement for the xactimate price increases from…say May to June…the insurance companies have gone ahead and made the adjustment. It’s rarely a huge number and it certainly wasn’t in this case. Maybe $500 total.

The original adjuster called back with an incredulous tone in his voice. He was in near total disbelief that anyone would ask for price increases. He wrote his estimate using May11 xactimate pricing on May 24. I signed this customer on Wednesday…nearly July. As we all know prices are going up monthly. And as we all know xactimate isn’t exactly “make you rich” pricing but at the end of the day I’m fine with it’s pricing…generally I can get a 40% deal on xactimate pricing.

Anyway, he came with the line “I haven’t had ONE roofer in that area calling and asking for THIS!”

My response was “First of all I don’t know if that’s true and second of all I’m not really concerned with what other roofers are doing. YOU guys choose to use xactimate and I am fine with that. I just want to use CURRENT pricing when the job is to be done…not what pricing was when you first came out. YOU tell them they have 180 days to get the work done. So when materials prices increase in that time frame either I or the customer have to eat the difference?”

Response? “NO other roofers in that area have called about this. I am going to have the customer get a different estimate!”

Me: “They have a contract and they won’t be getting other ‘estimates’. I’m just asking you to pay a fair price based on xactimate. The house you go to TODAY next door you are going to use JUNE’S xactimate, aren’t you?” Brief silence and then “That contract means nothing. There are other roofers in the area that will work for what we pay!”

Called his “boss” and got the same combative b.s.

It’s not the end of the world…I can make this work but I’ve got a LOT of customers wanting to wait until “hail season” is over before getting their roof done (I keep asking when that is and none of these crack meteorologists quite has an answer for that). So most of these adjustments happened in may and I’m going to have to absorb 2-3 price increases by the time many of these people want their roof done.

Just venting


#2

That’s frankly ridiculous. I’d escalate this to his Manager’s Manager. I’d also ask the HO to get involved. It costs them little for you to vent here at roofing.com and it also puts zero money in your pocket. You need not accept this, keep pushing.


#3

As expected the prick called the homeowner and suggested to her that she get other “estimates”.

I again explained the process to her and assured her she wouldn’t pay one red cent over her deductible…and no matter how this is resolved she won’t. In the end…IF amfam doesn’t pay the increases I will just have to eat it myself.

Most of the adjusters I’ve met over the last several years have been fairly cool. Seems to be an increase in the number of a-holes lately. I’d understand their angst if someone was trying to truely screw them and invent numbers…I’ve never been accused of “nickle and diming” by using xactimate prices!

As for “keep pushing”…I will. And on these roofs I’m sitting on until “hail season” is over I will make sure I prepare the customers by advising them that there have been at least a couple price increases since their adjuster was there and that I will be filing for them. I always let customers know I will be filing for whatever but I will REMIND these particular people so they understand BEFORE they get another f-ed up call from an adjuster.


#4

And then you get a nice and cheerful call from a state farm adjuster that approves a second row of ice and water by, in her terms, an “inch”. I know State Farm gets a bad rap from some on here but if I had an endless stream of nothing but state farm I’d be one happy roofer. Always found them to be consistent and fair.


#5

State Farm has to be teaching their adjusters to do this.


#6

Great. Fortunately haven’t run into this with them yet.


#7

Here’s a little bit of a different perspective. The insurance company owes for the repair cost at the time it happened.

Let’s say a loss occurs on April 15th, policyholder turns in claim promptly and insurance carrier gets there and settles the claim by May 1st.

Let"s say the homeowner signs with a roofer who is backed up for 12 weeks. There are other who could have serviced the property immediately.

In that time frame, there are price increases. Should the insurance carrier pay these increases.

Better yet, let’s say the homeowner ges on vacation, wants to wait for some reason? What then?

Frankly, in this situation, what was the material cost for the existing shingles at the time they settled the loss? If it is more, get it in writing from your supplier and one would think that they should supplement the difference. Unfortunately, you’ve a time lapse involved where the insurer couldmholdmtheir ground.

It’s probably not the smartest idea,but, you are dealing with one of the more difficult carriers.


#8

[quote=“jtdew”]Here’s a little bit of a different perspective. The insurance company owes for the repair cost at the time it happened.

Let’s say a loss occurs on April 15th, policyholder turns in claim promptly and insurance carrier gets there and settles the claim by May 1st.

Let"s say the homeowner signs with a roofer who is backed up for 12 weeks. There are other who could have serviced the property immediately.

In that time frame, there are price increases. Should the insurance carrier pay these increases.

Better yet, let’s say the homeowner ges on vacation, wants to wait for some reason? What then?

Frankly, in this situation, what was the material cost for the existing shingles at the time they settled the loss? If it is more, get it in writing from your supplier and one would think that they should supplement the difference. Unfortunately, you’ve a time lapse involved where the insurer couldmholdmtheir ground.

It’s probably not the smartest idea,but, you are dealing with one of the more difficult carriers.[/quote]

In your same scenario lets say the carrier makes an offer of settlement that is then rejected and a supplement is turned in and then refuses to make appropriate adjustments. wouldnt it then be on them to have to pay for the repairs.

BTW almost every settlement offer I have seen give you a year to make the repairs. Alot can happen in a year…It also sais “if you cannot have the repairs completed for the repair/replacement cost estimated, please contact your claim representative prior to beginning repairs.” If they are stalling or not accounting for items that are their isn’t that unfair claim settlement practices?

They are all manipulating the software to underpay. Firemans fund is the only exception I have seen in the last 3 years.


#9

[quote=“ALLTEX Roofing”][In your same scenario lets say the carrier makes an offer of settlement that is then rejected and a supplement is turned in and then refuses to make appropriate adjustments. wouldnt it then be on them to have to pay for the repairs.

BTW almost every settlement offer I have seen give you a year to make the repairs. Alot can happen in a year…It also sais “if you cannot have the repairs completed for the repair/replacement cost estimated, please contact your claim representative prior to beginning repairs.” If they are stalling or not accounting for items that are their isn’t that unfair claim settlement practices?

They are all manipulating the software to underpay. Firemans fund is the only exception I have seen in the last 3 years.[/quote]

Hey Alltex:

I’m not quite sure what you mean by “appropriate adjustment”, but, let’s assume that means that they missed something or there is a material pricing issue.

Anything they miss, they should pay for plain and simple. The only caveat to that are code issues, because the underlying insurance policy will need to have “code” upgrade coverage. If it doesn’t then they didn’t miss it. Pricing issues should be pretty simple, the cost of shingles is off, show them the supplier invoice.

What this thread puts on the table is that a policyholder has a check in hand, but, wants to wait to do their repairs. Then, the contractor that they chose after sitting on the check wants more money because of legitimate price increases.

In that scenario, I think that’s a difficult argument with any insurer for a supplement. There are always going to be exceptions and you have to look at things on a case by case basis.

If I total my car, but wait a year to replace it, do they owe me more money if the cost to replace my car rises? If you put an order to buy a truck load of shingles with one of your suppliers today at $75 per square for shingles and they sit on the order; should you pay the increase when truck arrives?

If by some miracle, pricing drops, should the insurance company get some money back?

The one year clause in the insurance policy pertains to only to recoverable depreciation and the time frame that you can recover. It has no bearing on any costs of the claim.

You mentioned Unfair claims practices and that is such a ubiquitous term. What does it really mean. They are so different from state to state.

If you and I disagree is it an Unfair claim practice? Certainly not. There are standards in place, but, if you get a hurricane or catastrophe, those standards get loosened simply because man power is always limited.[/quote]


#10

I agree with Alltex here in the New Orleans area we are having hell with state farm im having to report them to the insurance commisioner on each claim to get them to pay for drip edge and vents,O&p is intentionally omitted from these claims and thier fighting hard not to pay it.


#11

jtdew, how about the realistic scenario. Have you ever read the instructions on the statements of loss you send out? How about all the ones that say something to the effect “blah, blah, blah … please contact your claims representative before proceeding with the repairs.” In this case, I believe the adjuster inspected the house on May 24. Want to bet the Homeowner didn’t even have the scope of loss before June 7? What if the check was issued with both the Homeowner’s name AND the mortgage company on it. Even if things went well, the HO doesn’t have a penny in their hands until July 1. Perhaps you can put a scenario together for how the HO or Contractor are responsible with these scenarios?

Now just suppose the insurance adjuster under estimated the scope of loss (yeah, they never do that do they?). Remember that part about if your bids are higher than the amount allowed by the claim, please contact your representative before proceeding? Let’s say the HO and Contractor are naive, it is June 15 with a major price increase in roofing materials pending June 18. They make the very stupid decision to TRUST their insurance adjuster/company to do the right thing, they go ahead and purchase materials, replace the roof and then supplement. They send in the supplement only to find out it is DENIED. Now WTF do you do?

Why don’t you try calling one of the major insurance companies right now to discuss the under scoped claim provided by a CAT adjuster? After you wait 30 to 45 minutes MINIMUM, you finally get someone on the line to find out they don’t handle that particular area. However, they PROMISE they will pass your call along and someone WILL be back to you within 48 hours. 3 days go by with no call, repeat scenario. Now you actually get someone on the line, they listen and ask you to fax your supplement in to the 1-800 toll free number and someone will get back to you promptly. 2 week go by and you haven’t heard a thing. You call again, wait 45 minutes, finally someone answers the phone, you inquire about your supplement and are told it was never received and isn’t in the file.

While all this BS is going on, 5 weeks have gone by and shingles have gone from $70 a square to $90 a square. You did everything instructed to do, you followed THEIR process and then get told to go flog your log by the hard a$$ desk adjuster.

Yeah, that sounds fair and reasonable to me.

What was your scenario again? You think I’m exaggerating? Call me tomorrow dude, I’ll give you you 20 claims where the exact scenario I described is happening. Since you seem to know how to fix this, I’ll give you the claim numbers and let you call and make things right.


#12

^
^
^
Burn!


#13

When you get off the phone with dad… call me. i have 20 or more you can fix of mine just like that too.


#14

jtdew,

I’m not quite sure what you mean by “appropriate adjustment”, but, let’s assume that means that they missed something or there is a material pricing issue.

[highlight=#ff0000]To say they missed something would be an understatement. What i mean by “appropriate adjustment” is one that includes any and all work that needs to be completed in order to indemnify the homeowner in the event they suffer a loss. There is no reason why i should be able to make supplements using the same price list and reach agreed settlements that add 3k to 15k to any claim.[/highlight]

Anything they miss, they should pay for plain and simple. The only caveat to that are code issues, because the underlying insurance policy will need to have “code” upgrade coverage. If it doesn’t then they didn’t miss it. Pricing issues should be pretty simple, the cost of shingles is off, show them the supplier invoice.

[highlight=#ff0000]I agree with you on part of this, however, in dfw the only policies i have run into that do not have the ordinance of law endorcement are trailer house policies. Never show them your invoice.[/highlight]

What this thread puts on the table is that a policyholder has a check in hand, but, wants to wait to do their repairs. Then, the contractor that they chose after sitting on the check wants more money because of legitimate price increases.

[highlight=#ff0000]Maybe the homeowner had a feeling the insurance company had underpaid. Maybe he or she took a few weeks to research companies. Maybe it took the insurance company 2 or 3 weeks to get the paperwork back to the homeowner. (i have personally had some customers who did not their paperwork for over a month.) I have claims from April that we have yet to install because the insurance companies are dragging their feet in reaching settlements.[/highlight]

In that scenario, I think that’s a difficult argument with any insurer for a supplement. There are always going to be exceptions and you have to look at things on a case by case basis.

[highlight=#ff0000]Case by case basis would mean the homeowner hired a contractor that bid the job using current pricing. If the homeowner has a replacement cost policy, the insurance company should pay what it costs to get the roof repaired based on the date of installation. Xactimate can be a double edged sword, Live by the sward die by the sword.[/highlight]

If I total my car, but wait a year to replace it, do they owe me more money if the cost to replace my car rises? If you put an order to buy a truck load of shingles with one of your suppliers today at $75 per square for shingles and they sit on the order; should you pay the increase when truck arrives?

[highlight=#ff0000]Depends on your policy, but the answer could be yes based on the policy provisions. The answer to your second questions is no, but that is not the same. You are purchasing materials in real time. The insurance companies are not, they are negligently underestimating and only releasing a portion of the payment due to the homeowner. It might be a little different if the insurance companies payed accurately at the time of the loss.[/highlight]

If by some miracle, pricing drops, should the insurance company get some money back?

[highlight=#ff0000]It is possible, somehow in Waco TX the per shingle price dropped $3.00 a sq from May to June and the final estimate ended up lower.[/highlight]

The one year clause in the insurance policy pertains to only to recoverable depreciation and the time frame that you can recover. It has no bearing on any costs of the claim.

[highlight=#ff0000]It is also a way for the insurance companies to regulate their customers. If a homeowner does not collect the depreciation, it triggers the underwriters to investigate the property and make demands of proof or repairs etc. I have seen one homeowner that was paid nothing because the adjusters estimate was below the deductible. They then sent out an inspector from underwriting and made the homeowner purchase a roof out of pocket.[/highlight]

You mentioned Unfair claims practices and that is such a ubiquitous term. What does it really mean. They are so different from state to state.

[highlight=#ff0000]Pursuant to the Insurance Code §542.003(a), an insurer engaging in business in this state may not engage in an unfair claim settlement practice. Not attempting in good faith to effect a prompt, fair, and equitable settlement of a claim submitted in which liability has become reasonably clear constitutes an unfair claim settlement practice under the Insurance Code §542.003(b)(4).

Your state likely has a simular code.

You are correct about this however, its hard not to be an unfair claim practices when you include the following email embedded in your estimate and they continue to not make allowances for items that you send in with photo documentation.

Ray,

Thank you for your inquiry. Xactware’s published pricing for roofing items is not ‘all inclusive.’ For example, items for roofing shingles (RFG 220, RFG 300, etc.) include shingles, felt, nails. As they are originally published in Xactimate pricelists, they do not include any cost or assumptions for hip/ridge, drip edge, valley or other roof flashing, pipe jacks, roofing vents, steep/high charges, sales taxes, etc. If needed, these items should be added or accounted for separately in the estimate.

Sincerely,

Structural Data Services
Xactware[/highlight]

If you and I disagree is it an Unfair claim practice? Certainly not. There are standards in place, but, if you get a hurricane or catastrophe, those standards get loosened simply because man power is always limited.

[highlight=#ff0000]It is not unfair claim practice for us to disagree. It is unfair to not include items that are there, it’s also unfair to only pay for replacement. How the hell do you replace something without first removing it?

You and i will probably agree on many parts of this business. This will have to be one of those issues that we don’t.

If the insurance companies want to start using their software appropriately at the time of the initial estimate my opinion might change.[/highlight]

[mod=“japoax”]edited this to remove harmful effect :wink:[/mod]


#15

my eyes hurt now :x


#16

:badgrin:

Sorry Guys, it didnt do exactly what i wanted it to do…


#17

Sorry Guys, it didnt do exactly what i wanted it to do…[/quote]

I have the same problem with my wife and children.


#18

Dude, you must become “one” with the -quote] and function… (remove the hyphen)

If we’re lucky, one of the absentee mods will come along & edit that up a bit. Wowzers; red highlighting, eh? heh


#19

I mentioned in another thread I had worked one that was 2 years old. These are the exact figures.

State Farm Initial: $12,193.95
My initial: $16,518.19

Final Settlement: $15,744.13

Increase: $3,550.18
O&P: $2,624.02

This one was 2 years old and the HO waited until a week before his time expired to call me back.

This is a copy of the e-mail I had sent to her prior to settlement:

[quote]Sara:

I have spent the better part of the day and half the night examining this. I have come down $744.06 on my final cost. My sub bid the work to me at $1,853.00. We just had a room painted top to bottom from another sub that cost us $485.00 and that was without any drywall work. The room was approximately the size of Mr. Homeowner’s dining room.

The cost is reasonable for this area. If you look at your painting line items they add up to $91.24. You figure $50.00 for 2 galloons of paint and you are painting 2 rooms for $41.25. That will not work. The only way to make this work is to use the minimum charges. I referenced the Craftsman National Renovation & Insurance Repair Estimator and their minimum charges are approximately the same as Xactimate. Itemizing these items simply will not work on this project.

I have worked with many adjusters, including State Farm adjusters, and have never had a problem with them paying our cost. I am a State Farm policy holder myself and I have read my policy and no where does it tell me I have to settle for a lower priced contractor. I have had a State Farm adjuster this Spring take my estimate and write a check on the spot for the amount of my estimate based upon my pricing, not Xactimate. I use Xactimate simply because it helps communication with adjusters. Xactimate will tell you themselves that their pricing is a mid-range price for any particular area and you can expect 50% of the contractors to be higher and 50% to be lower. You can read that for yourself in the Xactware white paper titled “Roofing prices within Xactimate.” The paper talks about roofing but it is just as applicable to all other trades as each contractor’s pricing is going to be different based upon their different business models.

This cost is the best I am going to be able to do and that is shorting my subcontractors around $400. With my current cost and your current estimate the difference is $540.99, or approximately 3.5%. It has been my experience with adjusters that if you are within 10% it is acceptable. Most of them I deal with write their estimate based upon mine.

It is now about 2:30 a.m. so it is not likely you will get me at 8:00 a.m. like you did yesterday. I will give you a call when I get in in the morning after you have had a chance to review this.

Thanks for your time.

Dave [/quote]

This all started when I submitted my initial estimate to SF and she called the homeowner asking why my estimate was so much more than theirs. She also asked him if he wanted us to do the work and he told her “yes.”

Gentlemen, it is not an easy or quick process but it can be done. The better educated you are in the overall process of dealing with these claims the better you will fare. Get educated, learn the rules and force them to play by them. They count on homeowner and contractor ignorance to short change homeowners.


#20

Dstew, is it reinforced from your commentary that this doesn’t seem so much to be a company wide thing as it’s an adjuster by adjuster situation?

I have an AllState claim for here in the Dallas area that came in @ 55k & can easily see this one going to near 100K.

Decra stone coated steel with split cedar shake underneath that… all the wall to roof deck joints are either stucco or brick.

Thankfully, I am lead on this one & I have a GC sub working under me; he’s been down the insurance road a time or three & will be working with me to write up the estimates in a manner that will prove our point.

I’m not expecting a fight but also don’t expect AllState to simply roll over & play dead.