American Family Manipulation of Xactimate Pricing


#1

Has anyone else run into American Family starting to manipulate the unit pricing of Xactimate? They now split the Material and Labor portion of the Replace line item. When they do this they cut out $35-$45 per square. They also have a Material price that is less than what I pay and claim that their 10% waste includes the Ridge Cap and Starter Strip. They are now 20% below the standard xactimate pricing in our area. Is there any success from contractors in getting a legitimate line item xactimate estimate approved? Because I can’t get them to budge on anything, and it makes the jobs not even worth doing in our area.


#2

This may be connected to a preferred vendor program such as MadSky. Have the homeowner call and demand they approve the standard xactimate pricing for their claim. If that doesn’t work, take it to appraisal. You should investigate assignment of claim and limited power of attorney.


#3

I use Xm8 every day. The split of labor and material should not change the overall R&R cost. If you or someone you know has Xactimate I would compare their pricing database to what AmFamily came up with.

Years ago my dad taught me the 10% waste for gable 15% for hip and I promise it worked but remember, back in the 60’s so many homes were simple straight ranch style, nothing chopped up. Carriers don’t want to turn loose. It wasn’t long ago that even Xactimate did not have separate line items for ridge or starter because you were using regular 3 tabs for that.

Do be careful with appraisal. If the 2 appraisers cannot agree on an umpire and it goes to court, you either have to hire a lawyer to petition the court or do it yourself. Some Courts don’t care for an individual who is not a lawyer trying to approach a Judge…and remember you can’t necessarily select the judge you want. In larger cities the Clerk of the Court disburses the cases to each judge. Some Courts will say you must file a “friendly” lawsuit in order to notify the other party of the petition. Some Judges have never heard of appraisal or umpire. I’ve seen petition for umpire lay on a judges desk for months before he gets around to it…and you must let the owner know that if it goes to umpire, they have to pay 50% of his bill.

On the problem you brought up, I would get the owner (not you) to call the insurance commissioner’s office. That ALWAYS gets the attention of the Carrier. Most claims managers want a complaint to the insurance commissioner to GO AWAY!


#4

Hi All,

…Also the whole Home Depot pricing thing is garbage. You can pull Home Depot’s pricing right off thier website for your area, and clearly AM Fam is way low. I saw a 3 tab 25 YR today at 72 a SQ from Am Fam. Nobody even uses a 3 tab anymore. Not to mention the one I can still get, is 81 a SQ.

As far as State Farm goes, they are required to work inside certain Xactimate guidelines. But because Xactimate is the way it is, there are comparable line items that cover the same scope of work, that are more expensive! The adjusters are allowed to approve these items because they are not on the list of not approved items. Example - Pressure wash is a no with SF, but clean wood exterior is a yes.

The reasoning is at one point a SF customer, power washed his own deck at a super high pressure and scored the shit out of it. He held SF accountable. Cleaning wood by hand could not cause any damage they would be liable for, when a HO tries to do it themselves. This is how a lot of adjusters try to justify thier pricing as well…Like the Home Depot thing.

premiumexteriors,

I will also not compromise quality, and only charge deductibles for our clients. The only thing you can do is be prepared for a drawn out process, and make sure all involved are aware of that. That is the only way to make sure everyone who deserves to, benefits from the result.

If anybody has come up with any other tactics please share.

  • Sorry, it made me edit an old post since I’m a new user.

#5

I also use Xactimate everyday and deal with multiple carriers at a time. From what I can tell yes, American Family is using a price list that is not verified by Xactimate. And I have been unable to get any solid information from them regarding thier preferred contractor program. You can at least call MadSky and verify the pricing.


#6

As far as waste percentage, simply use the roof waste calculator workbook I developed. Free of charge, check out the link in the Roofing Business section. 10%/15% is rarely enough, only when the gable is 2 slopes and the hip is 4 slopes. Xactimate has had separate line items for cap and starter for as long as I can remember.

If you don’t have experience, contract a competent, experienced appraiser (or PA) to work through the legal matters.

I’m sorry BigLouie, in most States, the insurance commissioner nor the insurance company cares much if a Homeowner calls.


#7

Thanks guys. I have a lot of experience with xactimate and insurance work. I discussed this with American Family and they do use a preferred vendor 3rd party program for their pricing. A member of my sales team told me one of their desk adjusters told him they use shingle pricing from Home Depot…Crap Timberlines made specially for a big box store. If we were all about margins on insurance, we would provide a low end material, but I am a Certainteed/Atlas guy so we are paying $20 more per square than the home depot pricing for Timberline in our area. I will never compromise quality for margins, that is why we have long term customers. This is cost I eat as our subject to agreements make sure the homeowner is responsible for their deductible and nothing more. I truly believe we sell more jobs because of this, and the money we would save by offering cheaper product and increasing margins is less than what we make because of our quality induced quantity of jobs.

As far as the waste, I always calculate 10% waste (15% on hips) and I know this is waste that is actually used up in shingles. It does not account for ridge cap and starter strip as AmFam claims it does! Also, now they (and State farm too, namely CAT Team 66), have begun to put in their estimates that they are not replacing roof edge, plastic vents (if there are no holes in them), and anything else necessary to CORRECTLY replace a roof if they are not physically damaged by the hail. On top of this they have not been including line items for ice barrier and valley metal codes! I have seen 4 claims in the last month from State Farm/AmFam that look like this:

  1. Remove laminated…
  2. Replace laminated…

That’s it…fricking pathetic guys! Way to take care of your customers. This is way too much cost to eat so then we have to talk budget with homeowners on a job that should be 100% paid for by the insurance company.


#8

You have a lot of experience with Xactimate and insurance work yet discuss these problems as if they’re new? Supplement. Use to Homeowner to change the scope.

If you know so much, why are you here asking? You don’t need any help. Good luck to you.


#9

Hi All,

A couple things,

The success I have had: Am Fam cannot verify thier preferred contractor pricing. The best way to work around this issue with them is to involve the agent. All of the AmFam agents I have spoke with about this cannot recommend a preferred contractor, some where not even aware of a prefered contractor system in place. When the client and agent are aware they can make a change by raising a stink. The HO is pissed because they pay 100% of thier premium and are only getting 80% of thier RCV compared to other providers, agents are pissed because they stand to lose a client because of it.

Avoid the situation in the future by telling future clients: 1 - Process is going to take forever dealing with thier provider. 2 - Be aware all other providers are at an industry standard pricing except theirs. 3 - If some kind of preffered contractor system does exist, the quality and guarantee of workmanship has to be crap do to the excesive slice in price cost.

My only conclusion is that AmFam is intentionally trying to price themselves out of markets they consider un-profitable. They are forcing HO’s to drop policy’s due to unreasonable pricing, when they realy should be considered Bad Faith Claims. but who has the time, money, or resources to battle a corporate ins. empire.

Also the whole Home Depot pricing thing is garbage. You can pull Home Depot’s pricing right off thier website for your area, and clearly AM Fam is way low. I saw a 3 tab 25 YR today at 72 a SQ from Am Fam. Nobody even uses a 3 tab anymore. Not to mention the one I can still get, is 81 a SQ.

As far as State Farm goes, they are required to work inside certain Xactimate guidelines. But because Xactimate is the way it is, there are comparable line items that cover the same scope of work, that are more expensive! The adjusters are allowed to approve these items because they are not on the list of not approved items. Example - Pressure wash is a no with SF, but clean wood exterior is a yes.

The reasoning is at one point a SF customer, power washed his own deck at a super high pressure and scored the shit out of it. He held SF accountable. Cleaning wood by hand could not cause any damage they would be liable for, when a HO tries to do it themselves. This is how a lot of adjusters try to justify thier pricing as well…Like the Home Depot thing.

premiumexteriors,

I will also not compromise quality, and only charge deductibles for our clients. The only thing you can do is be prepared for a drawn out process, and make sure all involved are aware of that. That is the only way to make sure everyone who deserves to, benefits from the result.

If anybody has come up with any other tactics please share.

  • Sorry, it made me edit an old post since I’m a new user.

Maybe a little insight, with some well placed aggression.


#10

Hey guys, Same original Poster. New Name. Better Partner. The reason I started this thread is to document this practice in numerous markets.

It’s only gotten worse. They now have removed the line item pricing for the removal portion of all components stating: “You have to tear the shingles off and the rest by default has to come off with it anyways. Why would we pay you for it?”

Why do you force us to send in a line item estimate on software You developed just to pick it apart because it no longer lines up with your manipulation of the exact software you developed for the purpose of standardizing estimating?

Appraisal is almost never worth it. It is a negotiation usually settled for pennies on the dollar and the appraiser costs more than what the customer gains. The insurance industry is the largest lobbying group in the country and its a fundamental problem with the insurance law in our country. Only losing policy holders will make them change. It is finally happening in our area.

Though material costs have gone up 40% this year, American Family has further manipulated Xactimate. They now average around $260/sq on roofing claims, while our cost has grown to $250. I have initiated at least 35 roof claims for American Family customers this year only to have them forced into unlicensed chuck in a truck roofers and me putting in all the time for nothing. We now ask who insures our potential customers and turn them down if they have American Family. All of the independent adjusters I know are also dropping them from their clientele. The last claim I got bought the adjuster was paid $60 by AmFam!


#11

Get a PA who has an attorney they work with. Take it to the Attorney. Will take time, but that is likely the only thing that will work with AmFam until somebody jacks them with a class action lawsuit.


#12

In Nashville years ago I had a problem with a carrier about pricing. The homeowner took it on herself to write a complaint to the editor on the Tennessean news paper. It got published and the adjuster and his supervisor was out within 2 days paying for any and everything I saw needed replacing.