Overhead And Profit - Roofing - Contractor Talk

Overhead And Profit

 
 
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Old 12-05-2010, 10:46 PM  
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Overhead And Profit


I am aware that in Xactimate, they do not include o&p in pricing, as stated in the white papers; however, I have an adjuster who has been stating that "Xactimate is 'retail pricing' and therefore, for one trade Xactimate allows for some monies to be made by the subcontractor trade, since the job does not require a GC." I already know how to combat the GC/one trade BS line they give, however, this is a first time I have run into someone using different verbiage "Retail Pricing"... wtf does that mean? And does anyone have an idea how to intelligently answer an unintelligent statement?

Right now it is allegedly heading up the ranks for clarifications because he may be incorrect in his “directive” from up above.

He comes back, I call his supervisor, I have already reported him and his company to the TDI for stating he does not pay o&p. It worked once before, so why waste time for him to get it right, rather report and place it on the records.

Any verbiage to answer “Retail Pricing” in Xactimate covers one trade contractor o&p?

Thanks for any help in this matter.

P.S. I just found this site and joined, thanks for having me…
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Old 12-07-2010, 12:50 PM  
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Re: Overhead And Profit


I think (I might be wrong) that the contractor is trying to quote his job using normal retail pricing. A price as if any HM walked in to get a price for a product. That way he knows his material is going to be paid for, then he can come back to you if he gets the job to talk about his price. Thats just my 2 cents.

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Old 12-07-2010, 04:40 PM  
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Re: Overhead And Profit


I'm not familiar with this, but let's see - Xactimate is a computer program telling anyone what the going rate for any particular work/job is. So far ok?

Why in the world would you go by what some program, which information was entered by who knows, to set your price?

I price my work one job at a time, based on the materials needed, estimated labour costs, my overhead and profit (percentage determined by you)

No way would I let anyone tell me what I need to be doing a job for. They've got it backwards, I tell them, they don't tell me.

Strange.
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Old 12-07-2010, 05:04 PM  
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Re: Overhead And Profit


Never heard that load of crap before & quite honestly it doesn't matter - because I would be replying back with here is my price, period & if you need to you utilize the Market Conditions area

The catch with Xactimate, especially with roofing is the first number is not what you would normally charge per square, it is when you add in the drip edge, ridge vents, base service charges, OH & P that you get close to if not right at what you would normally charge per square
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Old 12-07-2010, 05:05 PM  
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Re: Overhead And Profit


Actually I kind of like the idea, that insurance companies will pay a price and it is up to me to know whether I can do the job and make money.

But that is me.

As to the OP question, retail pricing is what the homeowners are paying, I think this adjuster is trying to pull one over on you.
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Old 12-07-2010, 07:03 PM  
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Re: Overhead And Profit


Construction Material sales are retail. Construction materials and labor are NOT retail.

Are you a retail store? Look up the word and ask them to define it.
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Old 12-07-2010, 08:04 PM  
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Re: Overhead And Profit


Quote:
Originally Posted by SLSTech View Post
The catch with Xactimate
... is that some a hole out there WILL do it for that price.
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Old 04-08-2011, 09:51 AM  
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Re: Overhead And Profit


Thanks guys for the thoughts, we have processed this to the TDI to see how that takes us, as it needs to be mentioned what tactics that Blake Ricks from USAA (work512-695-1250, [email protected]) is trying to pull. Besides o&p he states 3 trade rule for it and when you look at the Xactimate summary it shows Carpenter, Heating/A.C. Mechanic and Roofer. Is that three? or can I not count? Regardless it does not matter 3 or not...
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Old 04-08-2011, 12:24 PM  
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Re: Overhead And Profit


Quote:
Originally Posted by roofdoctortx View Post
Thanks guys for the thoughts, we have processed this to the TDI to see how that takes us, as it needs to be mentioned what tactics that Blake Ricks from USAA (work512-695-1250, [email protected]) is trying to pull. Besides o&p he states 3 trade rule for it and when you look at the Xactimate summary it shows Carpenter, Heating/A.C. Mechanic and Roofer. Is that three? or can I not count? Regardless it does not matter 3 or not...
"Dear Insurance Adjuster/P&C insurance company,

Retail pricing for insurance repair work is based on the real, true and accurate (RTA) price that a fully legal, licensed and insured professional contractor would charge to complete the work. As has been proven time and time again through legal discovery, court testimony and various studies, including studies done by several insurance commissioners over time, Xactimate pricing which you have implied is "retail pricing" is not real, true and accruate pricing but rather, below RTA market pricing based upon Xactimate's sister company's (ISO - Insurance Services Office, Inc.) calculations which are historically, substantially below RTA.

Insureds premiums are actuarially based upon RTA values so as to make sure that the insurer is able to earn a "fair" profit. Included in the insurance company's premium calculations is payment of contractor Overhead and Profit. Attempting to dilute the value of a claim by, first, attempting to under pay using Xactimate's lower than RTA pricing and, secondly, by attempting to improperly pay or deny Overhead and Profit is a blatant act of insurance bad faith (defined as dishonest or insincere behaviour).

Since premiums were paid based on full RTA, you should disregard Xactimates lower than RTA pricing and pay at full and proper RTA rates. Although P&C insurance is, for the most part, exempt from anti-trust rules, they (and you) are not exempt from their/your moral and ethical obligation to pay their claims as promised to insured's.

The well worn argument offered up by the great majority of P&C insurance companies that O&P is only due when two or three or more trades are involved ("requiring" the services of a General Contractor) is, at the very least, a misrepresentation. At worst, an outright fraud.

Premiums calculated at full RTA with O&P? Claims also paid at full RTA with full O&P. Simple.

As well, some adjusters/P&C insurance companies are occassionally demanding receipts from subcontractors as proof that they provided materials as well as labor to complete particular projects as a condition of paying O&P. Like the unsupportable argument that O&P is only paid on two or three or more trades, the sub-contractor "receipt" argument is without merit. It doesn't really matter who purchased tha necessary materials - the price is the price and the O&P is the same no matter what.

Both arguments are nothing more than arbitrary attempts by insurance adjusters/P&C insurance companies to pay less than promised. Also specious is the argument that O&P should not be paid to an insured who decides not to hire a contractor but rather, decides to complete all repairs themself. If the RTA on a repair job is, for example, $30,000, and the insured paid premiums calculated on full RTA prices ($30,000) including O&P, the insured should still be paid full O&P.

While I appreciate the conundrum you find yourself in, you do indeed have a legal, moral and ethical obligation to do the right thing. Not doing so could prove troublesome for you. As the duly appointed and authorized agent of the insured as their contractor of choice, I also have a legal, moral and ethical obligation to do the right thing for them which is to make sure that they are paid full RTA on their claim.

With that in mind, I strongly urge you to complete the process and see to it that the named insured is fully and properly paid. If that is not done, I intend to hold you personally liable for any errors and ommissions and all costs that might be incurred by the insured as a result of your failure to fulfill your duty and obligation.

Sincerely,

Contractor"

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CHCROOFING (04-09-2011), Ed the Roofer (03-11-2015), roofdoctortx (04-08-2011), SLSTech (04-08-2011)
 

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