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Discussion Starter · #1 ·
When an auto body shop knows that your repair is going to be covered by an insurance company they charge a different price than if you were paying it yourself.

I am bidding an interior smoke damage job and was wondering if there was any sort of special pricing when you are dealing with an insurance company. While still staying within the bounds of the law. Do any of you have any special procedures you follow when bidding on insurance jobs?

Or any advice when working indirectly with an insurance company?
 

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Humble Abode said:
When an auto body shop knows that your repair is going to be covered by an insurance company they charge a different price than if you were paying it yourself.

I am bidding an interior smoke damage job and was wondering if there was any sort of special pricing when you are dealing with an insurance company. While still staying within the bounds of the law. Do any of you have any special procedures you follow when bidding on insurance jobs?

Or any advice when working indirectly with an insurance company?
The more you write the more you can charge,be prepared to do battle with adjuster to get your customers home properly repaired.
 

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Discussion Starter · #3 ·
bergenbldr said:
The more you write the more you can charge,be prepared to do battle with adjuster to get your customers home properly repaired.

I'm guessing that the insurance companie is going to want more than one bid and most likeley want to only pay the lowest bidder. Am I right about that?
 

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Humble Abode said:
I'm guessing that the insurance companie is going to want more than one bid and most likeley want to only pay the lowest bidder. Am I right about that?
Not necessarly , customer does not have to go with lowest bidder,as long as your bid is in the cost range for your market and you have itemized everthing .Of course the insurance companies would want everyone to go with low bidder.
 

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I probably do 15 or 20 fire jobs a year, and the trick to this has already been mentioned. Itemize, itemize, itemize. Preparing an insurance bid is different that anything you'll ever bid, and some guys are not comfortable laying all the cards out on the table like that. Every operation and every little piece of this or that needs itemized. A recent bid for a fire damaged bi level home I rewired was over 9 single spaced pages long. One example is the exterior light fixtures on the house. They all (6) were undamaged, but needed removed to run new wiring to them and so the siding guys could do their work. This was two lines on the estimate. Six dollars a piece to remove and replace them, and 4 dollars each to clean them since they were mucked up by smoke and whatever slop the fire hoses got on them. The wiring for them was included in another line item for their associated branch circuits.
 

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I've dealt with insurance companies on many roofing projects and found that their itemized/sq sheet is easy to follow. What I decided to do is use their format when submitting invoices to all my customers in roofing.

That way if they do hand over the details to the insurance company its in an easy to read format. Many times its difficult for them to be picky about the cost per square because every company has different overheads.

You many ask the insurance company for a detailed invoice that their people use to get a general idea. (Maybe a different insurance company)

I personally like working with insurance companies because they pay, and on time.
 

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mdshunk said:
I probably do 15 or 20 fire jobs a year, and the trick to this has already been mentioned. Itemize, itemize, itemize. Preparing an insurance bid is different that anything you'll ever bid, and some guys are not comfortable laying all the cards out on the table like that. Every operation and every little piece of this or that needs itemized. A recent bid for a fire damaged bi level home I rewired was over 9 single spaced pages long. One example is the exterior light fixtures on the house. They all (6) were undamaged, but needed removed to run new wiring to them and so the siding guys could do their work. This was two lines on the estimate. Six dollars a piece to remove and replace them, and 4 dollars each to clean them since they were mucked up by smoke and whatever slop the fire hoses got on them. The wiring for them was included in another line item for their associated branch circuits.
For reasons stated above i avoid this type of work, except for longtime customers. My charging a fee for insurance jobs helps to make them go away.
 

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I Agree

bergenbldr said:
For reasons stated above i avoid this type of work, except for longtime customers. My charging a fee for insurance jobs helps to make them go away.
Truer words have not been spoken.

If you can avoid insurance jobs, do so.

Unless you charge for insurance estimates, you could end up doing dozens of hours of estimating work just to put a check into an unscrupulous owner's pocket. The way to avoid that is to tell the potential customer up front that you charge for insurance estimates and won't provide the estimate until you have been paid in full.

I tell them $100 and that is usually enough to scare away the con men.

As with bergenbldr, I too will usually only take insurance jobs for long etsablished customers, but you coudl still have problems.

As already mentioned, insurers make money by NOT paying out on claims.

It has been my experience that most insurers are usually only willing to spring for about 45% of the cost to do a repair.

Some of this is because if codes have changed causing more work than was originally required, the insurers do not have to pay for code mandated upgrades.

Some of this is because owner's usually just want the cheapest coverage that is required to get a mortgage, but their coverage only covers original costs and with amortization of the damaged goods taken into account...not full replacement of the item in today's market....their are actually underinsured and then expect you to take what the insurer offers.

I've even had customers lie[/i] to me that repair work was covered then came to find out they had no insurance at all! But that's another story... :cry:

This immediately puts you at odds with the customer who has to come up with often significant amounts of money to make up the difference between what their insurance company will pay and with what you need to do the job, and no owner wants to spring out of pocket.

This means you usually have to negotiate the cost of your job downward just to get it or else the customer just moves on.

Here's a good example:

In an ice storm last winter, a neighbor had a 90 foot tree crash down onto and through their roof is 9 locations.

The insurer granted about $4000 for the roof replacement when in fact the actual cost for the job was $9000. Instead of getting a full rip-off and replaced roof, the owner's got a roof cover over.

But this same tree also knocked some kitchen cabinets off the wall.

Since one of the damaged cabinets was an odd sized no longer produced wall oven cabinet, the insurer did pay for all new cabinets.....BUT

They would not pay for relocated plumbing because the deisgn of the new kichen had to change to accomodate the wider range oven cabinet, new wiring because of the same design change, installation of all new soffits because the old ones wouldn't meet code, new counters because of the changes, etc and so on.

Of the $14,000 kitchen estimate I delivered the insurer, they paid only $5000 after amortization and excluding upgrades and we had to scale back the project to a bare minimum $7000, the owner coming up with $2000 they really didn't have just to get a kitchen they really didn't want.

If it weren't the fact they were my neighbors, I would have walked away.

So the moral of the story is, when you are dealing with insurance jobs you are not really dealing with cash paying customers who are willing to pay for what they get.

Instead you have your hands tied by customers who underinsure and insurance companies unobligated to pay...with you in the middle...being squeezed for less than what you need....
 

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homebild said:
Truer words have not been spoken.

If you can avoid insurance jobs, do so.

Unless you charge for insurance estimates, you could end up doing dozens of hours of estimating work just to put a check into an unscrupulous owner's pocket. The way to avoid that is to tell the potential customer up front that you charge for insurance estimates and won't provide the estimate until you have been paid in full.

I tell them $100 and that is usually enough to scare away the con men.

As with bergenbldr, I too will usually only take insurance jobs for long etsablished customers, but you coudl still have problems.

As already mentioned, insurers make money by NOT paying out on claims.

It has been my experience that most insurers are usually only willing to spring for about 45% of the cost to do a repair.

Some of this is because if codes have changed causing more work than was originally required, the insurers do not have to pay for code mandated upgrades.

Some of this is because owner's usually just want the cheapest coverage that is required to get a mortgage, but their coverage only covers original costs and with amortization of the damaged goods taken into account...not full replacement of the item in today's market....their are actually underinsured and then expect you to take what the insurer offers.

I've even had customers lie[/i] to me that repair work was covered then came to find out they had no insurance at all! But that's another story... :cry:

This immediately puts you at odds with the customer who has to come up with often significant amounts of money to make up the difference between what their insurance company will pay and with what you need to do the job, and no owner wants to spring out of pocket.

This means you usually have to negotiate the cost of your job downward just to get it or else the customer just moves on.

Here's a good example:

In an ice storm last winter, a neighbor had a 90 foot tree crash down onto and through their roof is 9 locations.

The insurer granted about $4000 for the roof replacement when in fact the actual cost for the job was $9000. Instead of getting a full rip-off and replaced roof, the owner's got a roof cover over.

But this same tree also knocked some kitchen cabinets off the wall.

Since one of the damaged cabinets was an odd sized no longer produced wall oven cabinet, the insurer did pay for all new cabinets.....BUT

They would not pay for relocated plumbing because the deisgn of the new kichen had to change to accomodate the wider range oven cabinet, new wiring because of the same design change, installation of all new soffits because the old ones wouldn't meet code, new counters because of the changes, etc and so on.

Of the $14,000 kitchen estimate I delivered the insurer, they paid only $5000 after amortization and excluding upgrades and we had to scale back the project to a bare minimum $7000, the owner coming up with $2000 they really didn't have just to get a kitchen they really didn't want.

If it weren't the fact they were my neighbors, I would have walked away.

So the moral of the story is, when you are dealing with insurance jobs you are not really dealing with cash paying customers who are willing to pay for what they get.

Instead you have your hands tied by customers who underinsure and insurance companies unobligated to pay...with you in the middle...being squeezed for less than what you need....

Well stated,keep in mind too that you the contractor are assuming the future liabilty for the half a--ed repairs the insurance companies want you to do to save them a buck. I tell customers i will not compromise my standards to bring my price in line with what insurer is willing to pay.
 

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I love this when it come to custom cabintry which is also art. Woods no longer available or becoming more rare. Found pieces that will never be found again. Who can assess a value?
I like to be able to drive them nuts while they are doing the same to me. I'll get my pound of flesh!
 

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I work for the customer. The customer pays me. I don't charge higher or lower for insurance work. I charge what I charge.

The customer is more than welcome to go back to the insurance and ask for money off, but I'm not going to fight too too hard for that money for them. I've just got no time. I've spent hours on the phone with insurers and been to arbitrations for customers; and have almost nothing to show for those hours of my life wasted.

LOL once an insurance agent called me, asked me why the siding needed to be replaced. My answer: "Because the customer asked me to replace it." LOL the customer told the insurer that I claimed it all needed to be replaced. Yeah it did, it was old; but had no hail damage they were claiming.

I know guys who specialize in insurance work (disaster recovery mostly). They have purchased a database which updates weekly of rates insurance companies pay out in their area. The database also knows how insurance companies like to read estimates and generates the estimate specific for what ever company. Be prepared, I think the database if $50,000 upfront and $250 a month thereafter.
 

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Discussion Starter · #12 ·
Grumpy said:
I work for the customer. The customer pays me. I don't charge higher or lower for insurance work. I charge what I charge.
Thats pretty much what I was looking for. I didn't know if there was some sort of SOP when it came to burying deductibles and bilking the insurance companies. I will just treat it as I would any other job.

Grumpy said:
Be prepared, I think the database if $50,000 upfront and $250 a month thereafter.
Youch! It's a good thing I don't plan on making a living from that sort of thing... Although aparently you can make a good one doing it.
 

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Well, my wife is a Senior Claims Rep for an insurance company and handles things like this, construction defect claims, etc. From what I know is that the claims rep goes out to see the place armed with the National Construction Estimator book and already comes up with a layman's ballpark that they use to set their "reserve"...as high as they are gunno go. Then they usually call in a contractor they are familiar with to shoot them an estimate. Obviously the homeowner can get their own estimates as well then they kinda decide how much they are going to pay from there. The insurance co will only pay so much so anything above that is out of the homeowners pocket so that will shy them away from a hideously bloated estimate.

You can make a few extra bucks off an insurance job, but dont try and go on vacation off it. When my wife first started handling these claims a couple years ago she would pick my brain and I pointed out plenty of places the contractor was taking them for a ride, and I mean HARDCORE. Needless to say that contractor wasn't called in for any more jobs. Im all about my brother contractors makin' a buck...but hey, Im sleeping with the enemy...lol

You can get away with beefing it up a tad, but careful about trying to take em to the bank.....you never know if the claim rep happens to be married to a man in the trades :)
 

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I do not do any insurance work, howevr I do work with a contractor that does do a lot of this. His way of bidding is using the Craftsman estimating program as it does most of the work for you with pricing.

I tried it a couple of times, to me its like flate rate pricing, which in some cases is OK but people really freak out at those numbers.

BJD
 

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I have only done 3 ins jobs , 2 of which the adjuster told me over the phone what they were willing to pay. Both of those 2 prices were high enough that I was able to give homeowner back their deductible when they here that you sell the job
 

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Insurance companys use software to find out what the cost are.Trouble is that their numbers are not up to date.
Did 1 water damage project had to neg with adjuster which was okay guy and he had to override program to get close to my bid I gave a little on some items and made up for it on others.
 

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I kind of take a different look at all of this. If you look at the long term. Everyone hates how high insurance cost are. Doesnt matter what kind of insurance it is I have an example of each.

This is part of the problem with why insurance rates are so high. Here is an example.

Health insurance - All the big carriers came up with plans where you would pick a doctor and if you needed special work done, you go to your picked doctor first then get a referral. Well next thing you know health insurance cost sky rocket. Why? Because people werent shopping for the best deal, they went to their pre seclected doctor who could continually raise rates and nobody would notice because you still only pay $20 copay/per vist. However, if anyone noticed your health insurance cost raised on a yearly basis depending on how much money those doctors cost the insurance company to lose profit. So year after year rates climb but you only pay $20/copay so who cares its the insurance companies fault. Finally a few companies have come up with a plan where you dont have to pre-select a doctor and you pay coinsurance which now you pay a % of the bill so people will tend to shop for rates on health care.

How does this relate to the post? And whats the real problem here?
The problem is two-fold. First of all you overcharge the insurance company. Do they care? No, because they can just pass the cost on to homeowners when they renew their policy. So its kinda lose/lose here. Maybe you will make a little extra $$$ now but looking at the big picture I believe you will pay a continually rising homeowners insurance as will I. Everyone looks at it like they arent going to be the one to fix the problem and the cycle continues.

Just my opinion but even if you dont overcharge the insurance company the next guy will and they will still raise rates. So why should you be any different from the next guy.

`Justin (tired of paying high insurance)
 

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Priced a DW repair job for some full service clients whose airhandler condensate line overflow clogged resulting in a water damaged ceiling.

I submitted the price on a TYPED letterhead proposal. No other prices were obtained from other contractors. Clients called back to say go ahead.

The price is no higher/lower than I bid for any other job. Ethically, I feel this is the right way to conduct business. BTW, my prices are higher than most but you get every pennies worth!

Know your prices and charge accordingly. Thats how ALL sucessful businesses operate.;)
 

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Many companies that specialize in insurance work already know how the insurance companies pay and what the insurance companies pay and they charge to match that payment structure. There are some very expensive computer programs on the market. Infact AllState requires their contractors to use Exactimate (sp?) for all estimates. So it matches their format, since that's what they use.

Insurance companies pay everythign by the piece, and their estimates reflect that. You can sometimes get them to pay more per piece for difficulty and so forth, and you can sometimes convince them that they may have missed some pieces.

I am bidding a tile roof repair, the roof seriously needs to be removed and reset. Anyways the insurance company is only paying $14 per tile. I laughed, and the customer asked why. I said it's probably $14 a tile when installing a new roof but repair work is somethign like $75 a tile. He asked why, and I explained it would take hours to replace just one tile if that were my only job. Driving to supplier for tile, putting up ladder, putting up chicken ladder so not to damge any other tiles, removing tile, removing ladders and driving back to office. Replacing one tile would cost about $375.

Obviously there is more work than just one tile, however I told the customer to expect an uphill battle because nobody can work for what is being offered.
 
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