Awesome. Little background... My buddy was moving out of state and gave me his contingency contracts and said they wouldn't work in his new state. I changed the logo and swapped our name and it collected dust. Then an epic baseball size hail storm came and completely wiped out my town. He called and told me get my butt out there and get those contingency agreements signed....oh....okay. By the end of the day we had 20. By the end of the week...50. Average claim is $20k. We are now averaging about 4-6 a day in referrals.
Question #1. What do you guys pay your sales guys on those? My sales guys typically get 10% of Par and split anything over. After looking at the Scope of Loss it seems my margins are going to be a lot less. Example they are paying way less per square of siding than I typically get. That 10% might sting a little.
I am my own sales guy since I am small, so can't help ya there. But what you're doing sounds good.
Question #2 - I've noticed on the Scope of Loss every single adjuster is different...even for the same agency. One accounts for drip edge, starter, and hip and ridge but nothing for waste. One guy accounts for waste and says the aforementioned is included in the waste calculation. My thinking is all of those items should be on there.....Who is right?
Question #3 - one adjuster line itemed hollow-back siding with 1/4 backer. The homeowner has Crane Board. I emailed him and he said, "Stick it up and we'll pay you for it." How? And how are they going to account for the difference since it looks like they have some markup calculated in there? Do I submit an invoice and they will put there own mark - up on it? Do I just invoice my regular price?
Question #4 - Every Scope of Loss is missing something. Do I get an accurate one before proceeding? Someone mentioned just turning in a supplement. Is that before or after? How do i invoice? Where does it go?
Question #5 - Someone suggested I get Exactimate and do my own Scope of Loss so when the adjuster shows up I can just give him the report, makes his job easier cause he can walk around and confirm the line items and then he'll create his own. Should I make the invest in something I'll probably never use again? Would it be easier to talk pricing and line items with the adjuster?
My answer for these four are basically the same. If the job is under $5,000 usually the insurance company is pretty easy and you can bid it however you want, over $5,000 and they are a pain. Yes all the adjusters are going to do it differently and yes they're not very smart. They will mis-measure things, get square footages wrong, and leave out stuff. The process for each insurance company will be slightly different as well. You'll want to talk to them and figure out what they need from you. As far as I know every insurance company is using exactimate. I think it's because the prices to the cost book built into exactimate are ridiculously low. So every insurance company looked at it and said, hey these are good prices! We'll use these so we don't have to pay very much. I would advise using exactimate too so the insurance company can accurately compare their bid and locate anything they left out. If you use any other program to submit your bid then the insurance company will get confused and probably won't even look at it. Then you will be stuck with them giving the home owner a substandard amount for the repair.
Even if you use exactimate you still want to be charging your regular prices, which means you'll have to make adjustments since the prices built into exactimate are extremely low, too low for any contractor to survive. You can do this by adding extra line items that are real specific. Add a line item that adds extra for the roof being two stories, another one for it being over a 6:12. Charge for some extra buckets for the tile grout, whatever you can think of, put in there. You might just have to change the cost exactimate gives you as well, adjust it to fit your own. But it's better to add line items because the insurance company might have a policy to match whatever numbers exactimate has. You're basically trying to write up your proposal in a way so the insurance will pay the homeowner as much as possible. You can always adjust the final proposal with the homeowner once the insurance company decides on the amount they are giving.
You should also find out who your state insurance commissioner is so you can contact him if you think the insurance company is breaching their contract with the home owner. I had a situation where the insurance company wasn't paying adequate sales tax. I think they were using the sales tax rates in Texas where their company is located, disregarding the fact that the sales tax rates are different in Washington and they cost more. So you can always file complaints to the state insurance commissioner if you think they are cheating. But don't complain about stuff that's already in their policy. For example most insurance companies won't cover wood contamination such as mold or level 3 water damage, or as you were saying lead removal. Ask them exactly which of those items are covered or not covered in their policy then go over it with the home owner and make sure everyone is on the same page.
Question #6 - Someone suggested I hire an independent adjuster to go out, make a Scope of Loss, talk with the adjuster, and handle the Supplements. That way I can focus on production. Thoughts? How much do they get paid? I feel like it's just another thing added to a low margin scenario...
Good idea if you are swapped and can find someone competent. Make sure you are charging for these estimates.
Question #7 - tricky question I now but what are the typical margins? My gross margins hover a little of 50%+. Could expect the same? I'm not seeing it based on the few reports I have so far.
Ask the insurance company that, they will probably use 10% overhead and 10% profit. Which is way too low for remodels, that's why I explained how to make adjustments on your proposal earlier.
Question #8 - I live quite a ways from our metro area where I do most my work. The installers typically charge a little more for working out here because of the time and expense of coming out this way which in justifiable. Will the adjuster "adjust" for that? I jus thought of it and haven't asked.
I doubt it but put it in your proposal anyway. They will likely give the homeowner less than what you are asking. But you'll have to make adjustments for this later with the homeowner. You can remove stuff from the proposal or have them pay the difference.
Question #9 - One home had lead paint. I told him the labor is higher because of the process of following the ERA guidelines. He said they don't pay for lead. So now I've got higher rates for the distance adjusted higher rates for lead and the adjuster isn't comping for any of that. I might do $1M in business and go broke doing it!
Question
As explained just put it in your proposal. You can ask the homeowner to search through their policy, if the insurance company is breaching the contract then advise them to take it to the state insurance commissioner.
#10 - In what circumstances do the adjusters typically give out O & P? We have the crews and the experience in how to punch these out and still keep high quality work. I'm just not sure on these items above. Thanks in advance for letting me drop in and the advice.
