Obligations For Insurance Claims Investigations According to the state of Washington Administrative Code (WAC) 284-30-370: Standards for prompt investigation of a claim. Every insurer must complete its investigation of a claim within thirty days after notification of claim, unless the investigation cannot reasonably be completed within that time. All persons involved in the investigation of a claim must provide reasonable assistance to the insurer in order to facilitate compliance with this provision. In the second part of our conversation with Roger Howson (Seattle, WA) and many others, we discuss the insurance claim appraisal process. Episode 78 of The DYOJO Podcast will touch on topics, including
While many contractors dabble in policy interpretation, often because they think they are doing the right thing for the client, they may be crossing into the territory of public adjusting without a license. Roger discusses how, "If it walks like a duck and talks like a duck, it better be licensed like a duck." Andy McCabe shares a story where he had to answer some tough questions with an Oregon insurance investigator. Our guests will include:
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THURSDAYS ARE FOR The DYOJO Podcast New episodes of The DYOJO Podcast are released on Thursdays 9am PST via video through YouTube and/or audio is distributed through platforms such as Apple, Spotify, Google, etc. Learn more by visiting our website - www.thedyojo.com/podcast
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Contractors and customers feel the squeeze when the insurance carrier plays pricing games with the estimating and collection process of insurance claims restoration. We discuss New Construction Pricelists being applied to restoration scenarios with contractors in Minnesota, California, and Washington. We discuss the issue, rebuttals, and resources including the Restoration Pricing Position Paper from the Advocacy and Government Affairs Committee (AGA) of the Restoration Industry Association (RIA), “New construction price settings in certain pricing programs increase labor productivity which reduces prices in a way that may not be appropriate for restoration. Indirect tasks that must occur to accomplish direct repairs – known as “Supporting Events” – may need to be appropriately adjusted due to the extent of the damage in a restoration project. This discussion educates the listener on the underlying factors which lead to these manipulations and provides the contractor with some well-thought-out rebuttals. While there are no cheat codes that will eliminate the squid games, restorers will find it refreshing to know that resources are being created and advanced regain and maintain sustainable claims practices. The DYOJO Podcast, Episode 77 includes these guests and appearances:
Sponsors of The DYOJO Podcast: * Restoration Industry Association (RIA) - Restoration Industry Association (RIA) Join your fellow intentional restorers at the RIA 2022 International Restoration Convention and Industry Expo, April 11-13 at the Peppermill Casino in Reno, NV. Let them know The DYOJO sent you. * Restoration Technical Institute (RTI) provides world-class training. Designed for those who serve the Restoration, Cleaning and Industries related to the Built Environment. * Office Services by Brandi, LLC provides unparalleled personalized bookkeeping services to a broad range of clients in many states. Brandi will help tackle the never-ending list to be done in the restoration industry by handling the R&M billings, collections and many other key areas to take the burden off the owners. THURSDAYS are for The DYOJO Podcast New episodes of The DYOJO Podcast are released on Thursdays 9am PST via video through YouTube and/or audio is distributed through platforms such as Apple, Spotify, Google, etc. Learn more by visiting our website - www.thedyojo.com/podcast We resume our series, The Xactimate Sessions. We are discussing the mindset and habits that have helped your peers in the insurance claims industry to elevate their scoping, estimating, and project management game. File 006 introduces the audience to Joyce Gabriel, a talented general manager for a full-service restoration company based in Tacoma, WA. Listeners will remember when Joyce joined us for podcast episode 52 to discuss some of the powerful tools she has learned for connecting with and interacting with your team. Joyce rejoins the podcast and helps us explore the mindset and habits for effectively training your employees to understand and utilize the Xactimate estimating software. Xactimate Podcast DiscussionThe Xactimate Sessions from The DYOJO Podcast File 006: Training Others In Xactimate Season 3, Episode 75 Guest: Joyce Gabriel, General Manager (Tacoma, WA) Our discussion includes appearances by these guests:
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The DYOJO Podcast New episodes of The DYOJO Podcast are released on Thursdays 9am PST via video through YouTube and/or audio is distributed through platforms such as Apple, Spotify, Google, etc. Learn more by visiting our website - YouTube.com/thedyojo Technology is creating opportunities for insurers and contractors to consolidate resources for all parties to a claim. While many claims professionals are familiar with the concept of 360-degree scan and/or photographing technologies, I meet many who do not know how to utilize these resources. My goal with this article is to share how 360 scanning can help expedite claims collaboration. Expedite claims collaboration with technologyIn property damage claims, thorough data capture is essential. We know that a picture speaks a thousand words, so what is the value of a 360 capture that can be reviewed by anyone with access? All claims professionals are familiar with the awful feeling when they don’t have the one picture that they need to support a claim-related item. With the tools I mentioned, you can take a screenshot of any area in question that was not previously captured. If an adjuster and a contractor are negotiating a claim, they can both access the scanning resource and discuss claims items with the benefit of a three-dimensional room-by-room review. Additional Resources from The DYOJO
Writing an estimate should be a blend of art and science. As an estimator you will utilize equal parts scientific and artistic approach if you want to set yourself apart from the status quo. The Science of EstimatingThe science of estimating includes growing your knowledge base so that you understand what you are bidding, how you will approach the project, and why you use certain items to construct your estimate. In the world of insurance claims mitigation and repairs, this often means learning to utilize estimating software such as Xactimate or Symbility. The science of estimating is all about growing your mindset for success. We have created a series on our podcast called The Xactimate Sessions which reviews some of the resources and approaches to estimating that can help you expand your knowledge base and elevate your skills as an insurance claims estimator. On The DYOJO Podcast we talk about learning to estimate from scratch, resources available from your Xactware license, and habits for improving your estimating game. The Art of EstimatingThe art of estimating includes those habits that will help you stand out from your competition. There is some science in the art form, whereby the habits both help you to be a more consistent estimator as well as methods for composing your estimate in a manner that is understood by insurance carriers, property damage customers, and your production teams that will carry out the restoration work. Many of these mindsets and habits for success are addressed in the book Be Intentional: Estimating by Jon Isaacson, The Intentional Restorer. Some of these elements include:
An Example From An Xactimate EstimateWhat's missing from this picture (Exhibit 1) of an insurance claim repairs estimate written in Xactimate? I will start out by saying that this example above is not the worst estimate that I have seen. It is probably better than the status quo. Yet, it lacks a few simple things that can help it be better for clarifying the scope, negotiating the claim, expediting the contract, and delivering an executed product. The Importance of Estimating StructureThis estimate is not top-down or in sequence with the way the claim will be addressed. Without changing any of the line items, take a look at a picture of the claim (Exhibit 2) and see how an estimator might approach this scope with a bit more art and science. Where would you start? Most intentional restorers would start with jobsite prep, right? So PREP ITEMS will be our first estimate header and those line items would be in that first category. PREP ITEMS include:
As you compose your line items, you will either write your estimate in a sequence from the top down or the bottom up. You will create headers that give your estimates an aesthetic that leads the reviewer through a guided tour of the damages in each room. Your F9 notes and photos will supplement any line items that create questions for the carrier. - Be Intentional: Estimating, Chapter 17 The Advantage of Estimating ConsistencyAs you can see in Exhibit 3, I have made no line item changes to the prior Xactimate estimate other than to format the structure of the scope with headers. I believe that headers make the scope easier to read for all parties involved in the claim. Having a structure like this helps those who are responsible for thorough data capture at the loss site to consistently gather their documentation in a manner that will be in sync with how the scope will be composed. Estimating structure increases estimating consistency which decreases scope creep on the initial job walk. When you write in a consistent manner, you help yourself to reduce the chance of missed scope details. When you compose in a clear structure you are attempting to minimize the questions that a reviewer might ask. It can be frustrating when you put so much effort into an estimate and silly questions still get asked, but if you continue to work with those entities they will come to appreciate the level of detail that you provide. It is possible to stand out when composing estimates in Xactimate. It may not happen often, but it is always nice to hear someone say, “I really like how your estimate is structured. That’s the first estimate in a long time that had a flow to it that I could follow. You really are the best and there is no one like you. I hope your boss is paying you well because you are worth every cent and more. I want to be like you when I grow up.” - Be Intentional: Estimating by Jon Isaacson If there is enough interest and readers give feedback to the publisher, we may have a follow up discussing legitimate line items from Xactimate that should be included in this estimate. I think the missing items should be clear to most estimators, whether restorers, adjusters, or project managers, who consistently see projects through from start to completion or restoring a structure to resemble it's pre-loss conditions with materials of like kind and quality (aka The Standard). A few of those missing line items would include (but not limited to):
Better Insurance Claim Outcomes Through Better Estimating HabitsPoorly structured estimates show a lack of care and/or expertise. How often have you reviewed an estimate from an adjuster or a competitor that has little structure and is hard to follow? There are so many estimates that look like a grenade full of line items was thrown into the program and exploded. It’s like mystery night when someone extracts all the leftovers from the refrigerator and attempts to make something edible.
How many of you are reading this and know that those same poorly structured estimates are being composed by your hands or those of your team members? Most Xactimate professionals can see the telltale signs of an estimator who is either inexperienced or is lazy in their estimating habits:
If you are lost or this is the first time you are hearing of such things, please refer to another article I wrote titled The Three R’s of Mastering Xactimate for more guidance. Overhead and Profit (O&P) in Xactimate Line Items?Is it true, there is no O&P in the Xactimate repair line items? Xactiamte trainer and estimating guru, Ben Justesen, joined The DYOJO Podcast to discuss this topic and more. On Xactimate Sessions File 005, Ben responded, "This is a good question. Whether you realize it or not, it's a little bit loaded. When I when I think of overhead and profit (O&P). as a markup, that markup is not included in the Xactimate line items." The Difference Between Markup & Profit for Insurance Claims EstimatingWhat is markup? You have your line items coming together to form the cost of your scope. You add a markup, which in the insurance industry is often considered this arbitrary 10% overhead plus 10% profit (aka 10 and 10). This add-on to the end of your Xactimate estimate is your markup. Markup doesn't actually give you a guaranteed profit margin, which is what you actually take away from the project once you've paid for the work and the cost of goods sold. In simplified terms:
"However," remarks Mr. Justesen, "That markup is only a portion of the margin that you would need. So there is some margin in the line items themselves. But it's on a certain component. That's the labor component. There's are no margin on materials, there is no margin considered on equipment. So the margin that you have to consider is on the labor." in addition to running a multi-site restoration company out of Moses Lake, Washington, Ben also has created the Enlightened Restoration Solutions (ERS) course to help insurance claims estimators elevate their skill sets. He is the leading proponent for encouraging restorers to make their own pricelist within Xactimate and teaches them how to effectively do so. He reminds contractors that if all they rely upon is the 20% markup added to their estimate, they will struggle to cover their true overhead costs or meet their actual profit margin goals. If a restorer sticks to a strict 20% markup, they need to understand they are only netting a 16.67% margin. 20% Markup is only 16,67% Margin for Restoration EstimatesI will try to do this justice. This is something Ben justesen demonstrated when I attended his ERS course. If you watch the video you will notice that I am using the legal pad from the Law Offices of Edward H Cross, aka The Restoration Lawyer. Another resource like to shout out is The Book on Restoration Collections by Ed Cross. This book is available through their website and is designed to take the mystery out of collections for insurance claims.
Restoration professionals hear all the time that 20% overhead and profit (O&P) is more than enough. But, you and I know that this is actually only 16.67% margin. I will demonstrate how:
Why is this? That is because if we had an invoice from a subcontractor for $1,000.00 and the gracious insurance company allowed us to mark that invoice up by 20%, we would then be charging $1,200.00. From our $1,200.00 we pay our sub $1,000.00 and we are left with $200.00. Our $200.00 is only 16.67% of the $1,200.00 that we charged. So, not only did we NOT get at least 20% (which is far lower than ANY insurance company makes as an overhead and profit margin), we also likely had to wait on the money so the insurance and the client allowed us to finance the payment interest free while they waited to pay the $1,200.00 so that we could recoup what is left of our $200.00. Most restoration companies, most contractors, and most insurance companies have a higher profit margin goal than 20%. This markup can really drag those margins down on your individual projects and your overall goals for the year. If you're only getting a 20% markup on the front end, it can really skew your margin on the back end. |
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