Why All The Secret Rules?

The restoration industry follows many unwritten rules and often times we follow them to our own detriment.  I didn’t know this was a case until I broke one of them and started to see how many they’re actually were. Let’s dispel some of them here.

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Myths and Truths

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Myth: Overhead and Profit is built in to Xactimate line item pricing.

Truth: A quick read of the White Paper published by Verisk states:

“When the Verisk team performs market research on unit prices, those surveyed are specifically asked to not include expenses that would be included in general overhead (see below) or profit markup percentages.”

https://eservice.xactware.com/esc/showme/PDF/2023/WhitepaperOverheadandProfit.pdf

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Myth:Overhead and Profit is not warranted on ____________________

Truth: In many States it is illegal to deny a general contractor overhead and profit, no matter the complexity of the trade. We never really look at this one for what is actually being said when O/P is denied for complexity. Essentially what the carrier is saying is that only certain professions deserve to cover their overhead expenses and feed their families if you just install drywall, you do not meet that bar.

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Myth: Talking about the claim with an adjuster violates UPPA laws

Truth: As a contractor you are fully within your legal right to speak on the dollar figure as well as the repairs needed. You share a client the policyholder and while your contract isn't with the carrier communicating with them is still a necessary function of the job. Anyone telling you otherwise is either trying to underpay a claim or sell you or something.

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Myth: the same company that owns core logic also has $16 billion invested into the property and claims industry and the reason your estimates come back 30% lower and it is becoming mandated to use as a estimating platform is correlated with this.

‍Truth: That’s not a myth, that’s true.

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Myth: Item Labs is not a company, it's more of a service provided by a company named global claim services who sold mission is to assist insurance carriers in cost saving methods

Truth: Did you guess that was also true, you’d be correct.

My favorite “unwritten” rule in this industry;

Myth: TPA vendors do not adjust claims on behalf of the carrier.

Truth…..

After Hurricane Ida tore through the Northeast We became swamped with TPA work. I was driving down to a home that had an affected somewhere in Southern New Jersey and I was on the phone with a CSAA adjuster. I’ve spoken to relatively frequently about an unrelated claim that I had written estimate for. They were asking me my opinion on the extent of the damage and the steps moving forward for their insured.

This was a conversation I had day and day out with adjusters from all major carriers.

When I arrived to the loss, there is an independent adjuster on site. I spoke with him the night before and he seems like a pretty cool guy, I was wrong.

At one point, I had made an offhanded joke that TPA work boiled down to was independent adjusting, because it is. He did not find that funny apparently.

As I drove back, I got a call from my boss. He proceeded to rip me a new asshole for two or three minutes apparently that independent adjuster went back to the head of CSAA in South Jersey told him what I said, and then that prompted to call my employer.

I was legitimately confused at what I had been wrong. I wasn’t saying anything not true.  my boss was a practical man and while he agreed with me that what I said was true, he knew something I didn’t. You can’t say that.

Even if you spent an hour, adjusting a claim with that same carrier on the drive down.  

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