Bryan Hines
Member
Posts:110
 | | 01 Oct 2008 03:06 AM |
| I would like any thoughts from seasoned adjusters. I am a GC and have signed contract on a large loss and work is in progress. Insurance company sent out a GA and we were on the same page for the most part. He sent a roof consultant to inspect the roof and give recommendations of repairs. His recommendations matched mine. Here is where the problems starts . Consultant showed up with out letting me know and I was not present,during my absence he puts a sales job on my client which they referred him to me. Now he sent his report to the GA but also sends a estimate for the reroof to my client (keep in mind this is 100,000 sq ft building). Does this seem out of line? This seems wrong on different levels . Interference with my contract and conflict of interest for the roofer to be the consultant but also trying to get the work. My contract and relationship is solid with my client. Should I even bother with letting the GA know? Really bothers me! some of the stuff I run into with some adjusters. Not all just a very few. I was an adjuster for years and always kept a high level of integrity. I guess I was naive to some of the stuff that goes on. I'm not saying the GA in this situation has a clue. The roofer just seems to be using him for lead generation. | | | |
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Ray Hall
Veteran Member
Posts:898
| | 01 Oct 2008 12:32 PM |
| A hugh conflict. Report this to the carrier. | | | |
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Larry Wright
Member
Posts:96
| | 01 Oct 2008 02:44 PM |
| Bryan,
Are you sure the other contractor/roofer was engaged as a consultant, or was he asked for an opinion of damage scope and estimate as a contractor? Was he paid by the Insurance Co. for his inspection? | | | No one is absolutely worthless, at the very least you can serve as a bad example. | |
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Steve Ebner
Member
Posts:374
| | 01 Oct 2008 07:26 PM |
| You should definitely talk to the GA and find out what he or she understood to be the role of the roofing "consultant". If all the facts are as you believe they are, then I agree with Ray that something is not right here. The questions Larry asked, however, are pertinent. You need to know how the GA sees the role of this "consultant" and what the scope of his involvement was expected to be. Then you will be able to proceed accordingly. | | Steve Ebner
"With great power comes great responsibility." (Stanley Lieber, Amazing Fantasy # 15 August 1962) | |
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Bryan Hines
Member
Posts:110
| | 01 Oct 2008 11:26 PM |
| I appreciate the response. The insured and myself were informed by the GA that he retained the services of ####### roofing company as a consultant on the roof damage. It is my understanding that if he retained him than he is most likely paying for the inspection. The insured asked him(the GA) what his role would be and the GA responded” to assess the damage and recommend a proper repair”.
The following is a copy on an email I sent to the GA and his reply. Bear in mind two employees of my client both stated the roofer was aggressively trying to convince them to use his company. They also provided a copy of a fax he sent to them. The fax includes a proposal addressed to my client with no reference to me even after he was told repeatedly he would need to deal with me. The fact the adjuster is strongly defending this roofer causes concern.
______________________________________________________________________________________________________________________________________
#####
I know your plate is full and appreciate your efforts but the roof consultant you retained to inspect the property came out Monday. It seems his opinion is in line with what we had already discussed. However he came unannounced. At the conclusion of his inspection he attempted to meet with ######## and tried to get their business concerning roof replacement. He was told at this time that they had a GC and he would need to get with us. At this time I called him and informed him we were the GC and he would need to submit his info to #########. He still insisted on addressing his proposal to ######## and faxed them a copy. I am assuming you have no idea of these activities and would greatly appreciate it if you would inform your experts not to interfere with the contract/relationship I have with my client.
Thanks
-------------
Bryan:
We have spoken with Mr. ##### and respectively disagree with the content of your e-mail. We do however apologize if Mr. ##### did not call prior to his site visit.
#### | | | |
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Steve Ebner
Member
Posts:374
| | 02 Oct 2008 04:28 PM |
| ???????
I don't understand the response. It isn't specific enough about what (s)he disagrees with. | | Steve Ebner
"With great power comes great responsibility." (Stanley Lieber, Amazing Fantasy # 15 August 1962) | |
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Bryan Hines
Member
Posts:110
| | 02 Oct 2008 07:25 PM |
| That was my thought. I provided the entire email I just deleted the names.
If he disagrees that his expert agrees with my scope I can provide the proposal that his expert sent to my client which confirms my suggestion of roof repair. The same proposal is proof that his expert is trying to solicit my clients roof work. The fact the he is covering for this guy looks bad. | | | |
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Tom Toll
Life Member
Veteran Member
Posts:1070
| | 02 Oct 2008 08:28 PM |
| Consultant: Often a consultant provides expertise to clients who require a particular type of knowledge or service for a specific period of time, thus providing an economy to the client. In other situations, companies implementing a major project may need additional experienced staff to assist with increased work during that period. A consultant should never try to push his product on anyone, he should consult only. If I hired a roofing consultant to review damages and give me an opinion on how remediation should occur, I would exptect his opinion to be that of a expert in that field and nothing more. If the consultant was another roofing contractor, then that was a mistake. On a large loss an engineer consultant should be requested, so there would be no bias involved or job expectancy for that consultation. | | | Success is not final, failure is not fatal: it is the courage to continue that counts. | |
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Bryan Hines
Member
Posts:110
| | 11 Oct 2008 04:22 AM |
| Ok here is the latest.
I submitted a roof estimate for around 239,000. This was based on my roof contractors bid. I made sure it was inline with allowable local rates. Keep in mind I have been contracted to be the GC on the project. I recd an email from the adjuster stating he had a bid from a roofer to perform the work for 236,000 and since my price after O&P was 290,000 he would not agree to my price.This is odd since he has already agreed to O&P on all other trades. I then had a conference call with my client and his broker(insurance). He told my client that there was no need for my company to be involved in the roof project and he advised my client to just use the roofer that the adjuster retained as a expert. He also informed my client that my company actually is working for the insurance company and not the insured and they get to set the price that is acceptable. They now want to meet with my roof contractor. Mean while the roof leaks during rain storms.
Any thoughts??? | | | |
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Meg Watts
Member
Posts:124
| | 11 Oct 2008 06:48 PM |
| While the carrier gets to decide the price they are willing to pay for indemnity, I don't think they get to dictate WHO actually performs the work. That seems to me that leaves too much room for questions regarding collusion. If you, as a contractor, are willing to accept the reduced price, they don't get to tell the insured who they have to use. Besides, the lowest estimate isn't always apples to apples, and cost alone can't be the only factor deciding who gets the contract. If you're providing a complete job and the other leaves room for add-ons, or is using different materials, that could be a factor in the cost difference. Seems to me that the guy from the carrier stepped in it this time, leaving himself and the company open to all sorts of questions regarding their ethical practices. | | Do the right thing, ALWAYS
~Meg~
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Tom Toll
Life Member
Veteran Member
Posts:1070
| | 11 Oct 2008 07:42 PM |
| This obviously is a large, complex roof. All the commercial claims I have handled for the past 49 years, allowance for O&P has been included. It appears to me that you have a legitimate contract of adhesion between you and the named insured and that means you have the job, unless the insured terminates the contract by written letter. It further appears that someone is playing games with you. There is nothing wrong with getting a second opinion on cost, which is done frequently, if the adjuster feels your pricing is out of the ball park. They cannot force another GC to work on this project, as you have a signed contract. I would call the adjuster and ask him why O&P is not considered on this claim. I assume you are to be the GC on all the other repairs, this being said, O&P should be allowed, but of course, that is up to the carrier. | | | Success is not final, failure is not fatal: it is the courage to continue that counts. | |
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Dave Marlin
Member
Posts:56
| | 12 Oct 2008 03:36 AM |
| Posted By Bryan Hines on 10 Oct 2008 11:22 PM
Ok here is the latest.
I submitted a roof estimate for around 239,000. This was based on my roof contractors bid. I made sure it was inline with allowable local rates. Keep in mind I have been contracted to be the GC on the project. I recd an email from the adjuster stating he had a bid from a roofer to perform the work for 236,000 and since my price after O&P was 290,000 he would not agree to my price.This is odd since he has already agreed to O&P on all other trades. I then had a conference call with my client and his broker(insurance). He told my client that there was no need for my company to be involved in the roof project and he advised my client to just use the roofer that the adjuster retained as a expert. He also informed my client that my company actually is working for the insurance company and not the insured and they get to set the price that is acceptable. They now want to meet with my roof contractor. Mean while the roof leaks during rain storms.
Any thoughts??? Bryan, What is the percentage of the roof job to the entire job? If this is a larger claim and roof is a small or moderate pecentage of the entire job then I would, without any problem, allow O & P on the roofing portion. But. if the rest of the job is, for example, only $150,000, I would not allow O & P on the roofing. In this case, a GC is probably not required on the roofing portion. Just my opinion based on the limited info on the loss. | | | |
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R .D. Hood
Founding Member
Member
Posts:231
| | 13 Oct 2008 04:42 AM |
| I Have to agree with Meg. The individuals involved are seriously breaching the Tortuous interference laws of the state and could be opening the door for a a suit.
If you are the GC , the company had no rights to interfere with your methond of doing buisness and may well be a party to the infraction.
Just a .02 opinion | | | "Anyone who has never made a mistake has never tried anything new... Albert Einstein" | |
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Steve Ebner
Member
Posts:374
| | 13 Oct 2008 06:24 PM |
| It seems to me the only question here should be between 236,000 and 239,000. It depends on the state you are in whether this is an unfair claim practice. It seems at the very least unethical to tell a GC they can't charge overhead and profit on part of their job. Who exactly decided that roofs should not be part of a GC job. I have been noticing that some carriers have been telling independent adjusters not to add overhead and profit on the roof. This is completely contrary to normal contracting practices. General Contractors often oversee the replacement of a roof along with the rest of the work being done.
Bryan, if all is as you said it is, it looks like you've got a couple of the best adjusters in the industry (Tom and Dave) taking the contractor's side on this one. If your roofer is willing to accept a reduction to $236,000 (a difference between 1 and 2 percent of the total cost of roof repair), there isn't any discrepancy between your price and theirs. And you would be entitled to the overhead and profit on that. Some adjusters have either forgotten or never were savvy enough to know that they aren't supposed to fix the prices. They should be reflecting local pricing rather than trying to set their own pricing. That would include trying to determine which building elements they capriciously want to exclude from overhead and profit. | | Steve Ebner
"With great power comes great responsibility." (Stanley Lieber, Amazing Fantasy # 15 August 1962) | |
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Dave Marlin
Member
Posts:56
| | 14 Oct 2008 02:49 AM |
| Steve,
Based on your post above, I have a question for you.
A hail storm trashes a PVC roof of several hundred squares. Water leaks in and causing some minor damage to the interior for, let's say, $10,000. The insured obtains a GC. Are you saying you would pay O&P to the GC on the roof in this instance?
I feel you have to look at the job as a whole and, if O & P is warranted, pay it. But, just because a GC is involved does not mean you owe it.
Dave | | | |
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Mike Kunze
Member
Posts:492
| | 14 Oct 2008 03:24 AM |
| First of all, I think we need to understand who the "contractor" is. Often times after a hailstorm, the roofing salesman come out like worms in a heavy rain. They are just selling roofs. But if during their inspections, they are finding a lot of gutters & siding & window damages...the caterpillar suddenly becomes a butterfly...and, viola they are now a general contractor providing full-service needs to the homeowner. The cost of doing the roof doesn't change, whether or not the other items are damaged or not. So why, tell me, would O&P be payable on the roof in a situation like this? That was always an issue, and probably quite common for those folks that have posted prior to this. Many carriers told me "no O&P" on the roof, but if there's 3 trades give'm O&P on the other 2. Both carriers I worked staff for had the same instructions. Always seemed right to me. | | | |
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Steve Ebner
Member
Posts:374
| | 14 Oct 2008 12:21 PM |
| Dave,
In this example we are being told that there is leaking into the interior. The likelihood of more than one trade or more than two is quite likely. Though we have heard only one side of this story, the side we have been presented indicates that a general contractor is appropriate. The insurance carrier doesn't get to say, then, that no O and P applies to certain trades. They don't get to make those types of decisions because local construction industry standards are set by the local construction industry, not the carrier. For the insurance carriers to decide that they just don't want to pay O and P on roofs or to send in a separate roofer under the guise of a consultant to take part of a job away from another contractor by bidding 1% lower than the GC's subcontractor smacks of anti-trust violation.
Look at another scenario. Usually when there is a water loss, water remediation people are sent in and we do not pay O and P on their invoice. Then a GC is called in for repairs. But, in some cases, an insured calls a GC first. The GC arrives and realizes that the first thing needed is to dry the loss out. So in this case, the GC calls in the water remediation people and oversees the drying out process. Then the GC begins the repairs. In this case, overhead and profit should be paid on the water remediation as well as the rest of the job. The carrier doesn't get to arbitrarily say, "We don't pay O and P on water remediation."
Similarly, in the scenario that we have been dealing with here (and I am assuming there is multiple trades involved because the water is entering the interior) is not simply a roofer adding O and P to their single trade or simply throwing O and P onto their estimate because they also found a little gutter damage. This looks more like a carrier that doesn't want to pay O and P on a roof so they say to their favorite roofer, "This GC wants to charge $239,000 plus O and P. Why don't you bid a little less than that and we can cut the GC out of picture and save ourselves $3,000 on the job plus $47,800 in O and P." The carrier has saved over fifty thousand dollars by actually entering the bidding process and bidding against the GC for part of the job. And they don't have to pay any "consulting" fees because their "consultant" is not really a consultant.
There are at least two right ways the carrier could be doing this. The first would have been to send their own roofer in as a consultant and pay them as a consultant, tell the GC that they believe the true value of the roof claim is $236,000 and ask the contractor to adjust his estimate accordingly (without trying to evade the O and P) or send in a second GC to provide a competitive bid on the entire job so we are comparing apples and apples. In the scenario that is the subject of this thread, why would you stop with the roof. Why not send in a competitive A/C ceiling installer, and a competitive electrician, and a competive drywall installer, and a competitive painter, and a competitive flooring contractor. Then the adjuster can act as the GC and coordinate all the trades. Of course, the adjuster will need to get a general contractors license (which is illegal in some states) and we can elimate overhead and profit altogether. And the carrier can provide self insurance on the construction job and get sued in the construction defect claims that ensue when Hoober Goober ("I just got my Texas adjusting license. What do I do now") does a real bad job of overseeing the construction work.
The correct way to do this | | Steve Ebner
"With great power comes great responsibility." (Stanley Lieber, Amazing Fantasy # 15 August 1962) | |
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Larry Wright
Member
Posts:96
| | 15 Oct 2008 01:00 AM |
| Sure would like to get the Paul Harvey version of this scenario. | | | No one is absolutely worthless, at the very least you can serve as a bad example. | |
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Dave Marlin
Member
Posts:56
| | 15 Oct 2008 03:03 AM |
| Steve,
You explanation above makes complete sense and I do agree for the part. But, depending on the circumstances, if there was a large trade that the GC did not to be involved with, I still may not pay O&P. Each situation has to be adjusted based on its own merits.
I also agree that the adjuster's roofer acting as anything other than a consultant is unethical. | | | |
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Bryan Hines
Member
Posts:110
| | 20 Oct 2008 12:19 AM |
| Well now for the rest of the story. The broker asked for a conf call with all the parties involved (myself, broker, insured , and GA). He wanted to sort thru all the numbers and problems with the roof expert. The day the conf call was to take place the GA called me. He informed me he had a roof contractor(the roof expert) that would do the job for a lower price than mine and he would not charge O&P. I informed him to please bear in mind I had a contract to act as the GC on the project and my cost for the roof was per acceptable local rates. He kept bringing up that he had a roofer that would do it cheaper than my price. I informed him that my cost on the roof project was about 10% lower than the allowable published rates allowed by the Texas windstorm insurance association. He stated that what the TWIA was willing to pay for the job was irrelevant to him. I explained to him that what his roofing company would do the job for was irrelevant to me.
In the end I lowered my price by a few thousand. The GA agreed to this price and paid O&P.
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