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Last Post 06/22/2008 5:46 PM by  Ray Hall
No Gas?? I'll Pass
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christian
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06/04/2008 6:49 AM

    As we approach another season, the cost of fuel leaps out as an expense that could be the difference in making a living or just working under the law of diminishing returns. Most of us have not worked a major storm since Katrina. Having to commute long distances then was bad enough with $3 gas, Consider what it will cost if a Cat hits the Gulf again. Where will we see fuel prices this time?? $5 to $6 or higher?? With diesel running close to $5 where will that go. I was fortunate to work flood then when billing was high and carriers just wanted to clear claims. With all that the carriers are requiring adjusters to preform to close a claim, shouldn't we require a fuel surcharge? You can bet that staff adjusters have little concern, their expenses are paid! I have a couple of questions to ask you kind folks.

    Have you addressed this issue with your IA firms? Are there any IA frims that ARE addressing this issue? Have any of you considered passing on assignments based upon this cost? Are you willing to take a stand? And.... how best can we get the message to the carriers and IA firms that we need a program to balance this expense?

    host
    CatAdjuster.org Founder
    Posts:708


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    06/04/2008 8:53 AM
    Are there any IA firms that ARE addressing this issue?



    Yes, there are firms out there that are addressing the issue by adding fuel surcharges to their fee agreements. Over the last couple of years I have seen an increase in fee schedules that include the fuel surcharge agreement.

    Also, there other ways firms address the issue, for example mileage charges,  price per mile increase and reducing the number free miles.  In Clayton Carr's 123 page Fee Comparsion document that he published in 2004 here on CADO,  he listed the mileage charges of over 30 firms.

    johnpostava
    SIMSOL.com
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    Posts:140


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    06/04/2008 9:46 AM

    Just last month, a group of us, all owners of flood adjusting/cat firms began the process of petitioning the powers-to-be at NFIP/FEMA/DHS to raise the NFIP flood fee schedule to better accomodate higher fuel, hotel, airfare and car rental fees - costs which must be paid for by all independent flood adjusters.  It is the same group of IA firms that got adjusters the raise in the fee schedule (with the help of the flood victims' advocates after Hurricane Isabel in Maryland) in 2004.  It may take some time but NFIP is open to starting the process.  They understand that to keep a good supply of trained flood adjusters they have to be compensated properly.

    WILLIS
    Member
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    Posts:97


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    06/04/2008 12:08 PM

    Like many on this board I have been doing this a long time. I was driving 200 + miles daily often during Katrina with gas around $2.75/gal

    Those days are over.  If a another big one hits the gulf it will knock out most of the refineries and gas will easily push $6/gal assuming you can even find any   I try to cost out every storm. I am making less and less every year. I remained thrilled all carriers now want paperless files that saves me on paper, ink and postage.  Katrina was good and like you said I too had my share of large files and that fee can offset that fuel fear. But if we have to travel long distances on these files the cost of fuel alone will deter many. Just wait til you get that first BP gas bill in excess of $1,000 for the first month and see how that sets and then you do not draw the first payment for 60 days  So unless the carrier agrees to a fuel charge per file handling those would be difficult.  When you factor all your up front costs  ie...lodging, meals, fuel,  equipment, depreciation and Taxes it will be tough  to show much profit   I hope for a hurricane that is in the Cat 1-2-3  level so I can get in and out quickly  the longer you hold on to it the more it will cost you.

     

    JimGary
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    Posts:470


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    06/04/2008 5:47 PM
    This discussion has popped up a few times on this sight, and one theme has always come up. How can I afford the diesel for my rig. I have also seen the discussion turn to how much and why someone deserves their large gas or diesel burning rig.Usually relative to the years they have been in the business. I have also seen discussions about our government has to tighten its belt learn to live within its means. To get to the point, these are the conditions in which we live today. And we will have to adjust accordingly. I wanted a truck, but when doing the math, I find that my Corolla means $$ profit every day. It won't pull a trailer, but Motel 6 is cheap. I guess I have not been in the business long enough to feel a great entitlement to luxury.

    Point is if we expect the government to live within its means, shouldn't we do the same. I'm all for higher fees, but the carriers are going to be looking to cut costs, not help us pay our fuel bills.

    Just my opinion

    JWG
    I know the voices aren't real, but sometimes they're right!
    brighton
    Member
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    Posts:139


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    06/04/2008 7:00 PM
    Just look how many firms are out there today. If Citizens FLA has 46 vendors, then mulitply that expotentially. All are fighting for the same piece of the pie and all the carriers know that. Many firms get the fee schedule and cut it by a few %, give more free miles and hope they get the business. The IA firms are only concerned with getting the business. Remember, they get their 30-40% without the worry of fuel cost, meals, hotels and making the house payment. They want volume. The carriers will go with the lowest pricing they can get. Just like Jim said, carriers are cutting adjusting costs and average paid per claim as well.

    Will there ever be a "heck no, we won't go!" by the adjusters? I say no. Just like there are too many IA firms and attorneys, there are too many who have adjuster licenses and many gave up everything to go for that big 'ol pot of gold. Untill the ranks are thinned out, many will grab anything they can and hope for the best.

    By the way, we have one pick-up that gets 20-21 on the hwy using gas and our Burb gets about 18. One is paid for and the other is paid for in the next few months. Cannot justify getting something that gets 24mpg and have $450/mo payments.
    Rocke Baker
    OdieWyatt
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    06/04/2008 8:37 PM
    Carriers will need to keep the big picture in mind when they consider denying requests for a fuel surcharge. I wouldn't want a bunch of disgruntled IA's working my claims. The cost increase is real. The impact on the lower and middle income IA is real. Even if the claims still get worked and no one says "I'll pass", they need to understand a 50% or more increase in the cost of gas for the adjuster is a huge impact at the end of the day. If claim volume is lean, they may stick with the schedules they have, but if there is enough claim volume and total indemnity payments, they will all up their schedules to get the job done and hopefully pass along the increases to their re-insurance carrier.
    JimGary
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    Posts:470


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    06/04/2008 10:39 PM
    Posted By Rocke Baker on 06/04/2008 7:00 PM

    By the way, we have one pick-up that gets 20-21 on the hwy using gas and our Burb gets about 18. One is paid for and the other is paid for in the next few months. Cannot justify getting something that gets 24mpg and have $450/mo payments.



    Rocke, you sound like your about as much of a tightwad as me. And there is no way I would take on new payments to save a few gallons, but consider this, if you drive 30000 mile a year and get 32 mpg thats 937.5 gals @ 3.75=3515.62, that same mileage @ 20 mpg is 1500 gals @3.75 =5625. a difference of  $2110. May be worth considering when you do buy something new.

     

    Right now working claims from home, I'm doing 3200 miles a month. I'm handling 15 -25 claims a week, decided not to go to storms this year (took to long to find this volume don't want to loose it). I'm getting 35-37 mpg, and carrying a 13' ladder in the trunk. And have found that a Lexus rx350 luggage rack will fit my Corolla, and look OK, if I need a longer ladder, so far I have not. No it won't pull a trailer, but if the wife kicks me out, the seats recline.

     

    Just food for thought

    JWG

     

    PS. I never thought I would ever drive a compact car, I'm a truck kind of guy, But I can live with it, and the money in the bank. I may upgrade to a Camry when I trade, maybe not.

    I know the voices aren't real, but sometimes they're right!
    Tom Toll
    Moderator & Life Member
    Senior Member
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    Posts:1865


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    06/05/2008 10:02 AM

    The days of windshield time will be over soon. I remember days of driving 200 to 300 miles per day on 3 to 4 claims when fuel was reasonable with no mileage compensation. I did not like it, but did it. I will not do it any longer. Our Dodge Hemi makes 18 to 21 MPG on the road, with an average of 17.8 road and city. It costs somewhere in the rich neighborhood of $90.00 to fill it. If the vendors and carriers don't realize that we are no longer commodities, but actual, competent adjusters, and pay us so we can survive, they will not have anyone to work their claims if a large event occurs. Not only is fuel out of sight, room rates are going up, food, equiplment, and the ever loving estimating systems. Oh man, don't get me started on estimating systems

    One thing Janice and I agreed on when we married many years ago was not to buy anything unless we could pay for it. We have kept that philosophy and will continue with it. That is one reason the 99 Ram truck we still have has 207,000 miles on it. It took a while saving money to buy another. The 05 Hemi that replaced it already has 70,000 on it. We will not be getting a new one until we have the funds to do so.

    The economic picture is changing on a daily basis. Our President does not feel we have a problem, but I can intelligently tell you we do have. Save your money, think twice about working for a vendor who has bent over just to get volume business, and stock up on non perishable food stuffs. It is better to be safe than sorry. I don't paint this as a negative thought , but one of reality. Just like becoming a good adjuster, many preparations are necessary and knowledge is one of them. Learn to develop all the knowledge about this industry that you can and only work for those vendors that care about what happens to you. This is one reason we have stuck with Cunningham Lindsey for these many years. We know we will be paid, we know we will get work if it is available, and then they know it will be done right and expeditiously.

    Success is not final, failure is not fatal: it is the courage to continue that counts.
    Tim_Johnson
    Member
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    Posts:243


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    06/05/2008 2:27 PM
    TWIA sent out a bullentin this week to all their approved vendors, it said to add a $10 fuel surcharge onto every file. It went onto state that if the handling adjuster is using his own vehicle that charge is to be passed onto the adjuster, and if the adjuster is driving a company car then the $10 is to be kept by the house. At least someone out there is living in reality.
    Tim Johnson
    Ray Hall
    Senior Member
    Senior Member
    Posts:2443


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    06/05/2008 2:35 PM

    Good post and very timely Tom, I predict this will be a very busy hurricane season and adjusters must be very wary about which vendor they work for as several  dozen more are now in business who were not in business in 2003. I always worked for vendors with a track record of paying the adjuster all the due compensation. Many of the 04 and 05 stories had two sides and a lot of sloppy work was not paid for and should not have been paid.I know some of the people who were cheated were set up to fail and their {incomlete} work was used to close the file without a second inspection. But new and old alike should ask the basic questions before spending thousands on credit cards and man hours and then getting cheated.

    This has been one of the most violet spring seasons in 10 years. How many adjusters have worked this year ? Were you one of them? If you did not work in 2008 you will be a most likely be pulled into a costly financial loss  with an unknown vender.  Be very careful of vendors who are subs of well known venders and well known carriers, the intentions may be good, but inexperience and under capitalization is very risky.

    Ray Hall
    Senior Member
    Senior Member
    Posts:2443


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    06/05/2008 2:50 PM

    Very good news about TWIA. I think they have about 200 to 300 thousand risk on the Texas Coast. They are a first class outfit and I think the vendors who work for TWIA should be contacted by experienced adjusters.I think its time ever carrier in Texas to be pressured to do the same.

    Why dont we all email our vender this week that we expect $10.00 for each file to compete with TWIA or we will not show up?

    ekraft
    Guest
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    Posts:30


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    06/05/2008 5:30 PM

    Some of the vendors I do daily work for, have already gone to the fuel surcharge.  Also, some of my daily claims I receive directly from the insurance carriers.  I have based the mileage fee and (included miles) on $2.499/gal.  I purchased a used 05 Chevy 2500HD a year and a half ago when diesel was less than gasoline.  I average 17.8mpg.  Based upon this, my fuel surcharge is computed on the average mpg and the amount of gallons over the "included" mileage.  So far, I have not had any problems from the carriers using this method.

    Jim Sims
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    06/08/2008 7:10 PM
    Question.....I have checked many vendors fee schedules and have found the majority, who are paying a fuel surcharge or mileage, only pay you the same percentage of mileage charge or fuel surcharge as they pay for the fee bill. Why? They are not sharing in the operating cost of my vehicle. I know, because they can......Well a "Pimp" (Vendor)will only play that game once with me. I understand they feel a need to prostitute themselves to the carriers in order to get the carriers business. I also understand their operating cost remain somewhat the same whether they buy the account with a $200 fee for a loss under $1,000 or $130 for a loss under a $1,000 fee schedule. The adjuster who does the work is the one who takes it in the shorts. The vendor operates in numbers he knows that he can gross the same paying $200 for a $1,000 loss or $130 all the vendor needs to do is hire more adjusters to turn more files. The adjuster, who does all of the work ,does not have that luxury. He can't turn and burn the files to make up the loss of income. His expenses increase based on the number of files handled. The vendor's expenses will increase none or very little.
    Do you think it's fair for a vendor to only pay you a percentage of a fuel surcharge and or mileage? What about photos?
    JimGary
    Member
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    Posts:470


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    06/09/2008 10:16 AM

    Jim, I've worked for vendors that give me 100% of mileage, I have 1 that take a small percentage for admin expenses ( which is fine, They pay upfront) , I have had 1 that paid the same percentage as the fee. Then there is PDA that payed .25 a mile and charges .85-1.25. I think I was paying them to work their files. Ahhh, my first experience as an independant..

     

    JWG

    I know the voices aren't real, but sometimes they're right!
    Boone
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    06/09/2008 8:59 PM

    Went from 2004 F-250 diesel, 17 mpg  to 2005 Toyota Camry, 30 mpg. It was tough to make the switch, but I could not take that gut wrenching feeling I got everytime I drove to claims as I watched the fuel guage. The last 2 weeks I drove the F-250 for work I put $525 in fuel in it. That pushed me over the edge and I bought the Camry.

     

    Attachments
    Jim Sims
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    06/09/2008 11:29 PM



    My question was.....Why (Not because they can) does a vendor take a percentage of your expenses and put that money into their pocket? Are they going to start sharing in a like wise percentage of your auto expenses? I don't think so. Right is right and wrong is wrong and that is wrong to take a cut of a man's mileage charges. I don't care how long you have worked for your Pimp or how much work they have given you, grow a back bone and tell them that practice will no longer work. Share cropping is over!
    If they want to start paying 60% of a man's auto expenses including, Insurance, taxes, depreciation,maintenance and gas then they are entitled to their 60% if not then it is wrong....











    HuskerCat
    Veteran Member
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    06/10/2008 12:37 AM

    In days gone by, with good fee schedules & lower gas prices....nobody noticed, or cared, or they decided to just accept it.  But now...???  Stupid is as stupid does.......maybe that's what some hope.

    Ray Hall
    Senior Member
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    Posts:2443


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    06/10/2008 1:53 AM

    As long as thousands of people are looking for jobs as catastrophe adjusters, why should the vendors stand up for a $10.00 per file fee for the fuel charge, unless they can get 40 % of it. A more descriptive title is commodity broker, and we are the commodity that needs the work.

    Several vendors are marketing regular daily claims up to $2500. for 60% of a $250.00 fee or $150.00, first 2 photos free and then $1.00 each over 2 and the first 50 mils free and then .65 cents per mile in excess of 50. Drive time over 50 miles is $39.00 per hour.

    works out like this    fee $150.00

    photos                                      6.00

    drive time                              39.00

    milage 150x .65=                97.50                                  $292.50         200 miles x 10 mph= 20 gal @ 4.25=$85.00, Insurance and depreciation on vehicle 200x .31=62.00

                                         -147.00 less fuel, insurance and depreciation. less cost of software lease $145.00 per month= 1.45 per fle or sub $148.45

    from gross of 292.50 less  expense cost to adjuster to drive to Huntsville, TX and return is 200 miles and will take 4.0 and 1.5 hours to upload, download, make apt. etc is 5.5 total hours comes to $26.99 per hour. Now answer all the adds looking for mullets to work regular daily files. Oh but you did not mention the $10,000 losses thats correct. The expense is still $148.45 per file, but you do get  60% of $450.00 or $270.00. So when you get home in the early afternoon the Mrs. ask how was your day honey and you smile and say it turned out fine honey it was a $10,000 loss instead of a $2500. loss and I made $120.00 more than I normally do on the small losses.

    JimGary
    Member
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    Posts:470


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    06/10/2008 9:09 AM

    Posted By Jim Sims on 06/09/2008 11:29 PM



    My question was.....Why (Not because they can) ......

     

    Unfortunatley you answered your question. If a vendor pays up front, I have no problem wit them taking a small admin percentage. But I will never again work for a vendor that takes 40%. Or like PDA that just pays .25 flat.

    I am working direct for 1 company that worked out a flat rate per file with me, no mileage. That has worked well for me. I just averaged my previous billing with them and used that as a flat rate, they have also doubled my volume as a result.

     

    Mileage in the past (at least for me) was always the gravy, Now I believe it will be as important as the basic fee, as will be the percentage.

    JWG

    I know the voices aren't real, but sometimes they're right!
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