Estimate line items-Commercial (Full Version)

All Forums >> [Public Forum] >> General



Message

CATdawg -> Estimate line items-Commercial (8/18/2006 10:09:38 AM)

  In the Storm Discussion forum, Kittycat started a thread entitled, "FIRE DRILL" (08/16/06) and requested info from members on how to become better-prepared for deployment. I would like to be more specific in this thread.
 1) What line items seem to be most commonly in dispute between adjusters and contractors?

 2) What line items do contractors think are necessary to write a specific estimate that IAs typically leave out? ( please  
     give an example).

 3) What line items drive you admins and file examiners nuts, and why?

 4) Which items or operations are frequently overlooked by the adjuster, thus leaving "money on the table"?

  In replying, please reference a specific question by quoting or naming the question's number.



JGardner -> RE: Estimate line items-Commercial (8/18/2006 11:53:34 AM)

Unless the insured has a special endorsement, the policy has a limit of $1K for signs.  It's a good idea to remember to have that deductible absorbed when the sign is damaged and the costs are above its limit. 

The same goes for deductible absorption on debris removal costs ($10K or 25%).  There's more to this particular coverage item, so consult your CP 10 10 form for the fine print.  I'm just too lazy to type it all in here.

For the two items above, make sure that you include the amount of the entire loss along with the limit of coverage on your estimate.  Don't stop at the limit.  This will allow you to assist the insured in preparing their taxes.  Without telling them about the tax write-off potential, just tell them to speak with their accountant.  This also goes for lightning struck trees on your residential policies: don't just stop at $500 or what ever your policy's limit is.  Write the total value of the tree and let the additional coverage limit cap the dollar amount of the tree.

With absorbing deductibles, there are some London carriers that pay the limit of the policy and subtract the deductible from it (instead of absorbing it), so be sure to become familiar with their practice and/or policy.

Fences aren't covered under your standard ISO CP 10 10 form.  Neither are paved surfaces- "Bridges, roadways, walks, patios or other paved surfaces" (tennis courts, sidewalks, parking lots, etc).  Now, is a rubico (the gravel stuff that is watered daily) tennis court considered a paved surface or outdoor equipment?  One carrier of mine saw it as outdoor equipment. 

I'm aware that others would likely disagree, so review the policy in depth and try to find coverage (Mueller Principle).  The last thing you want to do is get defensive when an examiner asks about unusual items you've recommended coverage for.  A good approach to this is to call the examiner to discuss these unusual items prior to submitting your estimate.

While going with this approach, you impress the carrier with several things: knowledge of the policy, customer concern, and claims that stay closed.



Tom_Toll -> RE: Estimate line items-Commercial (8/18/2006 2:02:22 PM)

Good post Judson. Commercial policies can be tricky. One must have a copy of the Dec sheet to be able to determine coverages for specific items. Many items are added as endorsements on the CP. BOP policies are the same. The Dec page becomes a pre-requisite for proper handling of the file.





TrevorWhitten -> RE: Estimate line items-Commercial (8/18/2006 3:24:56 PM)

Don't stop at the limit.  This will allow you to assist the insured in preparing their taxes.  Without telling them about the tax write-off potential, just tell them to speak with their accountant.  .       JGardner  
quote:



This is something that I was wondering about.   When adjusting a total loss and if the deductable can be absorbed, is it our responsibility to continue to work on the estimate to help them with the insureds taxes?  Afterall, we only get paid up to policy limits.  I just don't think it is my responsibility.  Can someone explain why I should  or, If I shouldn't explain the reason why not?



ddreisbach -> RE: Estimate line items-Commercial (8/18/2006 3:32:25 PM)

Here's a few thoughts on things I've seen:
 
No. 1) The most common area of dispute is pricing.  Actual labor and material prices in a cat area go up a lot faster than database prices.  I find myself constantly tap-dancing around that problem.
 
No. 2) When working supplements the most commonly missed class of line items I've seen are specialty equipment items such as scaffolding, man-lifts, cranes, etc. 
 
No. 3) If you change the database pricing or put in line items (especially expensive ones) without a good explanation and justification you're gonna get the claim back.  Or at least a phone call.
 
No. 4) I've seen a lot of claims where the adjuster replaced the roof and the wet drywall, but did not replace the ceiling insulation.  If it's blown insulation - guess what?  It falls out when the ceiling is removed.  Some adjusters don't think of these things.
 
My pet peeve is the insurance agent that doesn't sell the appropriate coverage.  For instance, last year I had two meat markets and a seafood market that didn't have coverage for off-premises power outage.  In another case I had a strip center with a $27,000 sign.  The agent (his nephew) didn't know he needed add'l sign coverage.  And when you explain the lack of coverage to the insured, who is the bad guy?  His buddy (or relative) the agent, or the mean, nasty adjuster who he just met and who is standing in front of him?  Zero points for the correct answer.



ddreisbach -> RE: Estimate line items-Commercial (8/18/2006 3:49:00 PM)

Trevor - A couple thoughts:
 
1.) Some vendors/carriers will pay the adjuster based on the gross loss, even if it goes over the policy limit.  Mine does.  If there's a limit (other than "reasonable") I don't know what it is.   
 
2.) It's the right thing to do to help someone whose business has been devastated.  And it usually doesn't take a lot of add'l time.  If it does... use your best judgement. 



kittycat -> RE: Estimate line items-Commercial (8/18/2006 4:14:34 PM)

Because restoration/rebuild/new construction in residential and commercial alike are a chain of events and each dependent on a begining point and stage/phase of construction completion...how could you just stop a complete estimate when it reaches policy limits.  I would think that an estmate is a estimate: complete with all the nuts and bolts, t's crossed and i's dotted.  Now that is full service.  The insured goes to the SBA w/ IA's estimate as underinsured, in turn, lent money requiring additional insurance on a business and/or homeowner reconstruction loan at very favorable interest rates.  The insurer legitimately increases premium, the insured increases coverages, the IA increases most likely his client relationships/employment income.  I for one would be that IA who goes in for quality as a business person, leaving none of my insureds wounded w/out their 1st aid kit stocked w/resources.  Might save me from from those ugly conflict moments when the hard line of policy limits is drawn.



TrevorWhitten -> RE: Estimate line items-Commercial (8/18/2006 7:38:25 PM)

Thanks David!



CCarr -> RE: Estimate line items-Commercial (8/18/2006 8:46:00 PM)

A comment towards the discussion of whether or not to estimate the loss beyond policy limits.

First consideration is the carrier instructions regarding both: the fee structure based on gross loss versus policy limits; whether or not the instructions are clear on what you get paid for, and whether co-insurance requirements have been waived by the carrier..  These instructions must be clear.

Second, no one has mentioned co-insurance, an integral part of any commercial building policy, or even more times than not, business contents, stock, equipment etc; as per definition.

If the carrier will only pay gross loss up to policy limits, they are in fact saying disregard any consideration of co-insurance requirements.

If the carrier has not stipulated estimate "ceilings"; then you better go to the end of the estimate and consider and calculate co-insurance.



racko -> RE: Estimate line items-Commercial (8/18/2006 9:02:45 PM)

quote:

ORIGINAL: ddreisbach


My pet peeve is the insurance agent that doesn't sell the appropriate coverage.  For instance, last year I had two meat markets and a seafood market that didn't have coverage for off-premises power outage.  In another case I had a strip center with a $27,000 sign.  The agent (his nephew) didn't know he needed add'l sign coverage.  And when you explain the lack of coverage to the insured, who is the bad guy?  His buddy (or relative) the agent, or the mean, nasty adjuster who he just met and who is standing in front of him?  Zero points for the correct answer.


The inside file handler may deal with this without your knowledge.  This $27K sign you mention...it might be a $10K sign mounted on a $17K structure/monument/frame, whatever.   In the absence of a policy definition for "sign", there could be coverage on the policy for that structure/monument/frame that is not subject to the sign limit.  As an IA in the field, without the luxury of having the full policy language in front of you...you just don't know.  Run it by your inside contact.

Another thought...how about that painted signage on storefront windows?  Now you have 2 limits to work with, glass & signage.

This has gotten off topic maybe, but...  



CATdawg -> RE: Estimate line items-Commercial (8/18/2006 9:08:00 PM)

quote:

ORIGINAL: CCarr..., no one has mentioned co-insurance, an integral part of any commercial building policy, or even more times than not, business contents, stock, equipment etc; as per definition.

  Clayton, funny you should mention this subject. I am extremely interested in the possible debate between members of CADO on this. Would you consider a separate thread to address this subject? I'm trying to confine this thread to a very limited specificity, and your post deserves a whole thread unto itself.



CCarr -> RE: Estimate line items-Commercial (8/18/2006 9:18:45 PM)

Sure Lee, but I can't foresee much of a "debate", the co-insurance requirement is either in the policy or it isn't.

There has been a thread about co-insurance last year or so, if I recall there was a fair bit of detail and methodology / process.  It is in the archives somewhere.



ddreisbach -> RE: Estimate line items-Commercial (8/19/2006 11:53:00 AM)

quote:

ORIGINAL: racko

The inside file handler may deal with this without your knowledge.  This $27K sign you mention...it might be a $10K sign mounted on a $17K structure/monument/frame, whatever.   In the absence of a policy definition for "sign", there could be coverage on the policy for that structure/monument/frame that is not subject to the sign limit.  As an IA in the field, without the luxury of having the full policy language in front of you...you just don't know.  Run it by your inside contact.

Another thought...how about that painted signage on storefront windows?  Now you have 2 limits to work with, glass & signage.



Interesting post, racko.  Let me pick your brain on this.  You've got alot more experience at this than I do...

First, I always have the full policy language in front of me.  If I don't have some obscure endorsement I call my admin and get it.  How can an adjuster do their job without having the policy language?  Is this a common thing with some carriers?

Second, my file examiner won't change a thing without my knowledge.  Normally, they'd send it back to me for any necessary changes.  Again, do other carriers / vendors change your estimates without your knowledge?  How can an adjuster review the estimate with the insured if there's a chance it's been changed?

Third, you're right about the painted signage on glass.  Coverage depends on policy form, endorsements and the specifics of the situation. 



CATdawg -> RE: Estimate line items-Commercial (8/19/2006 12:16:31 PM)

quote:

ORIGINAL: CCarr ... the co-insurance requirement is either in the policy or it isn't.
... It is in the archives somewhere.

You're right...sorry!



racko -> RE: Estimate line items-Commercial (8/19/2006 12:33:43 PM)

quote:

ORIGINAL: ddreisbach

Interesting post, racko.  Let me pick your brain on this.  You've got alot more experience at this than I do...

First, I always have the full policy language in front of me.  If I don't have some obscure endorsement I call my admin and get it.  How can an adjuster do their job without having the policy language?  Is this a common thing with some carriers?

Second, my file examiner won't change a thing without my knowledge.  Normally, they'd send it back to me for any necessary changes.  Again, do other carriers / vendors change your estimates without your knowledge?  How can an adjuster review the estimate with the insured if there's a chance it's been changed?

Third, you're right about the painted signage on glass.  Coverage depends on policy form, endorsements and the specifics of the situation. 


Let me preface by stating that I worked inside for a major commercial carrier following Katrina.  What an experience, inside after several years of INDEPENDENCE outside the walls!!  Anyway, gotta admit that most of the field guys likely did not have access to policy language.  Just too many coverage forms, and that was not their responsibility...it was ours.  On each & every assignment I sent out to the field, I would try to give out the pertinent coverage info based on the initial phone scope/contact with the insured.  And I would ask the FA to call if anything unusual came up, etc., but that didn't always happen.  Just had a handful of really good FA's that would call me regularly with questions, and it took some time to figure out who those good FA's were.  Like every carrier/vendor found out, just too many inexperienced folks got thrown to the wolves due to Katrina. My preferred FA's did have a good handle on the coverage forms after awhile, it was just a matter of time though.

When the final reports/estimates came in, there were often disputes/negotiations that went on with the insured &/or PA.  We did that in-house if possible, or sent it back to the FA.  Sometimes it only involved pricing, sometimes it was an issue like your sign limitation scenario.  We would always send a letter along with the claim payment, enclosing the FA estimate and notate any changes/agreements we had made to that estimate.

I guess the biggest thing was, these commercial policies we were working with had so many additional coverages & additional limits it would make your head spin.  Mine is still spinning...LOL.



JGardner -> RE: Estimate line items-Commercial (8/19/2006 7:39:51 PM)

Just a word of caution: for those without a copy of pertinent policy information, you are asking for trouble.  Because there's too many forms is not a valid excuse.  You can smooth talk your way around coverage issues until you ask someone who has the policy, but it will eventually come to bite you if you don't do your part. 

Before you handle another claim, do everything humanly possible to get the policy language for that given carrier.  Any storm vendor worth their salt will understand the importance of having a copy handy.  Furthermore, ISO is not the only publisher of policy information.  There are plenty of policy variations out there and credibility is not lost (in case that is your fear) when a copy is requested.  Without policy forms or a general personal knowledge of them, you are just an Estimator.

Before I give people an answer, they must have first put forth some exertion to reach a solution (i.e. read the policy and come to an area that's not clear).  If I always gave them the answer and they had not done any effort themselves, I would be doing them and myself a disservice- especially in the middle of a cat.  Your colleagues will respect and appreciate you when you your part first.



rass3742 -> RE: Estimate line items-Commercial (9/6/2006 10:37:31 PM)

Another word of caution, regarding deductible absorbtion.

Don't forget that you can only absorb a deductible into an item for which there is coverage, just not enough; items that are not covered, don't make allowance for the absorbtion.

Let's use the sign noted above as an example: if there is $1K coverage for signage and you have $27K in sign damage (the mounting/structure theory notwithstanding, for this example), you could absorb up to $26K of the deductible.  However....using the same damages scenario....if your policy excludes signs, unless scheduled, and there is no sign scheduled, there are no damages to absorb the deductible into.

Inadequate policy limits and non-coverage are two different things.



JGardner -> RE: Estimate line items-Commercial (9/6/2006 11:55:39 PM)

Good point, Eric.

I have a quick comment referencing the issue of billing based on the GLA v. Policy Limit.  Coincidentally, I was reviewing the billing issues portion of a catastrophe manual today and reviewed this forum tonight.  If you are allowed to bill on the basis of the GLA, use good common sense.  There would be nothing more offensive for a salaried staff adjuster to see an IA's fee bill based on a $27,000 sign when there was only $1,000 of coverage in their CP 10 10 policy.

A more common occurrence of this issue would involve the Bldg. or BPP portion of an ACV policy.  You want to get the estimate above the limits (within coverage) to the extent that the insured is getting the full benefit of their policy.  Yet, you don't want to write up $150K of damage on a $30K policy.

Clayton, you're absolutely right about the Coinsurance issue.  This is sometimes waived by residential carriers in the midst of a major catastrophe.  However, the commercial carriers I worked for last year required it with a passion.  Let's just say I was surprised at the numbers and value at which insured's intentionally underinsured their property.  Still trying to find the archived information about Coinsurance.  Will post a hyperlink when I do.



JGardner -> RE: Estimate line items-Commercial (9/7/2006 12:27:45 AM)

While searching co-insurnace issues, I found a thread involving the comparison of Business Interruption coverage between the BOP and CP policies.  Ancillary information from this thread indicates there's no coinsurance clause in the BOP forms, but it exists in the CP forms.  This is a terrific thread (in content & flow) for an attachment to this thread's topic of Commercial Estimates. (NOTE: Posts are organized from the bottom up.)

The additional coverage for Civil Authority in the CP 0030 policy form provides up to three (3) weeks of coverage 72 hours after the declaration.  If there's no direct physical damage from a covered loss, then the insured is only allowed for the three (3) weeks.  This information is especially pertinent in the case of Rita and Katrina claims from New Orleans.



JGardner -> RE: Estimate line items-Commercial (9/7/2006 12:41:01 AM)

No luck on finding other peoples' posts regarding co-insurance methodology.  Clayton, once you find the dry ice, would you please share some of your own insight on the topic?

What about signage (no endorsement for the insured's $27,000 sign, just the additional coverage of $1K), glass, and other items that don't have an endorsement, but do have limited coverage under the CP 10 10 form?  Suggestions on the approach to co-insurance evaluation of stock &/or contents?  I would venture to guess that most adjusters are like me stop at the building valuation and continue to adjust the rest of the loss.  If the BPP or BI loss exceeds the policy limits, then it's obvious that a penalty is necessary and would be applied.



Page: [1] 2   next >   >>

Valid CSS!




Forum Software © ASPPlayground.NET Advanced Edition 2.4.5 ANSI
7.617188E-02