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katadj

USA
315 Posts

Posted - 03/13/2004 :  18:44:19  Show Profile  Send katadj an AOL message
It seems that MD and other states have questioned the use of software pricing guides to settle losses.

This link should be required reading for everyone.

http://www.baltimoresun.com/news/weather/hurricane/bal-md.flood12mar12,0,254430.story


Edited by - katadj on 03/13/2004 18:55:26

CCarr

Canada
1200 Posts

Posted - 03/13/2004 :  20:01:05  Show Profile
Dave, great find and timely posting of it. The reporter is the same fellow that was making inquiries in the Bulletin Board.

It may not happen, but the article could be the necessary piece of baggage required to expose the playbook of the various characters in the story.

I think the issue is much deeper than what data is in any particular piece of estimating software. The issue could well be the incompetence and inadequate training and experience of so called "adjusters", newly turned loose as a warm body into the field with an estimating program at their disposal. If the ball gets thrown around enough, causing a more in depth review of the causes of their findings, the carriers may have to explain or rationalize the manner in which they deal with these situations, or acknowledge that they choose to blindly ignore them.

I would suggest that all possible help or cooperation be given the reporter. The opportunity is available to expose the practices of vendors turning warm bodies into the field - go back and read the post-Isabel postings in that regard. The opportunity is available to illustrate the value added benefit of carriers demanding that only trained and experienced "real adjusters" be deployed by vendors.

Failure to take that posture, will allow you to generically have mud thrown in your face, because, the software people have said their figures are just a guide and that an "adjuster is supposed to adjust". The claims vendor will blame it on the software people, and / or the next vendor, and / or on imposters acting as adjusters; and the carriers will once again say screw it, we have to focus on finding ways to deal with all of our claims ourselves.

Who is speaking for the "real adjuster"?
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Gale

USA
231 Posts

Posted - 03/13/2004 :  20:30:25  Show Profile  Visit Gale's Homepage
Well Simsol has been using the same database for years and since the NCE does not have removal cost associated with it line by line like the NRI (National Renovation and Insurance Repair Manual)from Craftsman Book Co as well then Simsol had to research that themselves. I can tell you if their unit cost were 50% lower than the rest of us in the business we would know about it because no carrier would be looking at the rest of the software on the market. Some powers to be needed a scapegoat and Simsol name popped up as a whipping boy. As you stated the "tools" are not the basic problem here. Well I expect to this will be discussed at PLRB that is opening tomorrow in Chicago. Not crazy about being in downtown of any big city after what happened in Spain this week.

Clayton, I agree with your points. There are claims handling issues out there and if the press can bring them out into the opening then they can be better addressed.

Edited by - Gale on 03/13/2004 20:39:55
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katadj

USA
315 Posts

Posted - 03/13/2004 :  20:38:17  Show Profile  Send katadj an AOL message
“Res Ipsa Loquitur” is in Latin, “The thing speaks for itself” as our comrade in arms JimF has so often quoted.

Our problem is that the “adjuster” is NOT LISTENING to the loss. They are listening to whatever they have been told in the past, or what they are being told by anyone that wishes to comment.

The “adjuster” is the only one at the loss, not a supervisor, team leader, underwriter, loss control analyst, carrier representative, NO ONE except the “adjuster”.

These fine representatives of the various carriers, be they there for wind or flood or whatever type of loss, must learn to listen.

Once I was told that “I could not learn anything with my mouth open”, how true that is.

IMHO, many of these claims will reopen and become subject to the appraisal clause of the policy.
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KileAnderson

USA
875 Posts

Posted - 03/13/2004 :  21:01:51  Show Profile
The article only mentions flood insurance. Is it just the flood insurance estimates that are too low as it seems to suggest? Is it just that the author doesn't understand the insurance industry and only mentions flood claims and nothing else? It seems to me that if flood repair estimates written on Simsol are low then wind estimates should also be low.

Is it a situation that Maryland, unlike down here along the Gulf and Mississippi, just doesn't get many floods so the insureds have never dealt with the mechanics and realities of a flood claim? Even in areas where floods happen quite often, policy holders quite often have limits far too low to provide for full repairs and if the building isn't insured at least 80% to value they are not entitled to 100% RC. Is he saying the estimates are 25% to 50% below actual costs at ACV or RCV?

The end of the article also quotes a contractor as saying (paraphrasing) he can't restore a house because some of it is rotten. That too is not going to be covered. It would be interesting to see how an insurance industry publication would handle this same story. It seems to me to be a little light on the details and heavy on slant against Simsol, carriers and adjusters.

As someone who is engaged to a journalist, I know that many enter the field to help the little guy and slay the dragons of big industry and big government. This article seems to be trying to do all three. Is this situation unique to Maryland? Simsol has been used in flood claims long before Isabelle. Is it just that Maryland is within spitting distance of Congress and many insureds are politically connected? Only time will tell.
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Gale

USA
231 Posts

Posted - 03/13/2004 :  21:25:55  Show Profile  Visit Gale's Homepage
Kile, you are on target it seems. Someone paid a premium and still owed the contractor a bunch of money when the the dust settled. I think Simsol has been using the NCE from the get go (15-20 years) so "now" it is bad. Now I guess NFIP will become RC policies? Guess who will pay for that "improvement"? KS,OK,SD,etc?
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katadj

USA
315 Posts

Posted - 03/13/2004 :  22:41:03  Show Profile  Send katadj an AOL message
Kile,

Mr. Moselle, the person who wrote the comment regarding the pricing for flood restoration, being 25-50% LOW, is the publisher of the NCE (National Construction Estimator). He, in his commentary suggests that restoration is far removed from new construction, the pricing guidelines used by some software programs.

Even the head guy at one of the software companies mentioned that their pricing should be subject to negotiation.

As every loss is different, as you so well know, no one can place an iron-clad price on a particular operation of restoration without knowing the conditions and inspecting them.

This, in and of itself, begs to be remembered by all. The pricing in every estimating program, is only a guideline. The actual conditions of the loss will dictate the correct price, both for materials and labor.

Even the NFIP admits to publishing GUIDELINE PRICING on a particular storm, for use as a reference.

In the event that this investigation holds water, it may behoove each of us to reconsider the software pricing that we are using, and make proper adjustments to the loss, based on the damage and conditions of the loss.

Any insurance policy written is a contract of indemnity, and the purchaser should not suffer any monetary loss, other than what was agreed to (the deductible).
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sbeau4014

USA
53 Posts

Posted - 03/13/2004 :  23:22:16  Show Profile
Whenever I've worked flood claims, I used DDS/Integra claims program. As to the comment of "incompetence and inadequate training and experience of so called "adjusters", newly turned loose as a warm body into the field with an estimating program at their disposal", keep in mind that the NFIP program used to require 5 years experience and I believe they still do. I've never used Simsol so I can't address how good or bad a program it is, but if there is blame to be put here it may well be on the vendor themselves that dictated to the adjuster what program to use.
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william s cook

53 Posts

Posted - 03/14/2004 :  06:58:40  Show Profile  Visit william s cook's Homepage
Remember folks, under most homeowner policies insurers only owe the insured, and I am paraphrasing the policy language "or the actual cost incurred".
William S. Cook
Public Adjuster
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KileAnderson

USA
875 Posts

Posted - 03/14/2004 :  08:12:27  Show Profile
Bill, it doesn't seem from the article that we are talking about a homeowners policy. The author seems to be writing about flood policies. It's the only one he mentions.
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Ghostbuster

476 Posts

Posted - 03/14/2004 :  08:44:21  Show Profile
Yeah, this reporter IS focusing on the flood aspect, that's what has gotten his attention. If he wants to broaden his scope to the entire catastrophe adjusting industry...HEY! Here we are!

You want dirt? We got dirt, Clayton is in charge of that. You want moldering skeletons? We store them over there in Jim Flynts shed next to the lawn mower. And all those vile deeds and miserable rationales are kept here in the palatially gorgeous penthouse suites of our Ministry of Propaganda out there on the veranda. (No, not that box, the one underneath it.)

That's right, for quality exposes, we can fulfill your Pulitzer Prize winning fantasies! Your contact will be none other than our own Dave Hood who will be known only to you as, (No...Deep Throat has already been used.), Ol' Bucket, and ably assisted by our Kile Anderson and Tom Whatley, codenamed Tin Bucket and Dinner Bucket.

Ya' know...this could even wind up as another blockbuster Hollywood movie. I better get started reserving the popcorn and T-shirt concessions.
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JimF

USA
1014 Posts

Posted - 03/14/2004 :  09:07:05  Show Profile
Aw Ghostbuster. Remember how all these "new adjusters" got here.

Clark Kent merely needs to sign up for the Leonard's "It's Adjusting, Stupid" one week course. It is there that one can get all the answers to the deep diabolical questions which plague our insurance universe.

Voila! (Yesterday I couldn't spell adjuster and now I are one)

Then he can infiltrate our ranks in camouflage and become the ultimate "insider." Plus become a know-it-all 90 day wonder (it never hurts to have a second career lined up, and we all know how shaky the newspapers have been with all the downsizing lately).

Plus as Miss Higginbotham used to say at Pinewoods Elementary, 'I bet he can speak in complete sentences and properly spell.' That alone would be a nice welcome around here sometimes.

It might be nice to have a newspaper reporter at one of our cat hoedowns in lieu of more tarpots.

And, it couldn't help but to only add to the edification of our ranks.

Edited by - JimF on 03/14/2004 09:16:15
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katadj

USA
315 Posts

Posted - 03/14/2004 :  10:18:44  Show Profile  Send katadj an AOL message
More information on this topic:

http://www.baltimoresun.com/news/local/bal-md.isabel09feb09,0,571425.story?coll=bal-local-headlines



http://www.baltimoresun.com/news/weather/hurricane/bal-md.flood10mar10,0,7336915.story?coll=bal-hurricane-headlines

Edited by - katadj on 03/14/2004 10:25:48
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CCarr

Canada
1200 Posts

Posted - 03/14/2004 :  10:49:00  Show Profile
I have emailed Andy Green, suggesting that his review of numerous CADO forums and threads, may shed more light on a bigger issue than simply the alleged inadequacy of a software estimating program. I have directed him to this thread, and asked for his comments or to ask any questions he may have.

Steve, my earlier comments were premised that the issues go beyond the parameters of the NFIP; and any measuring stick they may have relative to competence and experience.

My hope is that Andy Green will speak directly or indirectly for the "real adjuster", and illustrate the history of this industry's degradation in regards to the personnel utilized to handle the claims.
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LarryW

USA
126 Posts

Posted - 03/14/2004 :  11:51:44  Show Profile
Wow, a handful of policyholders didn't get the amounts they "wanted" under a flood policy. That is novel. And now the state of MD wants to regulate the adjusters the NFIP certifies. I guess if they have an airplane crash, they will want to regulate the FAA. I have to wonder if any of the MD politicians advocating this regulation of FEMA, their flood policies and/or adjusters even know how or why these "insurers" ever got into the flood insurance business. Also, one would wonder if they have ever read a flood policy, do they have a clue who the real insurer is?.

Larry Wright
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KileAnderson

USA
875 Posts

Posted - 03/14/2004 :  12:03:39  Show Profile
Larry,

Thankfully, states are in no way involved in regulating the NFIP. It is completely federally controled and states have no say in who, how, when, where or why claims are handled. All suits involving NFIP policies go through federal courts. States are completley out of the loop.

Isn't it funny that when floods happen every year in "Fly-over" country nobody cares about the difficulties and complexities of the flood policies and the paperwork and red tape involved in handling and closing a flood claim. But when something happens in the back yard of Capitol Hill, suddenly there are Senate hearings.

Edited by - KileAnderson on 03/14/2004 12:11:43
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