Here is the problem. I will concede that we might have become overly litigious on hail claims. What you ignore is that the insurance industry has been trying to gut payments for roof replacements. The “System” that they use to come up with claims is Xactimate. Xactimate was built around line item pricing and then adding overhead and profit. Insurance companies took that model, and then continue to try and remove the overhead and profit. They wanted multiple tradelines, and then they wanted to invoke “complexity” without defining what that is. Then they want to try and repair a roof without fixing the chimney flashings or drip edge. All of this is acting in bad faith because the actuaries figure all of those costs into their models.
Want to fix all the lawsuits and public adjusters etc. Easy. Have the Insurance companies pay for all the line items and overhead and profit when there is a claim. The homeowners and the contractors all feel cheated by the current system. I know that when I have a claim paid properly with O/P and all the line items, I dont bitch, I dont appraisal, I dont call in a PA. I fix the roof, get paid and move on. Because they want to collect premiums on something and not pay it out, Insurance companies have created a monster. Fix the Insurance companies, the rest will fix itself!
Mr. Compton makes a good point. Gosh, if insurance companies just didn’t have to pay any claims at all, then they might be able to reduce premiums by as much as 10%!
Can the judges in these cases refuse to succumb to this dishonesty and throw the case out of court? Insurance companies should not be captive to this scheme.
Xactimate pricing, which is used by most insurers, comes from independent contractor surveys. Not surprisingly, it tends to be on the high side. Anybody who shops around and gets competitive bids can generally get repairs done for less than the Xactimate price. This is clearly not the cause of the flood of litigation in Texas. Almost none of the homeowners who file suit ever previously submit evidence to their insurer that they cannot get their repairs done for the price estimated by the insurer. In fact, most plaintiffs do not even seek contractor bids before filing suit. Their attorneys advise against it because they know that a bid from a legitimate contractor would validate the insurer’s estimate and destroy any chance for a big recovery in the lawsuit. The only estimate the plaintiffs’ attorneys want to see is one written by a professional plaintiffs’ estimate writer which has little relation to the covered loss or to reality. If widespread underpayments by insurers were the cause of the litigation explosion in Texas, it is reasonable to expect there would have been voluminous complaints to the Texas Department of Insurance over the past several years and TDI would have sanctioned numerous insurers. That has not happened. In fact, very few complaints have been filed with TDI about alleged underpayments, and most of those were unjustified, while at the same time the amount of lawsuits filed on the basis of alleged underpayments has skyrocketed. How can that be? Reread Badger’s article to refresh your memory. Until the current law in Texas is reformed to be in line with other states rather than acting as a “goose that lays golden eggs” for plaintiffs’ attorneys and their henchmen, the feeding frenzy of barratry and litigation will continue.
Sounds like all of the illegal windfalls are finally coming back to bite the Ponzi Pros. Glad to hear it! This balance he speaks about, is comical. Maybe if insurers would pay what they owe; there would be no need for creativity.
As a real GC, I/we agree to play on their field, under their lights on Home Coming. The deck is stacked. Xactimate is the software and pricing structure set by all of you poor ins companies.
It specifically says that RFG300 includes and RFG300 does not include STARTER AND RIDGE.. The drip edge does not come off with the shingles, nor do the pipe boots or vents. So when playing your violin, justify the omission of the “Remove” on these items by some adjusters.. How about how a certain carrier I know, scams their own team; the independent Cat Adjusters out of HUGE chunks of money? How do they do that, you say?? How about not letting them write the Ice and Water Shield, at the adjustment, EVEN THOUGH IT IS CODE??? Contractors have to supplement for it, does this not add to my cost ??? … The Cat guys get paid to write claims and the larger the claim the more they earn.. Don’t believe me? Just ask a Cat guy..
Xactimate also specifically says to ADD O&P if you are a GC. Don’t believe me? Read the white papers. The trained robots that repeat constantly “O&P is included in the pricing” BULL read the white papers or, “It is not complex enough, you did not have to coordinate anything complex” I will give that to you, it is not complex to me, ever, but it is not me it needs to be complex to. You seem to flip the psychology around pretty well when you are able to get contractors to argue that idiotic rebuttal. Imagine this: Roof, Siding and Gutters damaged in a storm, how many bids are most people trained to get??? 3! So you say it is not complex for anyone on the planet to meet 3 roofers, 3 siders, 3 gutter guys, check their references, insurance, go over the scope, write 3 start checks, coordinate the trades, pull permits, supplement the crooked carrier, invoice that same crooked carrier, inspect all the trades before paying in full for the job-THREE TIMES…. It is not over yet, He now has WARRANTY HELL to look forward to if something leaks or is not installed properly… The roofer says its the siders fault and the sider the gutter guys. The gutter guy says its the roofer and so on and so on….
Have you ever took the time to look at Verasik? That would tune up your violin a little as well..
BOTTOM LINE – the definition of INDEMNIFY means something totally different to me than it does the carriers. Who do you think is going to suffer when claims are under paid??? “No Starter or Cap paid for ma’am; we are going to have to cut corners to make a profit… ”
I could go on ALL DAY LONG! reading that sad story about how the scummy ins carriers are not able to go to Dubai this year because, someone else is making money… MAKES MY DAY!
Cry baby ” thats 40% profit margin” where did your attend business school??? To earn a 40% margin I would have to get a $10,000.00 claim completed for $2000.00 – $3000.00… What a scum bag!
I agree 1,000%!!!! There are 3 basic needs in life: food, water, and shelter. We are in the business of #3. Why should anyone else get to decide what our profit should be? I’m tired of being made out to be a criminal for making 40% margins IF that even happens. It’s a rare situation when it does. Why does Starbucks get to make 400% margin on a cup of coffee, or a tech company makes 300% on a cell phone, etc… yet the one that puts a roof over your home and business that covers all that stuff is told to ‘sit down and shut, take what we give you, 20% is enough’. BULL.
To all insurance carriers, if you don’t like taking risk, then don’t. You sound like a football player who’s crying because he took a hit on the field. It’s football jackass! What did you think would happen. Suck it up and raise premiums if you must. But don’t take the money and then act like you’re so surprised and act like it’s everyone else’s job to absorb the costs so that you can make more.
Your problem, not the contractors. Stop cheating everyone. You created this monster yourself. The hail has always fallen, the contractors have always been contracting, it’s the carriers that invented Xactimate, Eagleview, Hail Reporting software, etc… etc… etc… All 100% funded by the P&C industry. You started trying to be clever and cut here and there and no it’s fully bitten you in the ass. Poor, poor, you….
Why can’t we all just get along? As Mr. Badger points out it is the consumer who will lose in the end. You can continue your fight against the bad insurance company, and they will battle back as Mr. Badger suggests, with rate increases, exclusions, large deductibles and so on. Ultimately you are cutting off your nose to spite your face. Who will pay for these roof replacements when there is no insurance coverage for them?
He is the most egregious example of attorney abuse in the state.
I know of one claim adjuster who was hired by the carrier to simply drive by the insured’s house and verify a new roof had been put on. Casting a wide for anyone with money in their pockets, he was sued for $400,000 by Mostyn.
Mostyn included me in several of his lawsuits. In one, he sent service of suit to an address of an apartment in Baltimore (I have lived in Texas since 1976). Obviously, one of his lackeys failed to change the address in their pro-form complaint from the last suit he filed.
This guy is a disgrace to the profession and should be disbarred.
Public adjusters are just as bad. They turn a simple repair into a complete remodel of the house.
Insurance companies throw fuel on the fire. I handled one claim where the house was insured by a different company. I called the plaintiff’s attorney and told him who he should be suing, but they did nothing. The case continued, and my client eventually paid $80,000 on a house they did not insure just to get the attorney to go away.
With this recent rash of storms in North Texas, I, as an underwriter, would consider hail to be a catastrophic event like flood and earthquake, and exclude the peril entirely. At the very least, quit providing anything other than ACV.
Finally, we need the courts to stop interpreting policy language to include coverage where none exists.
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Here is the problem. I will concede that we might have become overly litigious on hail claims. What you ignore is that the insurance industry has been trying to gut payments for roof replacements. The “System” that they use to come up with claims is Xactimate. Xactimate was built around line item pricing and then adding overhead and profit. Insurance companies took that model, and then continue to try and remove the overhead and profit. They wanted multiple tradelines, and then they wanted to invoke “complexity” without defining what that is. Then they want to try and repair a roof without fixing the chimney flashings or drip edge. All of this is acting in bad faith because the actuaries figure all of those costs into their models.
Want to fix all the lawsuits and public adjusters etc. Easy. Have the Insurance companies pay for all the line items and overhead and profit when there is a claim. The homeowners and the contractors all feel cheated by the current system. I know that when I have a claim paid properly with O/P and all the line items, I dont bitch, I dont appraisal, I dont call in a PA. I fix the roof, get paid and move on. Because they want to collect premiums on something and not pay it out, Insurance companies have created a monster. Fix the Insurance companies, the rest will fix itself!
Mr. Compton makes a good point. Gosh, if insurance companies just didn’t have to pay any claims at all, then they might be able to reduce premiums by as much as 10%!
Can the judges in these cases refuse to succumb to this dishonesty and throw the case out of court? Insurance companies should not be captive to this scheme.
Xactimate pricing, which is used by most insurers, comes from independent contractor surveys. Not surprisingly, it tends to be on the high side. Anybody who shops around and gets competitive bids can generally get repairs done for less than the Xactimate price. This is clearly not the cause of the flood of litigation in Texas. Almost none of the homeowners who file suit ever previously submit evidence to their insurer that they cannot get their repairs done for the price estimated by the insurer. In fact, most plaintiffs do not even seek contractor bids before filing suit. Their attorneys advise against it because they know that a bid from a legitimate contractor would validate the insurer’s estimate and destroy any chance for a big recovery in the lawsuit. The only estimate the plaintiffs’ attorneys want to see is one written by a professional plaintiffs’ estimate writer which has little relation to the covered loss or to reality. If widespread underpayments by insurers were the cause of the litigation explosion in Texas, it is reasonable to expect there would have been voluminous complaints to the Texas Department of Insurance over the past several years and TDI would have sanctioned numerous insurers. That has not happened. In fact, very few complaints have been filed with TDI about alleged underpayments, and most of those were unjustified, while at the same time the amount of lawsuits filed on the basis of alleged underpayments has skyrocketed. How can that be? Reread Badger’s article to refresh your memory. Until the current law in Texas is reformed to be in line with other states rather than acting as a “goose that lays golden eggs” for plaintiffs’ attorneys and their henchmen, the feeding frenzy of barratry and litigation will continue.
Sounds like all of the illegal windfalls are finally coming back to bite the Ponzi Pros. Glad to hear it! This balance he speaks about, is comical. Maybe if insurers would pay what they owe; there would be no need for creativity.
As a real GC, I/we agree to play on their field, under their lights on Home Coming. The deck is stacked. Xactimate is the software and pricing structure set by all of you poor ins companies.
It specifically says that RFG300 includes and RFG300 does not include STARTER AND RIDGE.. The drip edge does not come off with the shingles, nor do the pipe boots or vents. So when playing your violin, justify the omission of the “Remove” on these items by some adjusters.. How about how a certain carrier I know, scams their own team; the independent Cat Adjusters out of HUGE chunks of money? How do they do that, you say?? How about not letting them write the Ice and Water Shield, at the adjustment, EVEN THOUGH IT IS CODE??? Contractors have to supplement for it, does this not add to my cost ??? … The Cat guys get paid to write claims and the larger the claim the more they earn.. Don’t believe me? Just ask a Cat guy..
Xactimate also specifically says to ADD O&P if you are a GC. Don’t believe me? Read the white papers. The trained robots that repeat constantly “O&P is included in the pricing” BULL read the white papers or, “It is not complex enough, you did not have to coordinate anything complex” I will give that to you, it is not complex to me, ever, but it is not me it needs to be complex to. You seem to flip the psychology around pretty well when you are able to get contractors to argue that idiotic rebuttal. Imagine this: Roof, Siding and Gutters damaged in a storm, how many bids are most people trained to get??? 3! So you say it is not complex for anyone on the planet to meet 3 roofers, 3 siders, 3 gutter guys, check their references, insurance, go over the scope, write 3 start checks, coordinate the trades, pull permits, supplement the crooked carrier, invoice that same crooked carrier, inspect all the trades before paying in full for the job-THREE TIMES…. It is not over yet, He now has WARRANTY HELL to look forward to if something leaks or is not installed properly… The roofer says its the siders fault and the sider the gutter guys. The gutter guy says its the roofer and so on and so on….
Have you ever took the time to look at Verasik? That would tune up your violin a little as well..
BOTTOM LINE – the definition of INDEMNIFY means something totally different to me than it does the carriers. Who do you think is going to suffer when claims are under paid??? “No Starter or Cap paid for ma’am; we are going to have to cut corners to make a profit… ”
I could go on ALL DAY LONG! reading that sad story about how the scummy ins carriers are not able to go to Dubai this year because, someone else is making money… MAKES MY DAY!
Cry baby ” thats 40% profit margin” where did your attend business school??? To earn a 40% margin I would have to get a $10,000.00 claim completed for $2000.00 – $3000.00… What a scum bag!
I agree 1,000%!!!! There are 3 basic needs in life: food, water, and shelter. We are in the business of #3. Why should anyone else get to decide what our profit should be? I’m tired of being made out to be a criminal for making 40% margins IF that even happens. It’s a rare situation when it does. Why does Starbucks get to make 400% margin on a cup of coffee, or a tech company makes 300% on a cell phone, etc… yet the one that puts a roof over your home and business that covers all that stuff is told to ‘sit down and shut, take what we give you, 20% is enough’. BULL.
To all insurance carriers, if you don’t like taking risk, then don’t. You sound like a football player who’s crying because he took a hit on the field. It’s football jackass! What did you think would happen. Suck it up and raise premiums if you must. But don’t take the money and then act like you’re so surprised and act like it’s everyone else’s job to absorb the costs so that you can make more.
Your problem, not the contractors. Stop cheating everyone. You created this monster yourself. The hail has always fallen, the contractors have always been contracting, it’s the carriers that invented Xactimate, Eagleview, Hail Reporting software, etc… etc… etc… All 100% funded by the P&C industry. You started trying to be clever and cut here and there and no it’s fully bitten you in the ass. Poor, poor, you….
Why can’t we all just get along? As Mr. Badger points out it is the consumer who will lose in the end. You can continue your fight against the bad insurance company, and they will battle back as Mr. Badger suggests, with rate increases, exclusions, large deductibles and so on. Ultimately you are cutting off your nose to spite your face. Who will pay for these roof replacements when there is no insurance coverage for them?
Two words: Steve Mostyn
He is the most egregious example of attorney abuse in the state.
I know of one claim adjuster who was hired by the carrier to simply drive by the insured’s house and verify a new roof had been put on. Casting a wide for anyone with money in their pockets, he was sued for $400,000 by Mostyn.
Mostyn included me in several of his lawsuits. In one, he sent service of suit to an address of an apartment in Baltimore (I have lived in Texas since 1976). Obviously, one of his lackeys failed to change the address in their pro-form complaint from the last suit he filed.
This guy is a disgrace to the profession and should be disbarred.
Public adjusters are just as bad. They turn a simple repair into a complete remodel of the house.
Insurance companies throw fuel on the fire. I handled one claim where the house was insured by a different company. I called the plaintiff’s attorney and told him who he should be suing, but they did nothing. The case continued, and my client eventually paid $80,000 on a house they did not insure just to get the attorney to go away.
With this recent rash of storms in North Texas, I, as an underwriter, would consider hail to be a catastrophic event like flood and earthquake, and exclude the peril entirely. At the very least, quit providing anything other than ACV.
Finally, we need the courts to stop interpreting policy language to include coverage where none exists.