General Comtractors: Dealing with insurance companies on storm damage

[elkhuntfever]

In particular, State Farm insurance is balking on paying O&P. They have agreed to replace the roof, gutters, storm door, window screens, some damaged siding and painting the front door frame. When asked about O&P as there are several trades involved their response is "We go by the complexity of the job".
Any general contractors have suggestions?

[snuffy]

Whatever O&P IS??¿

[popper]

General Contractors will state they will work with the insurance co. but unless specifically stated in a contract, they have no obligation to do only work authorized by the insurance co. Lots of people going to get 'taken' with all the weather damage this year.

[tigweldit]

snuffy, O&P is overhead and profit.

[elkhuntfever]

Overhead and profit are usually paid to the general contractor. His job is to schedule the different trades ( roofers, siding installers, guttering installers etc..) to prevent congestion on the job site.

[shooter93]

I'm not completely sure I understand what you are asking but I've been a builder for 50 years now and have dealt with a lot of insurance companies. I just look over the damage that needs repaired and give them a price to repair it. Nothing more unless there is a possibility of hidden damage. Some companies are pretty easy to deal with and others it becomes a dog fight. I give them my price with all included and they take it or not. I have no obligation to do the job at the price they want me to.

[Thin Man]

A few years ago we had hail damage and asked the insurance company to send out their adjusters to determine what they would replace. On the day they were to arrive, the adjusters called to explain how they had taken longer on the job just ahead of mine and would arrive a bit late. Not a problem I stated and hung up the phone. Almost immediately my phone rang again and I answered. No one answered on the other end, but I heard a faint voice. The adjuster who had just spoken with me had fanny-dialed my number. I heard a conversation between an experienced adjuster and a novice adjuster. Mr. Experience was laughing as he explained how he had talked down the lady at the call they had just left, that they should have repaired more of the damages she claimed to her (then he named several parts of buildings, etc.), and for Mr. Novice to watch his lead to learn how to reduce the otherwise valid claims. They had a robust discussion and several laughs during their chat. When they arrived I watched them carefully but said nothing about what I had heard. We got all the repairs, plus some, that we expected. This was the usual roof, gutters, screens, painting, even damage to a camping trailer. After I got the front money check I called the local office of this insurance company and got the office manager on the line and shared the story of the mystery call with him. He stated these adjusters were imported from outside the area due to the huge number of claims they were processing. He even offered to review their work schedule to identify the lady in the call just ahead of me and to visit her for a "second review" of her claims. I didn't hear back if he ever did this, would have been a thrill if it really had happened.

Thin Man

[white eagle]

Its a shame some people make a habit of trying to get free money from fraudulent claims,
also sad that adjusters need to look at the bottom line of the company they work.
Like shooter93 said the general has his o/p already calculated in the bid or should have.
If they do not its time to look for a better GC.

[elkhuntfever]

Its a shame some people make a habit of trying to get free money from fraudulent claims,
also sad that adjusters need to look at the bottom line of the company they work.
Like shooter93 said the general has his o/p already calculated in the bid or should have.
If they do not its time to look for a better GC.

Interesting point of view. Not quite following your thought process.

[shooter93]

I don't know a builder who lists his overhead and profit costs on an estimate. You ask for a price for a certain amount of work done and we give you a total price for that work with all costs inclusive.

[too many things]

I am with shooter93 there is no line for O&P
most insurance has a price they are going to pay. Most times its a fair amount. " hidden damage" is something most times used by a young new contractor. and many times it is hard to get more money for it.

[454 shooter]

I have owned my own construction business for twenty years. The insurance companies around here have changed the way they pay claims. They used to pay the owner x amount of dollars and then the owner could repair or not at whatever price they could get the work done for and if there was money left over then the owner made money on the claim. Now they pay the amount of the contractors bill up to the insurance estimate.

What I tell people is that I don't need to do an estimate, I will work with the insurance adjuster to determine the damage and repair costs and do the work that they estimate for the amount that they pay. The owner then has to pay the deductible. Nothing more, nothing less. If the adjuster misses something I find it ahead of time and work out those costs before work begins. When hidden damage is discovered it is dealt with usually with pictures back and forth and is usually not a problem. If the owner wants additional work while I am there then that is an out of pocket expense to them.

Adjusters are human and make mistakes too. I have seen adjusters miss line items, sometimes they have been on 15 jobs that day after driving 20 hours the day before to get to the area with storm damage and won't get home to their families for weeks. Most adjusters want to be fair. I have had one that didn't want to replace all of the siding on the wall, only the three damaged pieces. The wall was only1 square at a cost of $265.00. Others replaced all of the house for two damaged walls

The latest one that I dealt with drug out the claim for a field fire that damaged the siding and underpinning on a mobile home for about three months before the owner got any paperwork. Then wouldn't respond to the first contractor that was hired. When he was no longer in the picture and I was hired it took another three months of dealing with the adjuster and his supervisor to get the damage estimate complete and approved. They finally released the funds( at least in part). I sent in a signed contract between me and the owner which is usually enough to get the depreciation released and when the weather broke, started repairs. With repairs complete I had to wait about 6 weeks to get the money from the mortgage company after the owner explained to them that they read their inspectors report wrong and that my work was complete. That was when we found out that the insurance company still had not released the depreciation. That was finally released to the owner(supposedly) three weeks ago. Then it can go to the mortgage company to be released to me. So after completing the job the first week of May, hopefully I will get paid in July, maybe August. Hey, its only money.

I have had owners call with a claim and I am the tenth contractor to show up and I just walk away. They are looking for the cheapest guy and I will not take all of the shortcuts to be the cheapest. I will do it right for a fair price or I won't do it at all.

If they don't want to pay O&P, request a different adjuster, talk to their supervisor and talk to your agent. If the job is of such a scale that three or more trades are required then a contractor is needed and should be compensated

[shoot-n-lead]

In the last 3yrs, we have had weather claims for well pump, one of our central air units and the roof of our house. The claims totaled a little over $30K...never had a problem with the insurance company. However, we were put on a watch list by the state insurance commissioner...that was a royal pain in the rump for 12 months. And, all items on the claims were lightening or hail caused...insurance company provided the state with their reports supporting the claims...state still insisted on harassing us for a year.

[elk hunter]

In the case of my recent fire damage claim the adjuster looked, measured, took pictures and came up with an estimate to repair the damage and sent us a copy a few days later. The estimate had a clause that stated if the work was done by a licensed contractor a certain dollar amount, in excess of the estimate, would be paid to the contractor for overhead and profit. If I did the work that money would not be paid. Since I'm not a contractor I don't have a business to maintain so no O&P.