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Is My Contractor Charging Me A Fair Price On My Insurance Claim?

  

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Is My Contractor Charging Me A Fair Price On My Insurance Claim?

How Do I Know If The Contractor Is Charging Me A Fair Price On My Insurance Claim? This is quite a common question and the simple answer is that insurance contractors in most cases do not determine pricing. Pricing is determined by the insurance companies who use a program called Xactimate.  http://www.xactware.com/solutions/claims-estimating

 There are three components to determine the final price of a Insurance claim:

First: Scope of Work:  Scope of work is the agreed upon issues that the insurance claim is being filed about.  This can range from a water heater busting and flooding the entire house to a fireplace starting a fire and burning the house down.  The scope of work is all the components that have to be fixed to get the house back to pre-loss condition.  The scope of work is usually agreed upon by the insurance adjuster and the contractor.  However, the contractor generally does not determine the scope of work, the insurance company does.  Sometimes if a contractor is a preferred vendor and the loss is not a major loss the insurance company lets the contractor determine scope of work and submit the loss to them. 

Second:  Quoting the Job:  This is done in most cases through Xactimate.  Xactimate is a very robust program that most adjusters and good restoration contractors all use.  It is not software that somebody accidentally picks up and starts using.  Most of the time the contractor has to be trained and pays a licensing fee to Xactimate for the use of the software, however it is the platform in which the major insurance companies price from.  Pricing is undated monthly and adjusters and contractors can simply change the zip code to get different pricing in different parts of the country.  These quotes are generally 6 to 100 pages long and detail out everything being done piece by piece. See Below

Third: Construction and Supplements:  Once the construction gets underway, if there are any items not in the original scope of work these items will be brought to the adjusters attention.  The adjuster has the ability to approve or deny the issues. If the issues are approved then these items are considered supplements. A supplement can range from the replacement of sub floor due to water leak to replacing HVAC systems that could not be tested on the house due to no power. Supplements are generally items that can not be determined with out causing further damage to the house at the time the scope of work is being determined. 

Finally there is the deductible.  The deductible is the elephant in the room however in the State of Georgia where we do business this is no longer an issue. 

Link to House Bill 423

http://gallery.mailchimp.com/178d2748493ec329fa42be728/files/Georgia_Law_Regarding_Residential_Roofing_Contracts_and_Incentives.1.pdf

House Bill 423 states that:

"Advertise or promise to pay or rebate all or any portion of any insurance deductible as an inducement to the sale of goods or services.  As used in this subsection, the term promise to pay or rebate includes (A) granting any allowance or offering any discount against the fees to be charged, including, but not limited to an all or discount in return for displaying a sign or other advertisement at the insured's premises, or (B) paying the insured or any person directly or indirectly associated with the property any form of compensation, gift, prize, bonus, coupon, credit, referral fee, or other item of monetary value for any reason."

So the real answer to the question is that the answer is all in the insurance paper work.  Now the real trick is to make sure the contractor that is helping you is a good contractor.  We are big advocates of the BBB and getting a referral list from the contractor you are considering using.  All good contractors should be active with the BBB willing to do both. 

I hope this has helped you in knowing if your contractor is charging you a fair price. Also, if the contractors that built the houses in the two pictures below are the same price, why not go with the one that has a proven track record for success? We do business in and around Atlanta, Georgia all the way to Macon, Georgia and would love to help with any of your restoration or construction needs. 

Orion Restoration                                             Other Contractor