What Exactly Is The Cost Of Doing Business?
November 26th, 2016
We are General Building Consultant’s and we are a 3rd party estimating billing/AR company. Besides Florida we are in 14 other states now.
We have between 60 and 70 restoration contractors that we handle the above for. Some are totally independent of carriers relations and some maintain carrier relations. Each time we write an estimate we cater to our clients wishes on how they like the estimate written or as many of our client do is just let us do it out way off their scope of work. But one of the things we are running into from the insurance company is there refusal to pay for certain items.
We here the phrase we are not paying for an Emergency Service Call because it is the cost of doing business. Or how about you labor hours are and the labor times are built into the equipment cost and should not exceed this amount. In other words, the cost of doing business. Here is our thoughts on this and the thoughts of our clients; how is that the cost of doing business? Most technicians are on an hourly and as far as I know there is a cost to driving a vehicle and a hourly cost for a tech(s) to go to the loss and back. How about tech time on site to check the moisture readings and manipulate the equipment. And the carrier answer; “why should we pay for that as that is the cost of doing business and once again built into the price of the equipment”.
Our clients try to follow the IICRC guidelines and we utilize Xactimate in writing our estimates. For the line items for equipment Xactimate states;
“Includes: Equipment cost for a standard drying fan. Based on 24 hours of “run time” on the job-site. Excludes: Set-up, take down, and monitoring.
Let’s read that one more time; Excludes: Set-up, take down, and monitoring.
I find that interesting all things considered. How about for an emergency service call?
Includes: Administrative/labor costs associated with allocating resources for an emergency response during normal business hours as needed.
Excludes: All labor, travel, materials, or equipment to do the work. Add the appropriate water extraction item code for the work being done.
Let’s read that one more time; Excludes: All labor, travel, materials, or equipment to do the work. Add the appropriate water extraction item code for the work being done.
How about when they put the mortgage company on the check? The insurance explanation we must protect the insured interest. Well what about when it is an emergency dry out and the work has been completed? Some of our clients request we charge a mortgage processing charge if we have to collect from the mortgage company. Where does it say anywhere that the hoops, time and people power it takes to contact the mortgage company, have the insured and the mortgage company sign off is part of the cost of doing business? The list goes on and on.
Recently we had a client that did a 3 day dry out and Travelers was the insurance company. There were three rooms that were affected, 12 walls and 2 of the rooms were separate drying chambers. My client had 9 fans, 2 dehu’s and a negative air machine and did some HEPA Vacuuming as the insured had dust allergies. Total invoice came to about 3800.00.
The desk adjuster at Travelers argued the amount of equipment needed was excessive, labor hours were too high and part of the cost of the equipment. HEPA and Negative Air Machine was not needed as there was no mold. They paid an undisputed amount of $675.00 and stated most of my client’s costs were part of doing business.
Honestly, I don’t have a lot of clients who can stay in business doing $675.00 dry outs.
So next time the carrier says we are not paying for this or that because the cost is built into the equipment and the rest is excess. Show them what Xact says that this is an additional cost and not the cost of doing business.
Or hire General Building Consultants to fight for you.
Thanks
Gordon Cohen
General Building Consultants