Contractors often tell me and other Merlin Law Group attorneys of the crazy excuses and refusals insurance adjusters give to avoid paying for required construction materials, processes, and practices which constitute quality workmanship. Cheap and non-quality construction is easy to do and often overlooked by policyholders completely unfamiliar with the detailed specifications demanded by manufacturers of materials, building codes and OSHA requirements which must be followed for legal and quality construction to take place. Insurance company claims mangers know that doing construction right is a lot more expensive and demanding than paying for cheap construction.

An excellent article, Quality Construction Management, was published by International Risk Management Institute n/k/a IRMI and concludes:

A contractor must have a robust quality management program as it is critical to the overall success of a construction project. An effective program creates a process for clarifying standards and requirements, established means and methods for managing the process, defines responsibilities and accountabilities, and adds another avenue to more effectively manage the supply chain, while it reduces misunderstanding and potential conflict. It effectively facilitates and manages the collection of data, identifies performance discrepancies and nonconforming work, and substantially increases efficiency by reducing defects and punch list work, which aids in. improving the working relationship with the design team and the project owner. It systematically manages quality and enhances the contractor’s project delivery, increases productivity, eliminates or reduces waste, and ultimately improves profitability.

It does not take a rocket scientist to figure out that quality contractors performing the type of work discussed in the IRMI article cannot possibly stay in business if insurance companies demand “cheap” pricing. Contractors and policyholders reading this post should also read, Insurance Company Adjuster Training Scripts and Role Paying, on how insurance companies teach their adjusters with scripts to avoid paying contractor demanded pricing as well as overhead and profit costs.

Many insurance claims departments have a culture that will only pay for “okay” construction. AT&T’s current advertising campaign about “okay” services and products makes the point. Would you want just an “okay” surgeon or tattoo artist? Would you want your sushi to be just “okay?” Would you search for and buy your grand-baby the “cheapest but acceptable” car seat?

Yet, when it comes to insurance restoration construction, I have never heard an insurance company property insurance adjuster demanding that the contractors providing their pricing, or the pricing found in Xactimate, to be only from quality contractors with the types of processes and culture I quoted from in the IRMI article. They always go cheaper and for “okay” construction. They wrongfully allow the “cheap” contractors to provide data for pricing used by Xactimate.

Quality restoration contractors fighting these adjustment practices are heroes for all of us. Demanding fair pricing which allows for quality and standing up to the insurance industry adjusters is admirable. It is far easier to accept lower pricing and provide cheap and inferior workmanship.

A post about how State Farm tried to influence and obtain “okay” construction and pricing is found in, Membership in Professional Organizations Helps a Small Public Adjusting Firm Achieve a Big Result. Clay Morrison was a State Farm preferred construction vendor. The State Farm claims manger demanded that Morrison provide unethical pricing which would only result in cheap construction. Rather than acquiesce and keep the State Farm business, Clay Morrison rose to the occasion at his moment of truth and refused. He lost State Farm’s business, but he was a champion for all policyholders, his family and himself.

Similar battles are being fought every day by those in the insurance restoration construction trade. Those contractors that follow the rules and refuse to become just “okay” should be congratulated.

Thought For The Day

A dream doesn’t become reality through magic; it takes sweat, determination and hard work.
—Colin Powell