Trick or Treat?
Over many years loss adjusting firms have been using many and varied methods of reducing the payout under property damage claims. Some of these methods are in breach of industry norms and even legislative requirements. However when dealing with unsuspecting homeowners they can appear authoritive and professional and not easy to spot or argue against ommissions that are unfair to the consumer.
For example, builders routinely charge “Preliminaries” on every job. This is a small percentage of the overall cost, to factor in the overhead of providing tools and equipment, transport, small plant hire etc., all of which are consumables needed to perform each job, the cost of which has to be borne by the contractor and which must be charged out over all their jobs. Some loss adjusters try to avoid paying pre-lims.
When claims are submitted to loss adjusters, the supporting documents are often ignored and the policyholder is presented with a professionally prepared document or spreadsheet detailing what the loss adjuster believes is the breakdown and cost of the elements that make up the reinstatement. They often understate the scope of work and use minimum “agreed rates”, even if there is no such terms detailed in the policy of insurance.
Trick or Treat?
To the unsuspecting claimant they find it difficult to argue with loss adjusters other than to say “but my builder’s quote was higher than that” or “I can’t get all the work done for that amount”. They will be met with a response along the lines of “well your builder is charging too much” or “we can get a contractor to do it for that” or “they are the maximum rates that we are allowed to offer”. None of which gets the problem solved, but generally softens up the claimant into believing they will be lucky to get any more, and then hey presto they are offered a small bit more to settle, not realising that they have been taken in by a slick negotiating tactic. This is not treating customers fairly. We would argue that it is unethical and immoral.
In accordanace with the Safety, Health and Welfare at Work legislation, all works that require more than two contractors requires the client (property owner) to appoint a PSDP (Project Supervisor Design Phase) to be responsible for the safe design of the works and look at particular risks and document the work to be carried out and how to eliminate or reduce the risks. This applies to all projects no matter how small, e.g. a water leak requiring plumbing repair, plastering, flooring/tiling and redecoration work. They must also appoint a PSCS (Project Supervisor Construction Stage). This is a competent person who is adequately resourced to oversee the project.
In cases where the project is a large one i.e. taking over 30 days or 500 man hours to complete, they must complete AF1 and AF2 forms and submit to the HSA (Health and Safety Authority) in advance of the work proceeding.
Even though this is a legislative requirement, most loss adjusters do not allow the cost of such appointment, even though property damage policies cover professional fees necessarily incurred in the reinstatement of the damage.
Some will argue that the cost of these items are included in the rates being allowed. This is complete nonesense, especially when the rates being offered in most cases have not increased in about 5 years despite increased materials and labour costs in the market. This is particularly so since the demand is now outstripping the available supply due to the flight of construction workers during the recession. Some adjusters will argue that the appointment of PSDP and PSCS doesn’t apply to small jobs. This is not what the legislation or the HSA guidelines say.
Don’t be tricked into settling for less.