Concerned regarding Adjuster Fee Schedules for Citizens of FL?

May 19, 2008

 

There is an ongoing topic at CADO here where adjusters are expressing concerns regarding the Citizens Fee Schedule. I don’t normally link to their forum topics but this is an especially good discussion going on that adjusters planning to work Citizens might wish to read. It is found here:

http://www.catadjuster.org/Forums/tabid/60/forumid/28/tpage/1/view/Topic/postid/8045/Default.aspx

 While I’m not employed by Citizens or affiliated with them in anyway, I have been actively researching all information they do publish on their website for well over a year now due to my claim staffing firm who may receive requests to supply adjusters to help Citizens vendors. Here are answers that I provided in response to some things being posted regarding the fee schedule that might help others with the confusion on which fee schedule will apply this year. Should I receive any feedback that corrects any info I’ve provided based on my reading of the Citizens of FL documents, I will update this post:

I think I see what the confusion is in this topic on the  $70.00 or $700.00 fee.
 
We are dealing with 2 different RFP’s (Request for Proposal Documents) and 2 different fee schedules – one with each of them.
 
Citizens bid out the RFP in 2007 (RFP 07-0003) which the agreement form found on page 21 of the below link says is for Catastrophe Claims Agreement for the period of June 1, 2007 through 5/31/2009 so that would include this hurricane season during 2008. All of those documents can be located here on their website on RFP 07-0003 which is 2nd to the bottom on this link to include the fee schedule and the fines for violations of their service handling standards. This is the RFP that we have seen the award list for the 45 vendors which has since been increased to 46 vendors although they never published the updated list with the 46th vendor ( we wrote about that with a link to the Citizens announcement on Bradley Stinson firm  in a link in one of the following paragraphs.
 
 
They then began bidding out for daily work for Daily claims (RFP for daily claims which occur from 7/1/2008-6/30/2011 and catastrophe claims from 6/1/2009 to 6/30/2011. This is the RFP that has been revised 3 times since the beginning of 2008.(RFP 08-0001 2/08 and RFP 08-0016 the current ones issued April 08 RFP 08-0016  which replaced RFP 08-0001)
 
Here is a blog addressing the 3 revisions which included the initial RFP in 2/08 and the 2 revisions in April/May 08:
 
 
 
Here are links to the first one that got cancelled in Feb 08 AFTER the vendors wishing consideration had submitted their RFP docs:
 

***They haven’t zipped these docs yet so look for RFP 08-0001 to see the RFP and the cancellation notice (I think it was addendum 4). We wrote about this cancellation with more details here:

And a blog we wrote about the Feb 08 cancellation:

https://dimechimes.wordpress.com/2008/02/13/citizens-rfp-for-daily-independent-adjusters-cancelled-the-claims-cheese-is-on-the-move-again/

 
 
 
Here is the link to the current RFP 08-0016 which was initially posted 4/22/08 with a fee schedule  for the new dates in the 08 RFP then revised again on 4/28/08  and 5/9/08 to include revisions to the fee schedule and the Q & A document mentioned above that confirms they did intentionally put $70.00 versus $700.00 on the slab footprint only claims.
 
**Docs not yet zipped so just look for RFP 08-0016. Note they move documents when an RFP is closed to the Closed purchasing documents which you can access going to www.citizensfla.com then clicking on purchasing the click on the tab for Closed Competitive Solicitations to find the RFP when it does move.
 
This new RFP included a Q & A in Addendum 2 dated 5/9/08  where the vendors had an opportunity to present questions to Citizens which they then published the answers to on May 9, 2008. In that Q and A info they published, one of the vendors specificially asked the question if there had been an error on the published fee of 70.00 on the total losses where they just wanted a footprint taken since the schedule for 2007/2008 cat work had said 700.00. Citizens answered this question in Q5 of Addendum 2 that an error had NOT been made and 70.00 was in fact the correct fee for the daily work beginning June 2008 daily claims and the cat work beginning June 2009. While they didn’t use those dates, the Q &A applied to the new RFP questions so that would be the new time frame. Note they have not yet selected the firms for the new RFP. The list you’ve seen of 45 vendors (it is actually 46 now- see this blog if your not familiar with the 46th vendor info here:
 
 
 
 
Evans Claims, one of this years vendors, has the Face to Face requirement email from the interim Citizens Catastrophe Director posted on their website in a May 12, 2008 post here which explains there reason for requesting the face to face training and I’ve seen in uploaded as an attachment on some of the other vendors emails to their adjusters as well:
 
 
Here is a link to a blog we did on the new face to face training requirement:
 
 
What is interesting is that the Adjuster Resources Link at Citzens has not been updated as of this morning  on the new face to face training and still links to the online training although many of the vendor emails say the online training thousands did in 07 no longer counts for your certification: You might want to keep checking here for when they do finally get it updated
 
 
Here are links where you can find the current fee schedule for this season and the RFP document with the new fee schedule in Addendum A for the new RFP dates.
 
**Docs not yet zipped so look for RFP 08-0016
 
There are significant changes between the RFP for 2007/2008(cat only RFP 07-0003) and the new ones for July 2008- June 2011 for daily claims and the beginning June 2009 through May 2011 for catastrophe claims.Very interesting in the new RFP the fee schedule is based on the number of adjusters Citizens deploys not on the severity of the catastrophe like we usually see on fee schedules and they address this as well on the Q & A in the new RFP 5/9/08 published answers. I highly recommend anyone planning to work for any of the vendors be sure to read them. Some of the most significant include:
 
1 )Citizens comments in the new RFP Q & A on hold harmless agreements and who will be paying if suit is filed on a claim.  2) The other major issue I could see is their answer to the question posed by one of the vendors about what happens if Citizens runs out of funding to pay claims to the adjusting firm/adjuster fees and Citizens could not provide assurance as to what would happen to the adjuster fees.3) Anyone reading the FL papers is well aware of the controversy regarding Citizens freeze on rates which has now been extended and the concerns in the press that they are not adequately funded and capable of paying claims in the event of a major catastrophe. I’m very glad one of the vendors asked the question.4) The new and I think last year’s RFP which applies to the 2008 Cat claims requires an adjuster not work claims for any other carrier while working Citizens claims. While I can understand that for cat claims where you may have enough work to provide a satisfactory income, I do not understand that requirement for those working daily claims (see RFP 08-0016 and the 08 Q &A for this question) where an independent may not receive enough assignments to provide an income that would justify such dedication to one carrier.5) Also be sure to read the info in the RFP 08-0016 about limited assignments where the inside adjusters will settle the claims with the homeowner. Does this seem strange to anyone else that the adjusters with the least experience (they only require 1 year experience for in office) will be handling settlement negotiations with insureds vs the field adjusters where more experience is required?
 
Here is just one example in a blog I did this year on the fiasco with the 300 Million Dollar claim reserve problem identified this year which I’m sure those working Citizens claims this year will hear about since claim reserves are in the list of job duties for independents-see RFP 08-0016 for that list
 
 
 
 
Here is also a link to the blog we did when the new RFP was released in April 2008:
 
 
And a link to the blog written when they cancelled the Feb 08 RFP with more details:
 
***This blog also addresses Citizens published and  planned reduction in use of independents so there may be less work in the years ahead with Citizens for independents although it’s interesting to note they don’t disclose this information in any of the RFP’s but we found it through the Citizens Task force or Board of Governors meeting notes- the links are in the blog above
 
 
 
In my opinion, adjusters should be utmost concerned about the fines in this years RFP(07-0003 for cat  documents- some are up to $1,000 per violation for such perceived infractions as late reporting to the cat site and improper file handling. While the RFP says the adjusting firm will be fined, many of the independent contracts the past two years seem to be revised or updated to include passing fines on to adjusters though most are not specific about what those fines are so I’d be sure to have a thorough discussion with any adjusting firm you are planning to go out with on that issue. While RFP 08-0016 doesn’t go into the great detail the 07 schedule did, it does have language incorporating the Claim manual which last year I believe included the fine info so I am guessing the fines will be whatever they are in the manual but they say in the new RFP that the manual will be given out to the new vendors once they are awarded so we don’t know the answer to that question but you should get an answer to this from your vendor). I was hoping one of the vendors would have asked about that in the Q & A questions but it is not published with the Citizens answers if so..
 
While it may seem to some that these things are nothing to concern yourself with, let me assure you that is not what Chip Merlin,Attorney of the Merlin Law Group in Miami is posting on his blog here:
 
 
If you look at the Citizens Task Force on Claim Handling that is charged with oversight of the Citizens Claims, Mr Merlin in the June 07 presentation links made a presentation to them on the problems he saw with claims handling in the aftermath of the 4 in 04 and in 05. You’ll see from his new comments his frustration in the results of the task force and his indication he thinks litigation in the aftermath of any new hurricanes will be much the same as the massive litigation our industry has experienced post Katrina (emphasis here mine- go back to Citizens comments on the RFP08-0016 answers about holding them harmless even if a Citizens manager overrides an adjusting firms decision on a claim)..Look at the link to presentations I’ve posted in this reply  to his presentation to the task force in June 2007 and a link to his May 08 blog about his predictions on litigation post any new storm and his expectations about litigation and also note his interesting comment expressing disatisfaction with the work of the Citizens Task Force. If you aren’t familiar with Chip Merlin, he has offices in various locations in FL and has been proactive in litigation on claims in MS with a few offices over there as well .. I think we will see his name quite a bit should a  major storm hit FL as he has been very proactive following the claim problems and ongoing developments at Citizens.Here are a few links to some blogs you should read that are quite interesting on Citizens and his thoughts regarding repeat of litigation,etc:
 
 
 
 
 
Some folks above indicated a wish to be heard by Citizens. If you’ll note in the new RFP- the vendors were strictly prohibited from contacting ANYONE at Citizens to ask questions other than the one designated person taking the questions and answers that were then answered on 5/9/08 with the threat in the RFP that they would be removed from consideration if they contacted anyone within Citizens other than the designated person and prior to the deadline.. While I can understand the need for a contact person for questions to avoid confusion between adjusting firm managers being given different answers, I cannot imagine such restrictions in such a significant business relationship where there is a deadline given to ask questions and such limitations and threats being placed on firms they are asking to handle their business. I’m hoping the vendors were given more opportunities to ask questions at their recent Train the Trainers seminar mentioned in the 5/12/08 email from Citizens that is published on the Evans link above.
 
There are links at the Citizens Task Force which is overseen by the Dept of Insurance with contact information for the task force:
 
 
Here’s a link to a presentation on their website from an adjuster addressing the new FL umpire review that is going on. I had never thought about the fact some independents may be an independent in one state and a public adjuster in another state as this adjuster states in his presentation letter to Citizens. I’d be curious to know how independent adjusting firms would feel about using an adjuster who does both and can imagine how a carrier might feel about this:
 
**Scroll down to the one on Property Insurance Appraisal Umpire Legislation topic in the 2/26/08 presentation links and click on the link to the pdf from Catastrophe Specialist to see this pdf letter he sent in. This link also works to the pdf the Merlin group sent in last year addressing claim handling conerns in the links to the June 7, 2007 presentations on the same link above.
 
 I’m very curious why no where in the presentations by firms is there anything from independent adjusting firms- only from public adjuster groups and attorneys and others but no independent personnel. I can only guess this is because of course they cannot do anything so public for fear of losing an RFP award by upsetting the Citizens Claim Dept.  Also disappointing is the Citizens Claims Dept makes presentations to the Task Force but the latest information I can find on their meetings site is some meetings in Feb  26, 2008…..so where are they in reviewing all of the new RFP revisions and decisions that have gone on since?  Are they even aware of the continual changes Citizens is making to the RFP and requirements of Independent adjusting firms? The Board meeting notes also published on the Citizens site which provide much insight into decisions are continually behind by months so we can’t get any clues there. I wrote the Citizens webmaster about that issue several months ago and the response I got was that they cannot publish the minutes to the Board Meetings until they have been approved which he assured me would be at their next meeting which was months ago and they are still FAR behind in updating them so we can get a glimpse into the decisions going on there although their policy is to publish board meeting notes. The notes they are publishing have really changed as well from actual meeting notes to bullets of topics to be discussed and often not much else and I’m curious why that has changed.
 
I did some additional research looking to see how you would go about contacting some of the task force members directly since you can’t talk to anyone at Citizens and found email or website addresses for many of the board members .I’ll locate that research and post it here if anyone wants that. Right now you can go to the task force link above and find 2 primary contacts and ask them to forward it to all Task Force Board members if you wish. I don’t think we’ll see any improvements until our concerns are addressed to the Task Force which hasn’t happened yet or atleast there is nothing pubished on their presentations link.
 
Your best source is to talk to the vendors who are attending these meetings but I hope the above information atleast answers questions we can find the answers to from the Citizens published documents available to all of us on their website for viewing. I highly recommend adjusters stay up to date with the information being published on the Citizens website so you can consider ALL the facts directly from the horses mouth. We are not a Citizens vendor- just a concerned FL part-time resident with all of my family residing in the state  as well as a FL Independent adjuster who has been contacted by many adjusting firms as well and these constant changes give me GREAT concern about what is going to happen when my family, friends, and residents of FL experience a major catastrophe never mind the potential for problems for independent adjusters servicing their claims.

 

 

Visit our Adjusters Information Blog
http://www.dimechimes.wordpress.com
 
   
 

Update 2:50 pm 3/19/08- Citizens has added 2 new documents today to the 08-0016 RFP documents compounding the confusion:

Guess what folks? Citizens has uploaded a new Revised Addendum A dated 5/19/08 and on the $70.00 fee they show it now revised to $700.00 in spite of their Q & A answer that $70.00 was correct which they answered in their 5/9/08 Q and A. It is the last document today on the 08-0016 RFP showing revision to Addendum A revised 5/19/08. They also uploaded a new Q & A dated 5/19/08 yet the answers seem to be the same as in the 5/9/08 Q & A with the same answer to the 70 vs 700 issue saying it is 70.00. So we have two documents new today and they conflict with each other on the issue.Mr Smith- good question on the adjusting firms/adjuster issues. Somewhere in all of these 08 RFP documents, there is a comment about adjusting firms not taking adjusters from other adjusting firms. Most adjusters I know have applied to multiple vendors post all of the 07 online training criteria. So who decides who belongs to which adjusting firm? I know most folks had to list an adjusting firm when they did the online training with their codes but does that hold you to that firm? I have no idea the answers to these questions but if Citizens were smart, they’d add a clarification on this information in one of their sure to be multiple more revisions.

Also- I’d make sure everyone reads the zip documents -especially Attachment J -on RFP 08-0016 for the info I mentioned in first post on the Indemnity clause on litigation and the comments in 4.3 on “no negotiation” on fee schedules. Make sure you also note that in 10.27 on Attachment J that they are going to charge the adjusting firm 15.00 per day for an adjuster  if they work in a Citizens office so that’s about $450.00 per in office adjuster (does this apply to mgmt working in their offices too?) per month.. Before accepting an in office assignment, I’d make sure to check with the vendor to see if you are going to be charged back that fee based on the terms of your independent contract with them. Adjusters are also responsible for providing their own Xactimate(they didn’t clarify which version) so together wouldn’t you be paying well over 600 per month to work for them per month?

 

Top Blogs of Interest to New Adjusters July 2007- April 2008

April 28, 2008

 

You can search the Archives for all blogs we’ve entered since we began this blog in July 2007 but it’s very time consuming we know! In an effort to assist new adjusters entering the claims field, we are providing the links to the top read blogs on careers, fee schedules, claim salaries, adjuster safety issues, errors and omissions coverage and other blogs that would be of interest to new claims folks such as those seeking careers also as auto adjusters. Here’s a link to everything in our archives applicable to new adjusters (and experienced alike who may want some up to date information):

)
https://dimechimes.wordpress.com/2007/07/27/claim-career-information-the-pros-and-cons-of-going-staff-adjuster-versus-independent-adjuster/

https://dimechimes.wordpress.com/2007/10/13/auto-adjuster-claim-careers-an-interview-with-adjusting-firm-owner-carey-oconnor-with-csp-claims/

https://dimechimes.wordpress.com/2007/07/26/most-commonly-asked-question-is-how-much-income-can-i-make-as-an-adjuster/

https://dimechimes.wordpress.com/2007/07/26/catastrophe-adjuster-resumes-the-requirements-to-get-noticed-do-differ/

https://dimechimes.wordpress.com/2007/08/30/adjustin-to-adjusting-guest-blogger-linda-goodson-first-storm-duty-was-katrina/

https://dimechimes.wordpress.com/2007/08/24/claims-magazine-claims-salary-survey-is-upplease-participate/

https://dimechimes.wordpress.com/2007/10/19/claim-salary-survey-is-up-at-claims-magazine/

https://dimechimes.wordpress.com/2007/08/17/billingual-adjusters-in-big-demand-please-update-your-resume-if-applicable/

https://dimechimes.wordpress.com/2007/08/14/adjuster-fees-in-the-news-the-time-is-now-to-educate-the-insurance-media-and-press/

https://dimechimes.wordpress.com/2007/08/12/splish-splash-dont-go-takin-a-bath-understanding-independent-firm-contracts/

https://dimechimes.wordpress.com/2007/09/27/independent-adjuster-vs-employee/

https://dimechimes.wordpress.com/2007/09/24/insurance-adjuster-overtime-pay-issues-and-complaints-in-the-news/

https://dimechimes.wordpress.com/2007/09/14/field-adjuster-safety-concerns-be-careful-remembering-katie-froeschle-of-tampa-fl/

https://dimechimes.wordpress.com/2008/04/10/adjuster-safety-another-warning-march-08-nationwide-adjuster-shot-in-vehicle-in-tn-while-on-storm-duty/

https://dimechimes.wordpress.com/2007/09/12/commitment-part-2-standby-calls-what-should-i-do-how-are-cat-codes-determined/

https://dimechimes.wordpress.com/2007/10/24/california-insurance-commissioner-clears-the-way-for-non-cdi-emergency-adjusters-to-handle-wildfire-losses/

https://dimechimes.wordpress.com/2007/10/20/cat-tales-by-guest-bloggers-kim-and-nelson-stegall-their-first-storm-experience/

https://dimechimes.wordpress.com/2007/10/11/auto-claim-training-what-options-do-i-have/

https://dimechimes.wordpress.com/2007/11/20/major-changes-in-the-way-carriers-recruit-and-train-adjustersis-there-really-a-lack-of-available-adjusters/

https://dimechimes.wordpress.com/2007/11/14/tomorrow-is-postmark-deadline-to-get-applications-in-to-join-naca-national-assn-of-catastrophe-adjusters/

https://dimechimes.wordpress.com/2007/12/12/nfip-national-flood-2008-adjuster-certification-classes-are-now-posted/

https://dimechimes.wordpress.com/2008/01/10/do-you-really-know-what-your-errors-and-omissions-coverage-covers/

https://dimechimes.wordpress.com/2008/02/08/errors-and-omissions-coverage-guest-bloggers-dale-moore-client-relations-director-for-cplic/

https://dimechimes.wordpress.com/2008/02/05/luckwhere-preparation-meets-opportunity-published-208-in-claims-education-magazine/

https://dimechimes.wordpress.com/2008/04/23/registration-deadline-42508-for-next-40-hour-fundamentals-of-claims-online-live-class/
--

Auto Adjuster Claim Careers An interview with Carey O’Connor with CSP Claims

October 13, 2007

Special thanks to adjusting firm owner, Carey O’Connor with CSP Claims www.cspclaims.com for spending time with me Friday as I interviewed him for this blog series on careers in auto claims adjusting.

Carey’s background is similar to mine with many years on the staff claims side of the business prior to opening CSP claims with several other partners who also had claim staff management experience. I find that a very important element in the success of an independent adjusting firm since they know the “ins” and the “outs” of the business and how things work from a carrier management perspective. We are here to serve the carriers and I’m continually amazed to read some postings by some independents that don’t seem to understand that major point. I will say during my years as a staff claim manager, I worked with many wonderful outstanding independents who “got it” and did a great job for us and I’m sorry to see that many of those types of independents are gun shy about posting on some of the public forums where we could all be getting better reputations with the carriers. I’m seeking out some of these folks for blog interviews and would love to hear from many of you even if only in reply via comments to some blog entries.

Carey’s recommendations he agreed to share with our ClaimSmentor and Dimechimes Corporation readers interested in a career in auto adjusting includes the following:

1) The BEST place to get the multitude of training on the auto side( as well as the property side) is to work as a staff adjuster FIRST for a number of years to gain access to a thorough training program and a large variety of losses.

2) Carey feels the number one auto estimatic software a trainee should learn is CCC Pathways. He advises the majority of smaller and medium carriers who are using independents are either using this system currently or are moving to the system which he sees happening more frequently.

3) Carey highly recommends trainees participate in I-CAR training for learning many more aspects of collision estimating.

4)Carey advises that the top 2 catastrophe property assignments on auto claims assigned out to independent auto adjusters is for hail damage and flood damage to vehicles which can be learned in a very short period of time. Much more difficult is collision losses with many more car parts involved requiring a much more indepth training to properly estimate collision repairs to vehicles on daily claims.

5)Carey advises the majority of auto liability assignments they get from numerous carriers involves limited assignments for the property damage claims involving the repairs to a claimant’s vehicle.

6) In both cases (insured and claimant vehicles) the fee allowances by carriers runs on average about $70.00 per vehicle if inspected at a carrier’s catastrophe drive through operation or $110-$155.00 per vehicle for those handled at a body shop or storage facility or other location for non driveable cars. This rate depends on the allowance of the carrier. There is a fee split with the adjusting firm just as there is on the homeowner claims.

7) CSP Claims has access to a Paint/Dentless repair company for training auto adjusters and a new facility for property training classes and hopes to be offering the auto claim training classes in the not too distant future so you should check back with them after the first of the year if you are looking for a reputable source for your auto training classes.

(8) Carey also indicated the biggest challenge new auto adjusters face is dealing with the repair vs replacement parts issue with body shops and repair facilities similar to what property adjusters face in the home estimating side of things. To comfortably and professionally deal with these issues, Carey feels it is of utmost importance that a good auto adjuster stay up to date on current repair standards by continually taking advantage of the courses available to auto repair technicians to stay current and that you obtain your I-CAR Certifications.

(9) Similiar to a homeowner adjuster having an advantage if they have a background in construction, Carey thinks it is very valuable for auto adjusters to have previous experience as auto estimators or technicians involved at auto repair facilities so they can better be in a position to discuss estimate reconciliation issues with repair facilities. Better yet is to have prior experience as an auto staff adjuster with solid experience not only in repair procedures but claims experience and a significant understanding of the auto policies.

10) Carey felt from an assignment standpoint, the carriers are much more willing to assign auto claims out to independent adjusters due to the lower fees involved (vs homeowner fee schedules) and their firm has been successful in bringing in new carriers for assignments on the auto side while things from the homeowner side have been much slower for everyone in the independent industry. He agrees with our assessment that the majority of carriers have vastly increased the number of staff catastrophe adjusters leaving much less work on the independent side without major storms.

We thank Carey for his time sharing information with us for this blog to assist you in making your decisions regarding auto claim adjuster careers. We hope you’ll take a minute to visit their website at www.cspclaims.com

Here is also a link to information about I-CAR certifications mentioned above as well as to CCC Pathways with Paint/Dentless repair software that Carey mentioned.

We’ll address other Auto adjusting issues later this coming week as well as provide information on other auto estimatic software often requested such as Mitchell.


Adjuster Fees in the news- The time is now to educate the public and Insurance media and press

August 14, 2007

We talked about adjuster income a week or so ago here in this blog due  to the frequently asked question by new adjusters about income. I commented in that blog about comments often made on forums that we shouldn’t discuss it in public as it’s not appropriate. Well, I hate to be the bearer of the news but adjuster income is regularly discussed by the news media and it’s time we speak up and set the record straight so the media understands the reality of independent  and staff adjuster income and the many types of payment methods and schedules that exist.

Sam Friedman, Editor/National Underwriting, runs  a blog I particularly enjoy following. Sam invited Bob Hunter of Consumer Federation of America to address the wind/water issues and the allegations of damages being moved to NFIP here in this article on “Hunter  blasts Insurer Conflicts on Flood “. Hunter was invited as he is a past federal administrator of the program. His comments indicate the financial incentive is to move the claim to flood in these comments from the article:

“Worse, the insurer gets fees for settling the flood insurance claim that go up as the size of the payout goes up. The temptation for insurers to determine greater flood damage than is justified—and less wind damage—is great. ”

Apparently, Mr Hunter isn’t familiar with the September 21, 2005  FEMA directive on NFIP claim handling expediting procedures put out to  WYO(write your own)carriers which instead limited fees under the 2005 to flat fees if 2 of the 3 claim handling procedures were used by carriers. Here is a copy of that directive. See page 2 for those fees. I’d imagine you could poll any experienced adjuster who could verify the carrier wind fee schedules paid more to adjust serious losses. A bit off topic but it might also interest you to read the Single Adjuster program by FEMA for WYO companies dated in 2005 just prior to Katrina since Mr Hunter advocates for seperate adjusters on the wind and flood program. In addition, staff adjusters that work directly for a carrier are not paid on fee schedules but are normally salaried employees earning a base salary with possibly a daily additional small flat rate per day out on the road plus per diem to cover expenses and meals while traveling. Staff adjuster hotels are located and paid for by the carrier. They do not perform under fee schedules used to compensate independent adjusters brought in to help with the burden of a large influx of claims during major catastrophes. Let me be the first to apologize to the well respected Mr Hunter if I have misinterpreted his comments on incentives to move the damages to flood.

Rebecca Mowbray of the Times-Picayne also commented on the fees in this article in June 2007. I’ve read many other news articles around Florida misinforming or providing incomplete information to  the public on the way adjusters are paid. These are just a few of the examples out there.

While it’s difficult to post carrier wind fee schedules for independent adjusting firms, we’ll use this published schedule  found on the web  by the NC  Joint Underwriting  Association for comparison. This is a typical type of gross damage fee billing schedule where the fee bill is based on the amount of damages which is what Mr Hunter apparently was referring to. This type of schedule is commonly used on losses but the figures on the gross sliding scale differ greatly from carrier to carrier. During 05, I reviewed many schedules and fees for the same amount of gross loss on a major stuctural loss varied from $1,700 to $3,500 depending on carrier for the same amount of damage. Factors included differences in residential schedules versus commercial fee schedules and other issues.

There are component based fee billing schedules that rather than pay based on a gross fee schedule, the carrier will pay based on the item inspected until meeting a dollar threshold such as $15,000 in damage then the schedule moves to a percentage of the loss such as 2-3%. This would include a fee allowance for inspecting the roof such as $150.00, another allowance for inspecting the interior, another for handling the contents,etc. I don’t have one I can find on the web but this is a common practice with some of the large carriers and adjusting firms.

There are daily rate schedules often used for adjusters such as inside adjusters, reinspectors, claim managers and adjusters remaining to handle reopens on files which occurs frequently on claims as insureds get in higher estimates in from contractors due to market price increases or supplemental damage to roofs and interior leaks as new rain storms happen prior to completing repairs. Here is an example of daily fee rates on page 8 in this  publicly posted Citizens FL RFP manual for adjusting firms servicing their claims. Note also this includes a gross fee schedule on page 7 and time and expense billing information found on page 8.

Don’t overlook other limitations and additions to these fee schedules. You can see an example on Citizens schedule above which are common with carrier fee schedules such as the limit on this one to hold the reinspection allowances (good luck finding adjusters to handle reinspections for new damage to $50.00 and only if it’s new damage- they apparently aren’t thinking ahead to the fact an adjuster staying for clean up handling reopens for other adjusters who have left will not reinspect a claim for free when it’s a case the original adjuster missed damage in their scope….that’s why you move adjusters staying behind to handle reopens to a daily rate!). There are allowances such as shown on this schedule for steep/two story losses due to the extra training and equipment needed for rope and harness qualified adjusters.

Time and Expense billing is another fee schedule option used by some adjusting firms to handle fees. You will often find this type of fee arrangement on large commercial losses, daily claims, and liability losses. Here is an example from an adjusting firm publishing theirs on their website. Normal ranges seem to run between $65.00- $125.00 per hour with other allowances for expenses such as mileage, photos,etc. while the one above for Citizens allows $58.00 per hour. We ran into this in 05 with the state of LA wanting to pay only $50.00 per hour on some large commercial claims ( I’m not sure how that story ended).

Should insurance news reporters come across these type of published fee schedules they don’t seem to have any idea of how those published figures are then distributed to adjusters so let’s discuss some of the fee schedule deductions for adjusters.

All fee schedules are not handled the same. Some carrier fee schedules are the same for daily and cat claims. Some carrier fee schedules have different rates depending on the strength of the storm such as a Category 1 or 2 being X schedule while a Category 3 or 4 brings a higher fee schedule. Supply and demand of catastrophe independent adjusters plays a part in the reason for these different allowances by severity of the storm. Carriers also differ on full versus partial assignments further limiting an adjusters income when the carrier handles the contents and additional living expense and other claim components that independent adjusters used to handle for them. Carriers and even adjusting firms are in greater numbers using preferred contractors or unlicensed estimators to scope the damage at much lower adjusting fee allowances for scopers with their staff adjusters settling the claims although the staff adjuster has never viewed the damage or personally met in the field with the insured.

First there is a fee split. The adjusting firms typically place the fee schedule split in their contracts with adjusters. Typical fee splits are 60% to the adjuster and 40% to the adjusting firm. Daily claim (non catastrophe losses) may be less to the tune of 50/50 splits. Some firms do reward the more senior adjusters by paying a larger fee split such as a 70/30 split to retain a more experienced staff. Last year, newer adjusters advised  many of the firms were offering them 40% of the fee schedule due to the increased need for trainers, helpers, and additional management needed to supervise less experienced adjusters.

In addition to deducting the adjusting firms percent of the fee split with the adjuster on the damage, firms vary on what miscellaneous expenses they also take a percentage of on photos, mileage, gas allowances and the like. Adjusters need to be sure this is spelled out in their contracts. This can make a remarkable difference in an adjuster’s gross income.

Adjuster expenses are much more than the public can imagine. Here is a great outline on expenses an adjuster incurs annually to work on the road as a catastrophe adjuster found on a catastrophe training firm’s website. You have to remember these dedicated adjusters are seeking out of town housing facilities under the worst possible of conditions when insureds are also seeking temporary housing when their homes are damaged. While carriers pick up the tab for housing for their staff adjusters, independent adjusters must pick up their own tab. I have personally driven adjusters around for days after Ivan seeking any possible location to house. During 04, I actually slept in our small cat office on a lawn chair for six weeks joining a local gym nearby to go in and shower each morning before the support staff came in for the day. We do what we have to to handle insureds claims- stories abound on just such deplorable living situations for independents trying to find housing the first few weeks of storm while still trying to meet quotas carriers set and deadlines the insurance department sets for carriers. There are few exceptions when housing may be paid for an independent manager or as the Citizens schedule shows per diem allowances may be made to Q & A reinspectors,etc. but the norm is for an independent to pay their own housing running into thousands each month. The expense problem is compounded by the fact independent adjusters go 30-60-90 days or longer before seeing their first dime due to the delays having closed files reviewed and approved and the lag time from carrier payment to adjusting firm who then passes the split fee payment to the adjuster.

Gas expenses are  also becoming a major issue for field adjusters with gas in the $3.00 range even prior to a major storm hitting. Here’s the headline from an AM Best special report A.M. Best Special Report: U.S. Hurricane Catastrophe Review — One Blow Away From $10 Gas in May 2007 – here’s a quote from it:

“A Category 5 storm moving on Houston through the northern Gulf would dwarf energy industry disruptions from Katrina and Rita. Forty percent of U.S. refinery production could be shut, as well as nearly all offshore production facilities. In the short term, a spike in gasoline prices proportionate to that seen as Katrina targeted the Gulf and made landfall would take the national average for all grades within striking range of $5 a gallon. In a protracted disruption to supplies, $6 a gallon or more would not be out of the question.”

Here is also another article from CBS4 News indicating that FL now requires generators at the gas stations which may further drive up gasoline costs.( Adjusters should keep this link as there is a link to the stations that will have generators should you have to go there on storm duty).

This article found on the Fl Dept of Financial Services site reminds us of other problems adjusters faced with fee schedules in 04 with the firms who did not share the carrier schedules with the adjusters who were underpaid based on the fee split type of billing. Luckily, the RFP’s  for this carrier are now published and adjusters should not experience that issue this year.

We need to do our part in helping educate the press so the real facts and issues regarding adjuster income is known. The time to remain silent is over. I’ll refer everyone once again to the reality of adjuster’s income in this Claims Magazine article here. The title Overworked, Underpaid, and Under Appreciated accurately describes the real world of adjuster workload and payments. I hope you’ll take the time to look this over. Share it with a reporter when you see articles misinforming the public to help educate everyone on the realities. We are getting bad press and need to work to enhance understanding of our jobs in the media.


How much income can I make as an adjuster?

July 26, 2007

  Web Tag: Insurance Adjuster Pay

We often receive the question from new adjusters about the amount of income a staff adjuster or an independent adjuster or a catastrophe adjuster can make. Many forums say this topic is taboo to speak about it on public forums.

Here are many articles found on public websites for your informational purposes for those of you exploring careers in this profession.

I’ll be posting in this blog later about pros and cons of staff adjusting versus being an independent adjuster. I continue to be amazed teaching online classes on ClaimSmentor how many adjusters have misconceptions about the freedom associated with being an independent because they really have no experience yet with the expectations of carriers for independent adjusters handling their claims….so check back often for updates on many topics!

This first article is by National Underwriter Claims Magazine now managing Editor, Eric Gilkey “Overwork/Underpaid”:

http://www.claimsmag.com/cms/Claims/Monthly%20Issues/Issues/2006/10/Features/…

Here is also the latest Bureau of Labor statistics report on Adjuster pay:http://www.bls.gov/oco/pdf/ocos125.pdf

Here is one more salary link for you:

http://www.umsl.edu/services/govdocs/ooh20022003/ocos125.htm

Here you will find a link to an interesting formula used by an adjusting firm for figuring independent pay! Let us know how accurate you think this could be!

http://www.imsclaims.com/compensation.htm

**************

**Update 8/14/07- Here’s another site with adjuster income projections:

http://adjusterstraining.com/library/IncomeProjections.pdf

Make sure you also review our 8/14/07 blog on Adjuster fees in the News for deductions from this gross income type of a listing.

*********** 

It is very hard to pinpoint an “average” salary or compensation for an independent adjuster. There are many many variables such as the number of files assigned, the tight zoning of assignments in a territory or much travel involved between appointments, the fee schedules of the carriers and the fee split with the adjusting firm. Also, variables exist as to which expense items independent adjusting firms take a fee split on such as mileage, photos, tolls, and other items from the gross fee schedule billings. The net income to an  independent adjuster also varies greatly based on their temporary housing expenses at a cat site, gas expenses depending on travel from home and then site to site,etc..so there is no cut and dry answer but hopefully these well researched articles may give you some indication. Be leary of the ads and rumors you hear about those earning high dollars. While there certainly are those who do earn those figures based on years of expertise, there is no guarantee of such income. All independents can vouch for that after the slow 2006 storm season!