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Over 30 years
of comprehensive ph: 913-362-2432 fax: 913-362-0588 Email: web@thewoodworksinc.com February 2009 |
  
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News and Information for Moving Claims Adjusters WHAT MAKES UP A “TYPICAL CLAIM” FOR AT LEAST ONE REPAIR FIRM? At The Wood Works Inc we maintain an extensive data system for our moving claim services. We analyze the data every six months to know how we are doing. What is your typical moving transit claim like? We are certainly not a unique or a typical “repair firm". We handle few local agency claims and hence mostly national account assignments. We normally handle more “corporate accounts” and more sensitive claims than we hear about from other repair firms. This year we've seen a noted increased in military relocation inspections. The unusually large or sensitive assignment was particularly true during 2008 when we handled several very large complex super sensitive claims. They are not reflected in the data since they so biased the findings. How about 110 items on a claim? or threatened legal actions? or arguments over existing appraisals? Here are some observations from our data for the last five years. We hope it prompts some discussions among adjusters and repair firms; and just possibly between such groups. We thought, during 2008, that the number of “inspection only” assignments had grown dramatically as a share of assignments. Wrong! It was probably due to the expanded complexity of military claims.
An adjuster needs an inspection on a claim, but a repair firm generally performs “inspection only” assignments to receive “inspect & repair” assignments hoping to perform repairs. This categorization is “as assigned”, not as approved. A good inspection is what controls claim losses by good claimant relations for controlling settlements and finding repair solutions when the claimant thought none were even possible. Historically the share of "inspection only" assignments have been growing into the 35% range for several years, but was down in 2007. The “inspection only” results for 2008 are clearly returning to the trend, at least in part due to more military claims that have all been inspection only assignments with very few repairs. Some repair firms perform inspections, particularly “inspection only” assignments, as “loss leaders” and others do not. Inspections are not what allow repair firms to survive to serve the industry. In 2008 only 10% of "inspection only" assignments ever were approved for repairs. That is as compared to 33-40% in prior years. The loss leader inspecton fee argument fails with a 1:10 approval ratio. We believe costs are costs and they should be assigned fairly, openly, and professionally. To argue that some repair firm does an inspection for less is to argue they are just hiding the billing or don’t know their costs.
Some major moving companies rank repair firms by the number of repairs per claim assignment. We have routinely been in the 2.6+ range, but were particularly pleased with 2007’s 3.58; a new record. We understand the industry average is about 2.0. Interestingly our rate returned to the 2.6 level in 2008. Fewer repairs mean less work for repair firms. Our view is that on every repair we saved the moving company a high-price cash settlement and an unsatisfied claimant/corporate account. We believe it reflects the breadth and depth of our wood and finish repair skills; and, our wide 3rd party network. Basically any item on a claim that is repairable is something we resolve...wood or "knot".
We find the claim’s total cost, for repairs and settlements as we know them, as a percent of claim value really interesting. We conclude that an “inspection only” claim has not particularly varied from an “inspect & repair” claim, until the last two years. It means that lately "inspection only" assignments have eventually resulted in higher costs to the moving company than an assignment to repair. Our conclusion is higher tendencies for adjusters to cash settle large claims and expensive items than in prior years; but, it shows that repairs would have been more cost effective.
It is very important to observe that our typical repair cost (25% of value) and recommended cash settlements (35% of value as recommended) average only 27% of claim value. We believe this comes in large part from the quality of our Inspection services. This reflects how much a good comprehensive repair firm can save the moving company. It has held amazingly consistent during recent years!
Moving claim inspections and resolutions, by type of resolution, have not materially basically changed over the years: by total items claimed or quantity per type of resolution. This combines both types of assignments: good times or bad, corporate moves or not, military claims or not. The typical claim is of various resolution types: · Negotiate: 1 in 4 claims has one. Because we could not get enough information from the claimant we had to leave it to the adjuster. We minimize them. · Denials: 2 in 5 claims have one. Where we recommend denials to the adjuster. Yes, we do that! · Repairs: 2.6 in typical claim. Obviously where we repair the item, including using our wide network of third-party experts. · Settlements: 3.7 in typical claim. Where a repair is not warranted or possible within a reasonable share of value, we recommend cash settlement along with the amount that it should be, that frequently is only a portion of value. · TOTAL: 7.02 per typical claim, down a full item from 2007, but still up from historical levels. The total number of items on the claim, not counting residential damages that we also perform. Every item is an item to locate in the home with the claimant, discuss, resolve value, decide a resolution, determine a repair or cash settle budget, to digital picture document, to repair, to explain, to accomplish, to get a sign-off on. Every item consumes time and has a cost to a repair firm beyond the adjustor’s view of costs. We hope this helps moving claim adjusters have a better understanding of what at least one repair firm runs into in the course of a year. If you have any questions you are encouraged to just ask with an email to mgt@thewoodworksinc.com February 2009, The Wood Works Inc of Overland Park, Kansas 66202 |
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