Desk Jockey
Member
True or not it gives the industry a black eye.
http://www.9news.com/news/article.aspx? ... &catid=188
http://www.9news.com/news/article.aspx? ... &catid=188
Denver based DRI Indicted 60-counts
- Thread starter Desk Jockey
- Start date
steve g
Member
for the most part I don't see why this should even be something that is prosecuted, I have a big problem with the part about the company jacking with the subs on getting paid and wanting them to lower the price they had all agreed upon if they wanted to be paid in a timely manner that is bullshit if you ask me, likely the feds feel there is a lot more wrongdoing that can't be proved so this is what they felt would stick
I never understood the whole thing about showing the insurance sub bids, I think this practice is bullshit, what the hell difference does it make what the sub is charging or what the profit margin is for the repair company. this is an attempt for the insurance company to control profit margins which I have a big problem with. I think disaster companies should refuse to show sub bids and just charge what they need to, this is the whole song and dance that is played by having to kiss the insurance butts on vendor programs, I can also guarantee this company isn't the only one that monkey's with sub bids to satisfy insurance people, I would dare say at least half of the repair companies who are on vendor programs have manipulated sub bids before, personally I don't see a problem with it
I never understood the whole thing about showing the insurance sub bids, I think this practice is bullshit, what the hell difference does it make what the sub is charging or what the profit margin is for the repair company. this is an attempt for the insurance company to control profit margins which I have a big problem with. I think disaster companies should refuse to show sub bids and just charge what they need to, this is the whole song and dance that is played by having to kiss the insurance butts on vendor programs, I can also guarantee this company isn't the only one that monkey's with sub bids to satisfy insurance people, I would dare say at least half of the repair companies who are on vendor programs have manipulated sub bids before, personally I don't see a problem with it
Desk Jockey
Member
I think we are due a legitimate mark up, for the hassle involved when acting as the general but they are accused of having two bills.
One they paid the sub for and the other they asked the sub to inflate the charges by as much as 30%, that one they turned in the insurance company and then they marked it up another 20%. 50% markup!
I think you should negotiate with your subs to get the best rates, and markup accordingly. But asking them to inflate the bill? Sounds like fraud to me???
:shock:
One they paid the sub for and the other they asked the sub to inflate the charges by as much as 30%, that one they turned in the insurance company and then they marked it up another 20%. 50% markup!
I think you should negotiate with your subs to get the best rates, and markup accordingly. But asking them to inflate the bill? Sounds like fraud to me???
:shock:
steve g
Member
chavez you are trying to dictate profit margin, this should be done by the repair company. personally I don't think 50% profit margin is too high, I normally make at least that on the small paint, new base and drywall stuff that I take on that I sub out, actually I think 50% is a good number. here is what happens and you guys might not deal with this so much if you are doing mostly mitigation and not on vendor programs, I sometimes work for companies that ARE vendors for insurance companies as a sub contractor. I hear the whole sub bill complaint deal all the time. here is a scenerio, you gotta go in put on a roof and do some major work to a home, the bonehead insurance adjuster says we can't pay that much you are charging too much for the roof. so the vendor can't say dude thats what we are charging deal with it, if they wanna stay a vendor very long, soooooo the vendor says look my sub is charging this we have to have this amount. the adjuster says ok let me see the sub's bill. which IMO is none of the insurance companies business. so which brings up another topic that might not fit in this thread, and that is profit margin, IMO a full line restoration can't make it on 20% margin that they are now locked into by turning in a subs bill, here is why often these jobs take over 2 mos for the insurance adjuster to get off his ass and pay the bill, then when they do most of the time there is the customers name, the restoration companies name and anywhere from one to 3 mortgage companies name on the check, so imagine a scenario I describe, you have 80 k in a 100k job, you wait 60 days for payment to be issued, then you wait another 45 to 60 days to get all 3 mortgage companies to sign off on the check, meanwhile a couple things got broken, some things where left out of the bid by accident, you have 80k in materials and sub bills you are floating. now you tell me how you are gonna make it with only a 20k profit?? what happens is its too little too late by the time the restoration company gets paid, because they have many other projects they are working and facing similar challenges, they are robbing peter to pay paul just to pay the subs and keep them from mutanty.
this whole situation is a product of insurance company politics they created this without any doubt, one of the companies that was a big time vendor for reconstruction I used to sub for, was faced with all these problems they ended up going out of business because of it. keep in mind these people are likely just trying to keep their heads above water and eeek out a living, in a climate of nearly impossible challenges, this is their lively hood, its important to see this from the restoration companies side here and understand the challenges they face. renegging on what they agreed to pay the subs is wrong, however turning in inflated sub bills is not IMO and should not be prosecuted, for the reasons above
this whole situation is a product of insurance company politics they created this without any doubt, one of the companies that was a big time vendor for reconstruction I used to sub for, was faced with all these problems they ended up going out of business because of it. keep in mind these people are likely just trying to keep their heads above water and eeek out a living, in a climate of nearly impossible challenges, this is their lively hood, its important to see this from the restoration companies side here and understand the challenges they face. renegging on what they agreed to pay the subs is wrong, however turning in inflated sub bills is not IMO and should not be prosecuted, for the reasons above
Bob Foster
Member
- Joined
- Oct 8, 2006
- Messages
- 8,870
I am not begrudging lots of profit but for an industry that supposed to have competition, how did the adjusters ignore the other substantially lower bids lower bids over that period of time for comparable work?
Unless there were a few adjusters complicit in the scheme...
Unless there were a few adjusters complicit in the scheme...
Chris Muetterties
Member
- Joined
- Oct 8, 2006
- Messages
- 1,652
Was this the place that Dustin Murrey went to work for a few years back ?
Desk Jockey
Member
Steve
You're right we only do the mitigation phase, mostly for the reasons you listed.
The local reconstruction companies are always complaining about the vendor programs yet they all want to be on them????
I'm not sure of what's a reasonable mark up for that work, but I would agree 20% is not always worth it.
Have you read this from the Restoration Forum? The 10& 10 Lie?
http://www.therestorationforum.com/phpB ... 087a935556
Them wanting to see the bills, it's always been that way for us with dry cleaning, electronics checks and any other subs we use.
I have no problem with wanting or needing the 50% margin, but it's the deceit, that I would bother me. Asking your subs to make up inflated bills is over board to me! (if they did what they are accused of)
That is a problem with Vendor programs. If you let them control you, they DO NOT have your best interest in mind.
Personally if they are not allowing me enough to make a reasonable profit then I don't think I'd want to do the job.
You're right we only do the mitigation phase, mostly for the reasons you listed.
The local reconstruction companies are always complaining about the vendor programs yet they all want to be on them????
I'm not sure of what's a reasonable mark up for that work, but I would agree 20% is not always worth it.
Have you read this from the Restoration Forum? The 10& 10 Lie?
http://www.therestorationforum.com/phpB ... 087a935556
Them wanting to see the bills, it's always been that way for us with dry cleaning, electronics checks and any other subs we use.
I have no problem with wanting or needing the 50% margin, but it's the deceit, that I would bother me. Asking your subs to make up inflated bills is over board to me! (if they did what they are accused of)
That is a problem with Vendor programs. If you let them control you, they DO NOT have your best interest in mind.
Personally if they are not allowing me enough to make a reasonable profit then I don't think I'd want to do the job.
