Are Computerized Estimates by Pilot Catastrophe Adjusters Low Because of a Special Database?
Some Mondays are more interesting than others. When I go to conferences with adjusters, I make a point to ask about "in the street" information on insurers I am litigating against. The information and leads to witnesses or evidence are often extremely valuable to my clients. Adjusters know when the orders from claims management are wrong and aimed at paying less than what is fairly owed. Most want to disclose facts about insurers that wrongly demand underpayment.
A current problem regarding the disclosure of such activities is that catastrophe firms and insurers usually make the individual catastrophe adjusters sign confidentiality and non-disclosure agreements preventing whistle blowing from ever taking place. These agreements should be illegal. Can you imagine any reason society should tolerate contracts that prevent employees from disclosing improper claims conduct? What if the mafia could enforce such agreements? Yet, that is largely why Renfroe sued the Rigsby sisters--to shut them up about State Farm’s multiple engineering reports indicating excluded flood rather than covered wind caused damage to State Farm's customers.
Last night, a former Liberty Mutual adjuster, who is now a public adjuster, told me that while he was reviewing estimates from Pilot Catastrophe Services regarding damage to structures in Texas following Hurricane Ike, he noticed the amounts always seemed low. He took a Pilot adjuster to estimate a structure using the same Means software and the same measurements. He said the estimates were made on computers next to each other. He used the Means database and the other adjuster used the Pilot Means database provided by Pilot. The Pilot estimates were 30 percent lower than the unchanged Means database. I do not know why, but I will call Rodney Pilot to see if he knows. I will report on what I find. Maybe there is a good reason for this and the experienced, insurance industry trained public adjuster is mistaken.
Until then, the lesson policyholders should learn from this:
Get your own estimates and professional help anytime you have a significant loss.
Naturally, I had to crosspost this at SLABBED and add some comments about pricing databases. Isn't Pilot one of the firms State Farm uses? Seems like it was one of four mentioned recently in something I read. Keep us posted.
Did you find anything out about the different amounts that they spit out?
One of the reasons for the difference is how each database treats Overhead & Profit. RS Means includes it automatically in the unit cost. Xactimate adds it at the end.
As a user of both RS Means and Xactimate, I have found the Xactimate pricing is closer to reality than RS Means. Whenever we find a large discrepancy between the two, we obtain local pricing. It normally supports the price found in Xactimate.
Now some vendors have special databases. Who knows why or what criteria they use for their databases?
PILOT JUST DOES WHATEVER ALLSTATE ADVISES THEM TO DO. ITS THAT SIMPLE.