RIA’s AGA Committee Continues to Empower RIA members
Restorers at one time or another have experienced industry partners overstepping their roles and attempting to influence the way restorers do their jobs. RIA’s Advocacy and Government Affairs Committee, or AGA, continues to expand its efforts to empower RIA members by providing peer reviewed industry position statements to address these challenging situations.
Two new pricing position statements on the following challenges have been released:
Pricing Position Statement #3 - Adjusters Dictating Restoration Charges
Pricing Position Statement #4 - Denial of Charges for the "Cost of Doing Business"
The RIA connected with Restoration Advocate Ed Cross, to learn more about the process of developing these position statements, and why pricing position statements #3 and #4 are so important:
How does the AGA determine what issues to focus on in its position statements in general?
Ed Cross: The RIA has its finger on the pulse of the restoration industry, like never before in its 76-year history. It actively solicits member feedback through surveys, live polls at conventions, social media, and from the dozens of volunteers on the committees and task forces that support the AGA. The volunteers are well-connected in the industry and are abreast of the current trends, including the challenges faced by restorers. We assign degrees of urgency to issues to maintain a sharp focus on issues that have the biggest impact on the largest number of members.
Why did the AGA decide to develop Pricing Position Statement #3, “Adjusters Dictating Restoration Charges?”
Ed Cross: Pricing Position Statement #3 asserts that adjusters should not tell restorers how to bill on non-program jobs. In other words, a restorer is not required to comply with adjuster requests to change rates, delete billable items, or conform to standardized pricing unless the restorer is a party to a binding contract that creates a duty for the restorer to conform to certain billing guidelines. All too often we see adjusters attempting to dictate pricing for work that is not performed under a managed repair network or TPA. They say, “change your rate to x” or “remove the charge for y because we don’t pay for that.” They cannot do that, and if the restorer has an assignment of insurance rights, the restorer can act directly against the carrier to enforce the right to policy benefits and fair handling of the claim.
Why did the AGA decide to develop Pricing Position Statement #4, “Denial of Charges for the ‘Cost of Doing Business’”?
Ed Cross: Pricing Position Statement #4 dispels the myth that a carrier can refuse to pay restoration charges on grounds that the charges represent “the cost of doing business,” unless the project was performed under a program that requires the restorer to comply with estimating guidelines. If the “cost of doing business” was a valid reason to deny a charge, then carriers would never owe anything because everything––including air movers and drywall––are a cost of doing business. Denials and adjustments can only be made when they are part of an organized and methodical system and follow the written terms of the contract of insurance. This Statement is designed to discourage adjusters from making up exclusions.
How can RIA members use Pricing Position Statements to empower themselves in a difficult situation?
Ed Cross: When an adjuster attempts to dictate pricing or deny charges on the grounds they are the cost of doing business, the restorer can respond with some or all of a Position Statement. Each one contains powerful, fact-based arguments that can be incorporated into telephone conversations and emails. These positions have been heavily vetted, analyzed, and peer-reviewed by veterans from both the restoration and the insurance sides of the equation. Like all the RIA Position Statements, these new statements represent consensus positions.
For non-program jobs, restorers should seriously consider refusing to change an invoice and instead demand payment of undisputed sums. If the adjuster believes that a lesser amount is owed, the adjuster should pay that amount. They do not need invoices changed––they want them changed, to protect themselves. If the restorer refuses to change an invoice, the insurance company still must pay for covered damage.
Restorers should not engage in the practice of adjusting claims. They should be familiar with the adjusting laws in their state, so they do not cross any lines. In general, restorers should refrain from representing policyholders in the settlement of a claim. Restorers can and should obtain copies of the insurance policy for each significant loss but should refrain from communicating with insurers about coverage or exclusions. That can only be done by a licensed adjuster or attorney.
As the Restoration Advocate, what do you hope will happen in the industry because of these two new Pricing Position Statements?
Ed Cross: The main point is that everyone needs to stay in their respective lanes. Adjusters should not control restorers’ pricing on non-program jobs or invent fake exclusions. Restorers should not adjust claims. There will be differences of opinion, but if people follow the rules, there will be minimal conflict and minimal legal expenses. The AGA tools allow restorers to avoid attorneys’ fees.
I hope adjusters will show more respect to contractors and their billing models. Senior managers at insurance companies understand there is no policy exclusion for the “cost of doing business” and do not realize their adjusters are refusing claims on that basis. Adjusters need to remove the meaningless phrase “cost of doing business” from their vocabulary which subjects them to liability and wreaks havoc on the orderly processing of a claim, to the detriment of the policyholder.
Is there anything you would like to add?
Ed Cross: I urge everyone to attend the RIA focus groups!
October 4th, 9am - 4pm in East Dundee, IL
November 18th, 8:30am - 12pm in Bel Air, MD
December 9, 8:30am - 12:00pm in Miami, FL
At the annual convention in Orlando April 24-26, 2023, RIA members and non-members alike have a wonderful opportunity to learn innovative strategies to confront difficult predicaments facing restorers today.
If you are not already an RIA member, the time is now. Our moment is real! Join the movement at www.restorationindustry.org/member-benefits.