The hits just keep on comin"

Well after a week of 5 Mondays, Saturday rolls around. I go out and do the usual never ending talking to homeowners trying to sell more work. Then I stopped at the job in progress and pound down a few square to take out some frustrations. Nothing like swinging a hammer to get the mind clear. All in all a nice day. Then I get home and make the mistake of opening the mail. Got the results and bill for my GL insurance audit. Owe another $1900. for last year. GL is based on receivables and I under estimated what last years sales would be. Well I bet I am not the only one. How can you estimate income when the price of shingles rises every freaking month. I realize now that I would have been smart to adjust my estimate during the course of the year but who does that? So what it amounts to is a windfall profit for the insurance company due to the rising price of oil. There is no more exposure or risk to them but they rake in a whole bunch of money for nothing!!!!!!!!!!! Just venting. Anyone else had this problem?>>>

I agree Vaa. This brings us you too close to writing our an itemized estimate, and in effect, makes the homeowner the GC. Unless there is a high level of trust involved. When they see your #'s they can greedy fast. Unless as Ed said, for some jobs only, where the trust is there>>>

I've thought about offering that as an option for several years now, just for the exact reasons you are stating, but just never pulled the trigger on it.

Remember though, although this is just a Minor consideration, until something does happen, the materials would not be covered under your General Liability policy if done that way.

Ed>>>

Twil, It really might be a good idea. It would keep my gross receipts way down and therefore my GL would be less. If I cut 1/3 off of my bottom line the GL should follow suit. That could actually save me about $5,000!! Nothing to dismiss lightly. I am going to look into this.>>>

GAK, I know a guy who does that. $70 sq. R & R Labor on a 12/12 inclduing the dump.

Do you want to go there? One price, turnkey if you ask me, is still the way to go.>>>

Ed, It seems to me that the only way to do that would be to have the homeowner pay the material bill himself and keep it off of the books entirely. Might be a good idea. Does anyone do this? Seems like something that one would do if they were working for cash.>>>

How about invoicing separately for the materials and keep those funds in a different account, just to pay off the suppliers with?

Or, do your estimates with as a labor only, with materials payment due upon delivery?

I have considered that, mainly so that I could decrease my audited amounts of gross, but I am not sure if that would work out if there was ever any insurance related litigation or subrogation involved.

But, if I did do that, and I did collect for the materials in full, without me having to carry that portion of the balance on my books, then all the bills to the vendors would be paid in full upon delivery, rather than the 30-60 days after, depending on the delivery date and the billing cycle.

If the contract were structured properly, without having to add on for the overhead of carrying the balance, then my own costs could be cut down, making my end resultant prices lower and more in line with the lower priced competitors.

Just food for thought. Any comments?

Ed>>>

wywoody Said: If your insurance is like mine, there is no rebate if after an audit they found you overestimated, so underestimating is your only choice.

Twice I overpaid, but rather than them giving my a refund, they credited the next years premiums, which I didn't mind.

I usually would, but in that instance, it helped me out for not having to come up with as much on my payment plans for the next 2 years when sales took a down slide.

Ed>>>

"The only people who are going to survive this Recession are the Insurance companies."

Not without our help. AIG.>>>

Vaa Fakaosifolau Said: Yeah I did a topic on this last week called Insurance Renewal why didnt you reply to that? :

I'm too lazy to log in most of the time. If it was quicker I'd probably talk more. >>>

If your insurance is like mine, there is no rebate if after an audit they found you overestimated, so underestimating is your only choice.>>>

Ooooweee. That stinks. I have not got there yet. Then again, my rate is based on payroll, not gross recepits. Sorry for any inaccuracy.

OTOH, we pre-paind our work comp this year, almost $15K paid upfront. Now what do I get from Liberty Mutual????????? A 6 month audit!!! From 1/1/09 to 6/30/09.

What chits they are!>>>