Sentry
11-03-2007, 11:59 PM
The following was posted on another forum recently by Ron Reese:
.......the following letter was submitted to the Federal Trade Commission by way of their e-mail at 'antitrust@ftc.gov'. If this letter is the only one of its kind it will likely be shuffled aside, but if by chance, 10 or 20 or 50 or 100 or ..... Restorers from around the country of like mind submitted similar letters the likelihood of an active response should be increased substantially:
"To whom it may concern;
I am writing regarding a situation in the property damage restoration industry. This is primarily concerned with residential and small commercial losses and what I (and others) perceive as an attempt to impose pricing controls by the insurance industry at large through a company called Xactware located at:
Corporate Headquarters
1426 East 750 North
Orem, UT 84097
(801) 764-5900
Fax: (801) 224-5218
www.xactimate.com
Xactware currently claims that 80% of all insured losses are run through their estimating program.
“Eighty percent of insurance-repair contractors and 16 of the top 20 property insurers use Xactimate to determine the cost of repairs.” (From their website)
They produce a pricing database, which they market as a “pricelist”, which is actually a database of information of previously submitted settlement numbers for typical processes heavily dependent on “feedback” from insurance companies and from captive contractors who have agreements with those insurers to use the database as a “pricelist”. This methodology results in a self-fulfilling prophecy as insurers and their contracted companies feed back information to establish a “pricelist”.
The methodology is not based upon a reproducible definition of costs, particularly overhead costs. It uses circular logic to describe an item called “labor overhead” that is virtually wholly dependent upon the questionable data fed back to Xactimate.
As a practice, insurers, through their adjusting procedures, attempt to impose compliance with these “pricelists” by contractors as a broad group.
Because of Xactimate’s position in the industry, at the very least I believe they should be enjoined from presenting their data as a “pricelist”."
I know that I have, on numerous occasions over several years, both privately and publicly asked that Xactwae not represent their product as a price list-because it is not.
When pressed they will respond with canned replies that they do not set price, etc. etc. but continue to market their product as a "pricelist" thus implying that it is a "pricelist" and perpetuating the abuses of that product by many in the insurance industry.
I understand the marketing position they are trying to exploit, but this practice is deceptive and, I believe damages many in the restoration industry.
I hope there are others who are willing to express the same sentiments.
Ron Reese, CR, WLS
.......the following letter was submitted to the Federal Trade Commission by way of their e-mail at 'antitrust@ftc.gov'. If this letter is the only one of its kind it will likely be shuffled aside, but if by chance, 10 or 20 or 50 or 100 or ..... Restorers from around the country of like mind submitted similar letters the likelihood of an active response should be increased substantially:
"To whom it may concern;
I am writing regarding a situation in the property damage restoration industry. This is primarily concerned with residential and small commercial losses and what I (and others) perceive as an attempt to impose pricing controls by the insurance industry at large through a company called Xactware located at:
Corporate Headquarters
1426 East 750 North
Orem, UT 84097
(801) 764-5900
Fax: (801) 224-5218
www.xactimate.com
Xactware currently claims that 80% of all insured losses are run through their estimating program.
“Eighty percent of insurance-repair contractors and 16 of the top 20 property insurers use Xactimate to determine the cost of repairs.” (From their website)
They produce a pricing database, which they market as a “pricelist”, which is actually a database of information of previously submitted settlement numbers for typical processes heavily dependent on “feedback” from insurance companies and from captive contractors who have agreements with those insurers to use the database as a “pricelist”. This methodology results in a self-fulfilling prophecy as insurers and their contracted companies feed back information to establish a “pricelist”.
The methodology is not based upon a reproducible definition of costs, particularly overhead costs. It uses circular logic to describe an item called “labor overhead” that is virtually wholly dependent upon the questionable data fed back to Xactimate.
As a practice, insurers, through their adjusting procedures, attempt to impose compliance with these “pricelists” by contractors as a broad group.
Because of Xactimate’s position in the industry, at the very least I believe they should be enjoined from presenting their data as a “pricelist”."
I know that I have, on numerous occasions over several years, both privately and publicly asked that Xactwae not represent their product as a price list-because it is not.
When pressed they will respond with canned replies that they do not set price, etc. etc. but continue to market their product as a "pricelist" thus implying that it is a "pricelist" and perpetuating the abuses of that product by many in the insurance industry.
I understand the marketing position they are trying to exploit, but this practice is deceptive and, I believe damages many in the restoration industry.
I hope there are others who are willing to express the same sentiments.
Ron Reese, CR, WLS